PNG mine takeover closes 100 community projects

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 21 Nov 2013   Posted by admin


THE Papua New Guinea Government has seized ownership of the giant Ok Tedi copper and gold mine, resulting in the closure of an associated charitable trust worth about $96 million in projects for the local community.
In September, PNG Prime Minister Peter O’Neill forced through a bill giving the state complete ownership of Ok Tedi, on the Fly River in Western Province, replacing shares owned by the PNG Sustainable Development Program (PNGSDP) – which supported local programs with profits from the mine – with shares owned by the government.
PNGSDP reported that 100 development projects worth about $96 million had been closed down by late October, including support for schools, hospitals and aid posts across the country, as well as water, sanitation and solar energy projects.
The $1.4 billion fund was originally intended for development and as an income stream for mine-affected landowners following Ok Tedi’s closure.
In a deal with the then-government in 2001, BHP Billiton divested its majority share of the mine to the PNGSDP in return for immunity from legal action for environmental damage caused by the mine’s operations.
A separate bill passed in September, which repealed the immunity agreement. In an article for The Conversation, University of Melbourne Centre for Public Policy research fellow Sara Bice said BHP had lobbied for Ok Tedi’s closure in 2001, but the mine’s 1 per cent contribution to GDP and 19 per cent of total PNG exports had kept it operating.
“For a country in economic strife, the closure costs associated with such an asset were deemed too great, the environment another victim of national economic necessity,” she said.
Confusion also followed a government decision to fire all Ok Tedi staff before rehiring a smaller workforce in 2014, as part of plans to reduce production by a third.
The ABC reported that some of the mine’s 6000 workers went on strike late October because of concerns about redundancy packages.