TechInPacific – The Papua New Guinean Prime Minister Hon. James Marape visited Porgera on Friday (04/21) along with State Ministers and Government delegates to hand over the new Porgera Framework Agreement to the landowners and the Enga Provincial Government.
The agreement believed to benefit the landowners as elaborated by PM Marape on the following points:
- 51 percent equity by PNG shareholders for 10 years with the option of buying out Barrick’s 49 percent at fair value;
- The State is contributing only 36 percent to restart the mine with 15 percent free carry equity, with Barrick paying for 64 percent cost of the restart;
- The State will contribute no cash upfront to restart as the 36 percent equity cash call will be raised by Barrick with zero percent or no interest charge (so this means Kumul Mineral Holdings (KMHL) or the State will not borrow as previous governments did for PNG LNG Project (IPIC) or Oil Search shares (UBS deal);
- The State has gained an additional 1 percent extra on top of the 2 percent for royalties allowed by law,
- The State has secured full 30 percent corporate tax (unlike Lihir and other mines like Ramu) plus securing of an additional 2 percent 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 the environment.
The Special Mining Lease (SML), Leases for Mining Purposes (LMP), and all affected areas are expected to split the above benefits this June in the planned development forum in Enga, according to PM Marape.