Papua New Guinea Gold mine to become a top tier mining asset while landowners’ rights ignored

Financial Post

The most basic needs and rights of Papua New Guinea landowners are being completely disregarded while a Canadian and Chinese consortium talks up the potential of an internationally significant gold mine ahead of a PNG Government decision on the mine’s lease renewal.

Porgera Gold mine in remote Enga Province of Papua New Guinea expired last year and consortium made up of Canada’s Barrick Gold Corp and China’s Zijin Mining wants their lease to be extended for another 20 years.

A majority group of landowners, the Justice Foundation for Porgera headed up by the PNG Resource Owners Chairman Jonathan Paraia believes Barrick has no intention to deliver on promises it’s making to reduce environmental destruction or stop practices that damage local lives.

“Barrick has had 20 years to adequately deliver on its promises to resettle landowners, provide housing, education, clean drinking water so how can we for a moment believe that it will start honouring promises made under new contracts,” he said

“How many more independent reports detailing environmental and human rights abuses need to be published before the mine is held to account,” he said.

Mr Paraia understands Barrick needs this lease to be renewed so it can conclude a deal with Chinese state-owned entity Zijin.

“If the lease is renewed Barrick will not see it out, it intends to divest its share to its Chinese partner or someone else,” he said.

In 2015 Barrick Niugini officials told Landowners to make an offer for 95% of shares in Porgera mine but we could only make an offer for 10% so there was no sale. Instead in 2017 it sold half its shares to Zijin. We believe its goal is to sell its remaining shares once the lease is renewed.

The Chairman of the Justice Foundation for Porgera is also extremely concerned about a 70 million kina (almost $20M US) donation made to the Enga Provincial Government last week by the Chinese Government.

“The extremely generous donation while a decision on the mine is imminent is highly suspicious at best, and deserves a high level of scrutiny,” he said.

Jonathan Paraia also wants Barrick and elements of the PNG Government to stop cherry-picking supportive minority landowners with conflicts of interest and listen to the vast majority who want Barrick out.

“In the last fortnight, as part of Prime Minister James Marape delegation to Enga, Minister Johnson Tuke, Minister Bryan Kramar and Mineral Resources Authority head Jerry Garry unofficially visited the mine site and met with Barrick employees and contractors who claimed to be landowner representatives.

“Two of the guests, in particular, Dick Pundi a director of Ipili Porgera Investments Ltd (IPI) and Maso Mangape an employee of IPI claim to represent the interests of Landowners when IPI is a major service provider to Barrick, so whose interests are they serving?” he said.

The Justice Foundation for Porgera is aware the Prime Minister is adamant to take over the Porgera Gold Mine but other representatives of government are acting against the interest of the Prime Minister.

“The people of Porgera and the Justice Foundation for Porgera know the Prime Minister James Marape is listening to the people and has the best interests of our country at heart.

“We stand behind the Prime Minister and support him to say Barrick out, it’s time Papua New Guineans profited from Papua New Guinea’s valuable resources,” Mr Paraia said.

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Barrick Gold forges ahead on Papua New Guinea mine in face of local backlash

Jeff Lewis and Melanie Burton | Reuters | January 15, 2020

Barrick Gold Corp is set to elevate its troubled Papua New Guinea mine to its top-tier assets, despite landowner and government demands to cede a larger stake and deteriorating security at the joint venture with China’s Zijin Mining

With a 20-year lease renewal application in the balance, Barrick has faced backlash from Papua New Guinea (PNG) landowners and residents. Critics say the Porgera mine has polluted the water supply and created other environmental and social problems, with minimal economic returns for locals.

Seven people have died at the Porgera mine since September, including three so-called illegal miners last month in clashes that prompted Barrick’s local entity to appeal for government intervention.

Barrick hopes to boost the mine’s production by 18% or more. This previously unreported outlook raises the stakes for Prime Minister James Marape’s government, which has been seeking richer terms from miners and oil and gas producers.

The head of the country’s mining regulator said Barrick, the world’s No. 2 gold miner, is waiting to begin serious negotiations for permit renewal terms with the country’s executive council, led by Marape.

“If we can renew the permit on a reasonable basis, it stands up as a tier one asset,” Barrick Chief Executive Officer Mark Bristow told Reuters, referring to a large scale, long-life, high margin deposit.

PNG’s next steps with Barrick could influence billions of dollars of planned investment by global miners including Australia’s Newcrest Mining and St Barbara, who are eyeing new mines or mine extensions, but are wary of rising sovereign risk.

Miners, facing a dearth of new deposits and rising resource nationalism, may now have to cede greater rewards to other stakeholders.

“There will have to be equitable sharing of the spoils or these things won’t be developed or will be discontinued, ultimately,” said portfolio manager Simon Mawhinney, at Allan Gray in Sydney who is among Newcrest’s biggest investors.

Barrick’s tier-one designation, used describe a mine capable of producing 500,000 ounces of gold annually for at least 10 years at low cost, would place Porgera in league with Barrick’s crown jewel assets at a time major gold miners are desperate to replace shrinking reserves.

Barrick and Zijin’s combined 2018 production at Porgera was around 421,500 ounces.

ENVIRONMENTAL ISSUES

An exposed pipe that Barrick uses to dump its tailing into the environment at Porgera in Papua New Guinea and people desperate for an income pan for residual gold in the waste, seen in a photograph from 2017. Photo by Catherine Coumans

Barrick has broadened the role of its top China executive and former U.S. diplomat Woo Lee to handle day-to-day talks with the PNG government. It has pledged to relocate villagers whose land the mine has swallowed and study ways to improve management of mine waste currently dumped in rivers, Bristow said.

The moves, aimed at mollifying concerns over access to arable land and pollution of local waterways, may not be enough to satisfy landowners and the PNG government who want a larger equity stake.

Barrick and Zijin each own 47.5% of the mine, with the remaining 5% held by landowner group, Mineral Resources Enga.

Analysts have said Barrick could opt to put its stake on the block with other assets it has shed to meet a $1.5 billion divestment target. But Bristow played down a potential sale, saying Porgera fits Barrick’s investment criteria.

“It makes real returns, it creates value, it can survive the cyclicality of the gold industry and will make a significant contribution to our other stakeholders,” he said.

Barrick’s top executive has shown he is willing to make concessions to settle disputes. In October, Barrick agreed to sell Tanzania a 16% stake in each of its Bulyanhulu, North Mara and Buzwagi mines to resolve a long-running fight over taxes.

The Canadian miner may face added pressure to confront issues in PNG that run afoul of investor benchmarks on environmental, social and governance issues.

Citi, for example, has pledged not to support mining companies who use riverine tailings disposal which an NGO said in a 2019 report had polluted the rivers and denied locals reliable drinking sources.

Maso Mangape of the Porgera Land Owners Association said local residents had been squeezed out. “The mine site has now become a battlefield,” he said.

MRA Updates On Porgera Mine Lease Application and Wafi-Golpu

Melisha Yafoi | Post Courier | January 7, 2020

Application for a Special Mining Lease for the Porgera gold mine is still in progress.

Mineral Resources Authority managing director Jerry Garry told the Post-Courier that the state is progressing the determination of the application which expired on August 16, 2019.

Mr Garry said during that process there will be two major streams of activities including the negotiations of the Mining development contract and recommendations from the Mining Advisory Council.

He said for the Mining development contract, the State Negotiation Team, (SNT) will recommence negotiations with the mine operators Barrick & Zinjin upon receiving directives from the NEC.

“This process will principally discuss fiscal regimes and other stability agreements in terms of taxes, royalties, equity, national content and other benefits teams,” he said.

While for the recommendations, he said this will be administered by the MRA whereby the technical and financial capabilities of the operator and compensation agreement pertaining to the extension application will be presented before special MAC for its deliberations and recommendations, either for refusal or grant to the Mining Minister & ultimately to NEC.

“We anticipate conclusion of the permitting, if, all goes well without any disruptions to the process, within first or second quarter of 2020,” he said.

Mr Garry said the permitting of Wafi-Golpu project after being halted due to a court injunction order was relieved preventing everyone from doing any work.

He said the injunction remains on foot and will SML application be dealt with only when the court injunction is resolved.

“Whenever the court injunction is relived, the MRA will formalise the remaining landowner associations along the pipeline and tailings outfall, and continue to hold development forum to develop the memorandum of agreements and compensation agreements with landowner associations, LLG and provincial government.

Concurrently, the SNT will re-open Mining Development Contract negotiations with the project development proponents, Harmony and Newcrest,” he said.

“It is anticipated that SML permitting may take 4-6 months from the date when the court injunction order is lifted.”

Mr Garry said as for the Revised Mining Act, whenever the Revised Mining Act is passed by the Parliament, the MRA will re-align itself to meet the new changes.

He said the Prime Minister has urged another consultation with the industry during the December 2019 PNG Mining Conference and the Department of Mineral Policy & Geohazard Management will be coordinating this process.

Fighting Among Illegal Miners Worries Barrick

Barrick Gold looks to PNG government to sort out a mess that the Canadian mining company itself has created

Post Courier | December 30, 2019

Operator of the Porgera gold mine in Enga Province, Barrick Niugini Limited (BNL) has called on the government for an urgent intervention in Porgera after a protracted violent conflict between armed warring factions of illegal miners.

The operator stated that the illegal miners are believed to be from Tari.

The incident happened earlier this week on the Porgera Special Mining Lease which the clash occurred in the mine’s open pit area where numerous gun shots were discharged.

There were also reports from community members that many other combatants with injuries from the gun battle were carried away from the area by their accomplices.

The gun battle came just 24 hours after mine security personnel and members of the PNG police recov-ered the body of a woman who had died of significant injuries, including gun-shot wounds, within the mine’s operations area. The woman was also believed to be from Tari.

“BNL is appalled by the level of lawlessness that is continuing to pervade the Porgera district, and is particularly concerned by the senseless killing and the use of rearms by warring groups of illegal miners who have invaded Porgera from other areas.

“The on-going use of rearms by outside criminal elements continues to create fear among the community and local mine employees,” a company spokesman said.

“The company remains ready to support the government’s commitment to a long-term solution for Porgera’s law and order problems, following discussions between Police Minister Bryan Kramer and the community during the Minister’s recent visit to the district.”

PNG PM urges patience over Porgera mine talks

“Government was well aware that a majority of landowners want Barrick’s lease not to be renewed” – PM.

Radio New Zealand | 5 December 2019

Papua New Guinea’s prime minister has urged patience while negotiations over the contract for the Porgera gold mine continue.

James Marape was responding to questions in parliament from Laigap-Porgera MP, Tomait Kapili.

Barrick Gold Ltd, the co-operator of the mine in Enga province with China’s Zijin Mining Group, is pushing to renew its contract.

Mr Kapili requested that Mr Marape move all negotiations to Porgera itself, to adequately gauge landowners’ views and the extent of problems around the mine.

The MP spoke of ongoing “serious” law and order problems which he linked to a surge of outsiders to Porgera since the expiry of the Special Mining Lease in August.

“Since the expiry of the SML there’s hundreds and thousands of people coming from afar, outside the valley, claiming that the extension of the license – while we are negotiating – is not in order, ‘they are illegally mining, so we also want to illegally mine’.”

The prime minister answered that the government was well aware that a majority of landowners want Barrick’s lease not to be renewed.

He said the government had received many written and oral representations from landowners indicating that over 90 percent of them were against Barrick staying on.

“But we are mindful that our partners are operating the mine and they have the asset up there in the mine itself, so those discussions will bring to full conclusion when we consult everyone.

“I intend in the new year (for) an announcement to be made to the status of what will happen in Porgera,” said Mr Marape, adding that he would consider the Laigap-Porgera MP’s request.

“Let me assure the member that I look forward to considering his recommendations in the positive, that all discussions, if not all major discussions, will take place in Porgera, be held in the Porgera valley up in Enga province. So those recommendations are taken on board.”

Since last year, Porgera landowners have conducted a number of public protests to demonstrate their opposition to Barrick’s continued involvement in the mine.

They have complained about lack of compensation for environmental damage caused by the mine over almost thirty years of operation.

Mr Marape urged landowners to maintain composure while the government concludes its discussions with the mine operators.

His government is seeking a greater share in the mine.

Two Illegal Miners Shot Dead By Cohort at Porgera

Robert Apala | Post Courier | December 5, 2019

A Porgera landowner has called for urgent action against illegal mining activities after two men were shot dead, allegedly by another group of illegal miners.

According to landowner Rexie Kulina, over 200 illegal miners entered the Porgera pit area to scavenge when the incident happened last Saturday.

Mr Kulina said illegal mining activities is raising law and order issues to a dangerous level, with armed gangs now entering the in-pit and threatening locals.

He said the deceased, both from Kandep, were in a ‘hot spot’ or area where gold specks could easily be found, when they were challenged by an armed raider, allegedly from a neighbouring province.

Mr Kulina said the second group of illegal miners wanted to move into a rich spot, where the Kandep man was getting A-grade gold but he resisted and was shot.

“The law and order situation in the valley is tense and local police cannot handle such issues in the mining areas and in the valley,” Mr Kulina said.

Porgera local police chief, Sergeant Poko Itapu, said local policemen are trying their best to settle the issues of illegal miners but still there is trouble and violence.

Sgt Itapu said they can only arrest and charge illegal miners if they cause fear to the general public or destroy public property, but if they just pass through Porgera station, the police cannot do anything.

“We are here just to protect public properties and the general public but whatever these illegal miners do in the mine’s open pit is not our concern,” he said.

Sgt Itapu said the two opposing ethnic groups are regrouping and locals are walking in groups with weapons, while women, children and mine workers in Porgera station monitor the situation in fear.

He said relatives of the deceased are demanding compensation and also want the killer to be handed over to police.

“There are no leaders here in the valley.

“The local police are powerless. “We want the government to declare a state of emergency (SoE) in Porgera valley,” Sgt Itapu said.

“We want the so-called leaders of Porgera to return because the people are suffering and want peace.”

He said most Porgera landowners and leaders are in Port Moresby fighting over the right to lead the mine license renewal.

Porgera Community Leaders Call For State Of Emergency

Post Courier | November 4, 2019

A group of community leaders from Porgera,in Enga Province is calling on the Government to declare a state of emergency in the district.

Porgera district law and order co-ordinator Joe Kuala claimed yesterday that there was chaos in Porgera, especially with the increase in the number of settlers and illegal miners.

Mr Kuala said the law and order situation in the district had worsened to the extent where the mine pit had become a battle field for tribal and ethnic clashes.

He said currently there were 36 police officers on the ground looking after more than 70,000 people and that needed to be seriously looked at.

“High powered guns from Hela and neighboring villages have flooded into the station and this has seen a number of increases of rearms and we are scared as our station is not safe anymore,” Mr Kuala said.

“There is also a high number of illicit activities, including the selling and consumption of home brew and marijuana in public areas.
“This has become a day-to-day activity now.”

Mr Kuala said despite attempts to solve tribal conflicts through compensations and mediation hearings, the situation had gone from bad to worse, especially with limited police officers on the ground to provide security and policing for the community.

“We are now calling on the Government to declare a state of emergency in Porgera and sort this law and order issues once and for all.
“We cannot continue to live in fear of being shot at or being attacked at our homes and work place,” he said.

“Porgera is a local community station where public servants live however with these issues, many public servants including teachers have refused to work because their lives are being threatened.

“We are asking the minister for Police and Defense and the state to please listen to our pleas and help us by looking into this mess.

“We are willing to work with government to ensure that the future of our children are safe,” he said.

Porgera landowners call on PNG govt to reject Barrick

Radio New Zealand | 4 November, 2019

Landowners in Papua New Guinea’s Enga province have pressed the government not to renew a license for a Canadian miner.

Barrick Gold Ltd, which is co-operator of Enga’s Porgera gold mine with China’s Zijin Mining Group, is pushing to renew its contract for another 20 years.

Negotiations are ongoing with PNG’s government which said it was seeking a greater share in the mine.

But landowners continue to complain about lack of compensation for environmental damage caused by the mine over almost thirty years of operation.

Additionally, the chairman of the Porgera Landowners Group, Nixon Mangape, told EMTV that promised benefits from the mine were never forthcoming.

“I said ‘no means no’. Barrick’s license has expired and the company should be ready to exit. So you exit, you exit peacefully. No negotiation.”

Porgera Mine – A World Class Disaster

The Porgera gold mine has made people slaves on their own land, forced to scrape in the polluted mine tailings to try and earn the money to buy food and basic essentials. The owners of Barrick Gold and Zijin Mining should hang their heads in shame…

Barrick Shareholders Call On Authorities To Address Violent Crime

Mining company looks to State to resolve the completely foreseeable social problems it has created…

Post Courier | October 7, 2019

The shareholders of Barrick (Niugini) Limited, operator of the Porgera Mine in Enga Province, have expressed their sadness at the passing of a mine employee who was fatally injured in a shooting incident at the mine on the night of September 29.

They are now calling on the authorities to address criminal behaviour in Porgera.

President and chief executive officer of Barrick Gold Mark Bristow, and chairman of Zijin mining, Chen Jinghe, made the following comments:

“We are deeply saddened by the news of the passing of Samuel Marefa, an asset protection officer at the Porgera mine who sustained a serious gun-shot injury during that night.

“Samuel was evacuated by air to Port Moresby for urgent surgical treatment and he had been in critical condition for several days.

“We received the tragic news last night that following a series of complex surgical procedures he could not hold on.

“Samuel passed away as a consequence of his injuries from the shooting.

“Our company is deeply saddened by his passing, and our thoughts are with Samuel’s wife and family at this difficult time.

“Barrick (Niugini) limited management has been consulting with State authorities since the incident and we have made it clear that we consider it unacceptable that criminals can routinely intrude into operational areas of the mine and behave in this way with impunity.

“The impact of this unlawful and violent behaviour is significant, both in terms of loss of life and serious injury, including to law-abiding mine employees simply trying to earn their living at work, and in terms of the law and order situation in Porgera generally.

“We call on State and provincial authorities to urgently and thoroughly investigate the assault on Mr Marefa, bring the murderers to justice, and to address the rising incidence of violence and lawlessness in the Porgera Valley, which makes it difficult for residents to carry out ordinary activities and lead normal lives.”

Mr Bristow and Mr Chen noted that the company stood ready to work cooperatively with the Royal Papua New Guinea Constabulary and other authorities in responding to this latest incidence of violence and to finding long-term solutions to the critical state of law and order in the Porgera valley.