Barrick JV to PNG’s Marapa: The solution sits right in front of us

he world’s second largest gold miner, Barrick, says it remains open to negotiations with Papua New Guinea to reopen the Porgera mine, but stresses that negotiations have to be in good faith and without preconditions.

Prime Minister James Marape has said that the government will engage with joint venture operator Barrick (Niugini) Limited (BNL), but only if it were to withdraw its legal action.

BNL said it was ready to work with Marape directly to find a resolution to the standoff, which had cost 2 650 employees their jobs, forced the closure of 200 Porgera enterprises and cost contracting companies K140-million in the first two months of the mine’s shutdown.

The company, however, urged the Prime Minister to ensure that negotiations start “as soon as possible”.

“Each day that passes only worsens the suffering of Porgeran landowners and communities, laid-off workers and contractors facing bankruptcy, while making a restart of operations that much more difficult and expensive,” it said in a statement on Friday.

BNL also said that extending its special mining lease (SML) was a sure way to quickly reopen the mine, stressing that it would take a long time for another entity to legally restart operations. There would have to be, at minimum, a new SML application process for a State-owned entity, new negotiations with the landowners and a new environmental permit. This, the company said, could take years to complete.

BNL, in partnership with the Porgera landowners, had submitted an enhanced proposal that would deliver 58% of overall economic benefits to Papua New Guinea, totalling some $4.5-billion (K15.5-billion) over 20 years, which it said represented the “best agreement by far that PNG has ever negotiated with a foreign investor”.

“The solution sits right in front of us.”

Relations between Barrick and government have deteriorated since the rejection of the SML application in April.

On Thursday, BNL announced that it would reduce power to the communities around Porgera, which currently receive free electricity from the mine, citing necessary cost reductions as the mine has been placed on care and maintenance.