Papua New Guinea has swooped in to take control of Barrick Gold’s Porgera gold mine after refusing to extend a special mining lease with the Canadian company.
Barrick claims the decision is a violation of the government’s legal obligations towards the company and “a catastrophic situation for communities at Porgera and in Enga, and for the country as a whole.”
The company has threatened legal action against the move, which would also involve any damages that Barrick suffers from losing control over the mine.
According to a statement from Barrick, the decision goes against its right to the renewal confirmed by the PNG National Court in August last year.
Barrick applied for an extension to its special mining lease in June 2017, where it previously proposed a benefit-sharing arrangement that was expected to deliver over half the economic benefits of the mine to Papua New Guinea stakeholders, which included the government, for 20 years.
Changes to the terms of the special mining lease or any indication that it would not be extended was never given by the government, Barrick claims.
The company’s relationship with the Papua New Guinea Government seemed to be on a good standing last year, with Prime Minister Marape stating “the government values our continued partnership and it is our intention to do everything possible to ensure that arrangements are in place to enable continued operations of the Porgera Gold Mine once the current SML (special mining lease) expires in August 2019.”
However, the government’s reason for not extending the special mining lease was based on alleged environmental damage claims and resettlement issues — both of which were never indicated prior to this decision.
The government previously approved environmental management practices at the site, with The PNG Conservation and Environmental Protection Authority (CEPA) carrying out regular audits at the mine, which was found to be within compliance.
Porgera landowners have also been denied a voice in the decision, with Barrick stating the prime minister “has refused to consult them or even hear their views.”
Newcrest Mining, meanwhile, confirmed its operations in Papua New Guinea have not been impacted by the decision regarding the Porgera gold mine.
The company has “welcomed” the Prime Minister’s support for the Wafi-Golpu project, adding that its special mining lease at the Lihir operations remaining in good standing with a lease renewal not expected until 2035.