Tag Archives: Western Province

Govt, BHP blamed for damage to Fly River

The Fly River is a “dead river” according to the World Bank

The National aka The Loggers Times | January 31, 2019

THE Government and BHP should be equally responsible for the damage to the Fly River as the result of the Ok Tedi mine, a former mining minister says.

Former mining minister and South Bougainville MP Sam Akotai thanked Minister for Environment and Conservation John Pundari for tabling a bill in respect to environment population.

He said the Act would put Ok Tedi on par with all the environment protection laws and practices with other mines operating in the country.

Akotai said the Act would also give confidence to other mines that the Government was not biased with its operations and conducts in respect to the environmental issues in Ok Tedi.

Akotai said he had experience in the industry for well over 18 years and was qualified to make such statements while Ok Tedi mine brought a lot of revenue for the country.

He said the developer, BHP Ltd, owned the mine but it was in partnership with the government and while there was a lot of talks on the damage in Western, both BHP and the national government needed to be squarely responsible for the damage.

He said damage done to the Fly River and its inhabitants was irreplaceable, with the river being described as a “dead river”.

“It is one of the biggest damages ever, and many times we are happy to receive revenues but we have a population who are faced with the situation where the river is already dead,” he said.

“A World Bank report says Fly River is a dead river. After the mine closes, the people of Western living along the Fly River will face the problem for more than 200 years.

“However, the good news was that the new Act would at least control the operation of the mine and the deposit of the waste of the mine.”

Akotai said waste from the Porgera gold mine in Enga was also washed down to the Strickland River which eventually connects the Fly River that added more to the level of damage.

“That is why I’m sorry for our citizens living along the Fly River in Western,” he said.

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Thirty-four years of mining but Western still behind others in development: Yoto

A mother and her malnourished child, Bimadbn Village, Morehead, Western Province, Papua New Guinea. Photo: Penny Johnson

Thirty-four years of mining at the giant Ok Tedi mine but the people of Western Province are still waiting to see the promised benefits

The National aka The Loggers Times | January 28, 2019

Western Governor Taboi Awi Yoto says his province still lags behind other provinces in terms of development, despite 34 years of Ok Tedi mining operations.

Yoto said this when he presented its K308 million 2019 appropriation budget to Treasurer Charles Abel in Port Moresby on Thursday.

“There are no major road networks to connect rural areas to urban areas,” he said.

“My people are still walking long distances, paddling along rivers and swamps to reach the nearest service centres to get medical treatment, attend schools or sell their products at the local market.”

Yoto said the Western Province Development Strategy (2018-22) focused on healthy and educated people with food on the table and income in their pockets.

The Western appropriation budget of K308,050,800 expects K210,831,100 million from National Government grant allocation.

Yoto said the provincial government, through its internal revenue collection, was expected to collect about K97,219,700.

Provincial headquarters will get K171,049,100, South Fly K41,993,900, Middle Fly K49,435, 900, and North Fly K45,571,900.

“The criteria for budget allocation was based on current development and service delivery issues and challenges that confront the lives of over 211,000 people living in rural areas and urban centres across Western,” Yoto said.

Enabling infrastructure got the biggest slice of the budget with K50,764,100 (31 per cent) allocated.

This was followed by education with K36,691,400 (22 per cent)

The health sector was allocated K29,607,000 (18 per cent) while governance sector was allocated K23,372,200 million (14 per cent).

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Ok Tedi Pays Out K100 Million In Dividend

Post Courier | July 24, 2018

The Ok Tedi Mining Limited (OTML) board paid out K100 million as dividend to its shareholders last week Friday.

In announcing the payout, OTML board chairman Sir Moi Avei also cautioned shareholders not to have high expectations heading into the second half of 2018.

He said the company had showed its resilience to bounce back from the effects of February’s 7.5 magnitude earthquake which affected the province and the mine, including four other provinces in the southern and highlands regions of the country.

“While the performance of the business was adversely affected following the earthquake in February, production and profitability have progressively returned to more normal levels,” Sir Moi said.

“Allowing the company to make a K50 million contribution to the earthquake appeal in March 2018 and now fund an interim dividend (of K100 million).”

He thanked employees and contractors for their efforts in recovering from the effects of the earthquake while pointing out that the second half outlook, while positive, required care on the part of the recent fall in copper prices and major infrastructure development.

“While the outlook for the second half of 2018 remains positive, the recent decline in copper price and the ongoing cash requirement to complete the replacement and relocation of the in-pit crusher meant that the board continued to exercise prudence,” Sir Moi said.

Following the transfer of additional equity from the State to Western Province entities in April 2018, K67 million of the dividend was paid to the State, with the balance of K33 million paid to the Fly River Provincial Government, CMCA and Mine communities.

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Ok Tedi funds not safe: MRDC a milking cow for people in Waigani

O’Neill clears air on K200m mine fund

The National aka The Loggers Times | 18 July 2018

PRIME Minister Peter O’Neill told Parliament yesterday that well over K200 million from OK Tedi Mine is currently accumulating in the Community Mine Continuation Agreement (CMCA) and non-CMCA trust accounts for the people of Western.

He said this in response to questions from Middle Fly MP James Donald on why Government had made a decision to transfer money in the CMCA and the non-CMCA trust accounts to Mineral Resource Development Company (MRDC).
Donald said he was very concerned because MRDC was a “milking cow” for people in Waigani.

“I asked the prime minister earlier on and he had given me and the people of Western province assurance that the funds were in safe hands,” he said.

“An NEC decision in June 2017 has stated that after the audits of the CMCA and the non-CMCA trust accounts, the balance of the funds, will be transferred to MRDC.

“I am very concerned that the prime minister has lied to me and the people of Western.

“MRDC is a milking cow for Waigani people and the funds are now in the wrong hands.”

O’Neill said what the Government tried to do was to correct gross mismanagement and misuse of funds in the CMCA and non-CMCA trust accounts over the past years.

He said hundreds of millions of kina belonging to Western people under CMCA and non-CMCA trust accounts had been mismanaged over the years.

“Those funds have never reached the people,” O’Neill said.

“That’s why we are trying to correct and stop this nonsense going on.

“The government has put a ban on the CMCA and non-CMCA trust accounts and conducted an audit.”

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Ok Tedi mine to give 33pc of ownership to communities

The National aka The Loggers Times | May 30, 2018

Fly River (Western) government and communities impacted by Ok Tedi mine will at the end of this year have 33 per cent ownership of the project.

This is according to Ok Tedi Mine Ltd (OTML) chairman Sir Moi Avei in the company’s report for the last financial year.

“As reported last year, the State, the Fly River government and the CMCAs (community mine continuation agreement areas), reached agreement, whereby the provincial government and special purpose community entities will collectively hold a 33 per cent equity interest in Ok Tedi with the State retaining the balance,” he said.

“This change, expected to be completed in 2018, will serve to further strengthen the relationship between Ok Tedi and our host communities.

“OTML will remain.”

The company last year recorded a net profit of K848 million (US$266 million) and generated K84 million (US$ 246 million) of free cash-flow.

This in turn allowed it to distribute K380 million (US$119 million) of dividends in 2017.

Sir Moi said the result was achieved through combined efforts of its employees and contractor partners. “We have been able to meet internal production targets in 2017,” he said.

“Our operations delivered the highest mine production, ore processed and metal production for the last five years.

“The company also played an important role in generating foreign currency with US$ 1billion (K3.25 billion) of sales revenue generated during the year.

“I wish to thank management and the workforce of Ok Tedi for their continued commitment and valued contribution.”
Sir Moi said the company also continued to make significant contributions to services and infrastructure development in areas affected by the mine through its community development programmes.

“The OTDF (Ok Tedi Development Foundation), a subsidiary of OTML, serves as the vehicle for delivering projects and services funded by contributions made by OTML directly and through the CMCA Trusts and the tax credit scheme,” he said.

“OTDF serves this purpose with the eventual goal of broadening its shareholder base and expanding its role to be a significant contributor to long-term development in Western.”

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It must be a standalone gas project warns Western Province Governor

Loop PNG | May 7, 2018

The Fly River Provincial Government is putting the State and the O’Neill-Abel Government on Notice that discussions on developing P’nyang Gas Field must be a STANDALONE GAS PROJECT in Western Province.

“This statement is on behalf of P’nyang Gas Project landowners, Western Province and the 8 million shareholders of Papua New Guinea,” says Western Governor Taboi Awi Yoto.

While welcoming the recent announcement by O’Neill-Abel Government on the accomplishment of the national building policies to ensure its citizens participate more fully and directly in our country’s gas industry, Yoto noted that the Fly River Provincial Government has to use this opportunity to benefit its people by utilising development of gas projects in the province.

Governor Yoto also noted that leveraging from Ok Tedi Mine of its skill labour, professionals and established contractors, Papua New Guineans including his people could participate from the PDL gas conditioning facility, to the pipeline and downstream storage and gas treatment plants.

This complements the requirement of the national and local content policy, utilise Domestic Market Obligation requirement for domestically produced gas for power generation and related downstream products for investment opportunities under the Third party Access code.

“Fly River Provincial Government has the capability and the capacity to undertake challenges to ensure that the P’nyang Gas project is developed in the province. My Government as the host province to more than 20 Trillion Cubic Feet (TCF) of gas deposit, currently featuring the 4.6TCF in P’nyang Gas field, we are prepared to host the next LNG in the province.

“This standalone project will enable the stranded gas fields in the province to optimise the opportunity for further development my people and the people of Papua New Guinea hope to benefit from,” the Governor said.

The Governor noted that Papua New Guinea has learnt many mistakes and gained enough experiences from the first LNG Project, called PNG LNG, under the operatorship of ExxonMobil.

Juha Gas field was committed to the PNG LNG Project and awarded a PDL9 in 2009 without development. It was warehoused under a unitisation development concept and it is still anticipating development in 15-20 years’ time.

P’nyang gas eld PRL13 with others holds 80 percent of the Recoverable Gas Fields yet to be committed.

“Papua New Guineans cannot afford to make another mistake by simply ignoring the glaring facts the country is facing when granting a PDL licence to developers who would not only warehouse the gas field, denying beneficiaries’ rights, but also do not comply with the laws of our sovereign State, statutory and regulatory requirements of the various licence conditions, and undermine public service mechanisms.”

In noting the serious negligence to the regulatory and compliance requirement, the Governor said ExxonMobil contradicts mandatory pre-requisites to qualify a Petroleum Development Licence stipulated in the Oil and Gas Act, and yet provided additional 18-month extension under section 54(2) Instruments to resubmit the licence conditions as specified below.

1. Section 47 to SMLI – P’nyang Landowners successfully restrained developers to comply with this before development license was granted

2. Third Party Certification of Reserves for blocks

a. Need to know how much can be produced and how much shareholders should own in the pool for the years of production.

3. Confirmation of extension of hydrocarbon pool into undrilled blocks

4. Complete pre-FEED and FEED Studies

a. Very important for Provincial Government and LLG to understand the corridors of impact and planning required on expected risks and opportunities. FEED directs priorities on gas development agendas, and beneficiary matrix.

5. Furnish Economic Model

a. FRPG Need to be included in the discussions leading up to gas agreement terms, to agree on provincial government’s terms before gas agreement is executed

6. Full Scale Social Mapping and Landowner beneficiary Identification

a. SMLI report does not specify the actual beneficiaries of the PDL, and the Pipeline and Processing LNG facility areas? When will this be done? This is a grave concern to the beneficiaries of the LNG project and the very issues affecting the PNG LNG Project landowners and provincial governments

7. How Environmental Permit was obtained without Pre-Feed and FEED?

a. Environment impact Statement was done in PDL areas only, how about the Pipeline areas without consultation with the Provincial Government and LLG?

8. Conceptual Development Basis and Development Plan to start construction immediately

a. We cannot grant a PDL and wait in anticipation for 20 years. It is lawful that PDL is contingent on the actual Development of the Project. P’nyang Gas Field is not part of the Foundation project and therefore will not utilise the PNG LNG gas transport, gas treating and liquefaction plant. It will be built as a STANDALONE Project upon the grant of PDL.

The Governor, while thankful of the Government for taking a strong stand following consultation with the State and stakeholders said ExxonMobil quickly submitted its application for PDL in 2015 after noting the expiry date of Petroleum Retention Licence of P’nyang (PRL 13) in August 2016.

“In November 2016, DPE contentiously issued to ExxonMobil an Instrument under section 54 (2) of Oil and Gas Act, to provide additional information to support application for grant of a Petroleum Development Licence. The instrument contains specific mandatory requirements by law that Esso PNG P’nyang Limited (subsidiary of ExxonMobil PNG Ltd) was to fulfil after they have failed to meet/satisfy the pre-requisites for consideration of a PDL during the 15 years term under various licensing periods as specified by law.

“On 16th December, confirmation from a 2015 subsequent NEC decision 386/2015 noted PRL 3 Application does not meet the minimum statutory requirement for the grant of a PDL. That application failed to commit to Specific Field Development Plan for State to consider, contradicting section 54 of Oil and Gas Act, among detailed development proposal that will give the beneficiaries, provincial government and Local Level Government and landowners the benefit of a doubt.

“One of the case in point is in December 2015, P’nyang Landowners and affected pipeline Local Level Government successfully challenged the validity of Social Mapping and Landowner Identification (SMLI) studies by ExxonMobil and obtained a National Court order restraining ExxonMobil and the State from rushing into a Development Forum in Kiunga,” stated Governor Yoto.

“We are speaking for the benefit of the 8 million shareholders of this country, and PNG Government under the leadership of O’Neill-Abel simply cannot afford to suffer another misery from the hands of ‘economic hitmen’.

“This important project will compensate for the losses and lessons learnt from PNG LNG project and Fly River Provincial Government is prepared to take necessary steps to ensure that my Project will be developed and processed in the Province.”

The Governor pointed out that Western Province has contributed significantly to the development of this country through Ok Tedi Mining operation and it’s time the Government gives back to the people of this country to develop the gas project in the province as a standalone project, under new fiscal terms and commercial arrangements.

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Ok Tedi Mine Landowners Get Share Certificates

Post Courier | April 17, 2018

The people of Western Province finally own 33 percent of the giant Ok Tedi Copper Mine following the handover of equity share certificates by Ok Tedi Mining Limited Board Chairman Sir Moi Avei to Governor Taboi Awi Yoto yesterday in Kiunga.

“OTML is now a third owned by the people of Western Province,” Sir Moi told a large gathering of locals and invited guests in front of the grand Cassowary hotel.

“We have heard so much about this 33 percent. Is it every going to happen? The board in its wisdom made a decision that the only way to move this share transfer is loan MRDC K30million to pay for the stamp duty. Governor the stamp duty has been paid. OTML is now one third owned by the people of Western Province,” Sir Moi Avei told the excited crowds.

He also said this ensures that politics cannot interfere now because they own more than thirty percent of the mine.
Western Governor Taboi Yoto said in the past we were told that we own 63 percent but we do not have direct control of the funds.

“We have direct control of the 33 percent and that’s the difference,” Mr Taboi Yoto said.

According to the Governor out of the 33 percent, 12 percent is owned by CMCA communities through their board, the mine villages own 8.4 percent and the Fly River Provincial Government owns 12.6 percent.

“For the government with the four MPs, the PEC members and the LLG presidents, we will decide how we will use the money for development purposes.

“I thank the government of Prime Minister Peter O’Neill for this.”

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