Prime Minister James Marape (Friday June 4th 2021) visited Porgera accompanied by State Ministers and Government delegates to announce the new Porgera Framework Agreement.
The agreement was successfully negotiated with Barrick Niugini Ltd (BNL) in April this year.
PM Marape, when handing over the agreement to resume mining operations at Porgera to landowners and the Enga Provincial Government, made several announcements on its overarching benefits.
These include:
- 1. 51 per cent equity by PNG shareholders for 10 years with the option of buying out Barrick’s 49 per cent at fair value;
- The State is contributing only 36 per cent to restart the mine with 15 per cent free carry equity, with Barrick paying for 64 per cent cost of restart;
- The State will contribute no cash to upfront to restart as the 36 per cent equity cash call will be raised by Barrick with zero per cent or no interest charge (so this means Kumul Mineral Holdings (KMHL) or the State will not borrow like previous governments did for PNG LNG Project (IPIC) or Oil Search shares (UBS deal);
- The State has gained additional 1 per cent extra on top of the 2 per cent for royalties allowed by law,
- The State has secured full 30 per cent corporate tax (unlike Lihir and other mines like Ramu) plus securing of an additional 2 per cent fiscal stability tax;
- Better local content for more local contractors and employees;
- One-off US$15 million start-up seed capital for landowners, and every year going forward a US$3m fund for future generations; and
- Old Porgera legacies remain in the ‘old Porgera basket’. Going forward Government, KMHL and BNL give assurance of resettlement and care to society and environment.
PM Marape further outlined that the development forum is proposed to take place this month in Enga where Special Mining Lease (SML), Leases for Mining Purposes (LMP) and all affected areas will get together to split the benefits.
Prime Minister thanked to Enga Governor Hon.Sir Peter Ipatas and announced 10 per cent of equity for landowners in Porgera Valley.
