Posted in | Mining Business

BNL Challenges Government’s Decision on Not Extending Special Mining Lease

Barrick Niugini Limited (BNL), majority owner and operator of the Porgera gold mine in the Enga province of Papua New Guinea (PNG), said today the Government’s decision not to extend its Special Mining Lease was tantamount to nationalisation without due process and in violation of the Government’s legal obligations to BNL.

BNL said it remained willing to discuss the issue with Prime Minister James Marape and his Government in the hope of averting what it described as a catastrophic situation for the communities at Porgera and in Enga, and for the country as a whole.

It will, however, pursue all legal avenues to challenge the Government’s decision and to recover any damages that BNL may suffer as a result of the Government’s decision. It also said it had no interest in discussing transitional arrangements for the management of the mine, as proposed by the Government, as this was not consistent with BNL’s rights. BNL’s right to the renewal was confirmed by the PNG National Court in August 2019.

BNL applied for the extension of the SML in June 2017 and has been engaging with the Government on this matter since then. In 2019, in response to a request from Prime Minister Marape, the company proposed a benefit-sharing arrangement that would deliver more than half the economic benefits to PNG stakeholders including the government  for 20 years.

Barrick President and Chief Executive Mark Bristow has met with Prime Minister Marape four times to discuss the extension issue and to re-affirm BNL’s commitment to a long-term partnership with PNG. After their first meeting in June last year, the Prime Minister wrote to Bristow stating that “the Government values our continued partnership with Barrick 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 expires in August 2019”.

Despite this and other assurances, and numerous encouraging conversations with Government ministers and representatives, neither the Prime Minister nor anyone acting on behalf of the Government has ever proposed any alternative terms on which the SML could be extended, or indicated that it would not be extended.

The Government has also ignored the wishes of the Porgera landowners, who overwhelmingly support the extension of BNL’s lease, and the Prime Minister has refused to consult them or even hear their views.

BNL also notes that the Government has advanced the existence of alleged environmental damage claims and resettlement issues as a reason for the non-extension. The company says the environmental management practices at the mine were studied and approved by the Government. The PNG Conservation and Environmental Protection Authority (CEPA) has carried out regular audits of the mine and has always found it to be in compliance with its permits. In fact, BNL’s environmental management system exceeds the requirements of its permits. As far as resettlement is concerned, BNL has compensated and relocated more than 1,400 households impacted by the mine’s operations, and at no stage has the government indicated that the mine had not complied with its obligations in this regard.

Source: https://www.barrick.com/

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