Barrick Gold of Canada and Zijin Mining Group of China have lodged a protest against the decision of the Papua New Guinea (PNG) government not to renew the operating lease for the Porgera gold mine.
The mine, which is owned by Porgera Joint Venture and operated by Barrick Niugini Limited (BNL), is an open pit and underground gold mine located in the Enga province of PNG, about 600 kilometres northwest of Port Moresby.
Barrick and Zijin each own 47.5% of the operation, with the remaining 5% interest held by Mineral Resources Enga.
BNL released a statement saying that the decision not to extend its special mining lease (SML) was tantamount to nationalization without due process, and in violation of the government’s legal obligations to BNL.
BNL says it remains willing to discuss the issue with Prime Minister James Marape in the hope of averting what it describes as "a catastrophic situation" for the communities at Porgera and in Enga, and for the country as a whole.
It adds that it will 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 says it has no interest in discussing transitional arrangements for the management of the mine, as proposed by the government, as this is not consistent with BNL’s rights. BNL’s right to the renewal, it notes, 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 PNG 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, which include the government, for 20 years.
According to BNL, Barrick president and chief executive officer 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 of 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 the 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," BNL states.