PRIME MINISTER Hon. James Marape has announced that Papua New Guinea will secure a 53% share of the total economic value chain from the new Porgera mine over the first decade of its 20-year operational lifespan. Addressing the Community Development Agreement (CDA) negotiators in Wabag, Marape emphasized that this agreement represents a significant improvement over previous arrangements, promising enhanced benefits for the nation.
Under the new agreement, Barrick and its partners will receive the remaining 47%. The 53% allocated to PNG encompasses royalties, equity, compensation, and local content, with 51% of the project’s equity owned by PNG parties. The National Government, through Kumul Minerals Holdings Limited (KMHL), holds 36%, while 10% is designated for SML landowners and 5% for the Enga Provincial Government (EPG).
This agreement marks a significant shift toward greater local ownership and benefits sharing. The CDA negotiations, involving key government departments and agencies, aim to finalize the fiscal and legal frameworks before implementation. This milestone deal not only secures substantial immediate benefits but also sets the stage for long-term economic growth and community development in Papua New Guinea.
The recent announcement by Prime Minister Hon. James Marape regarding the new Porgera mine agreement marks a significant milestone in Papua New Guinea’s economic landscape. With the nation securing 53% of the total economic value chain from the mine over the first decade, this deal sets a new precedent for resource development in PNG.
This agreement ensures that PNG will benefit significantly from the Porgera mine, with local stakeholders receiving a substantial share of the mine’s economic returns. The breakdown includes 36% ownership by the National Government through Kumul Minerals Holdings Limited (KMHL), 10% for the SML landowners, and 5% for the Enga Provincial Government (EPG). This ownership structure aligns with the government’s commitment to the equitable distribution of resource benefits, providing a stronger foundation for local economic empowerment.
Financially, the projected benefits from the Porgera mine are substantial. Over the next 10 years, PNG stands to gain approximately $1.3 billion in royalties, equity returns, and other benefit streams. This includes direct payments to landowners, which are expected to exceed $200 million, significantly enhancing local livelihoods and fostering community development.
The impact of this agreement extends beyond immediate financial gains. The anticipated influx of revenue will enable significant investments in infrastructure, education, and healthcare within Enga Province and beyond. The government has pledged to reinvest a portion of the mine’s proceeds into these critical sectors, addressing long-standing developmental challenges and promoting sustainable growth.
Moreover, the Porgera mine agreement highlights a broader trend in PNG’s resource sector. The government’s focus on securing better deals for its natural resources is evident in the increased equity share and improved benefit-sharing mechanisms. This shift is crucial as PNG looks to maximize the economic potential of its rich mineral resources while ensuring that the benefits are widely distributed among its citizens.
The Porgera mine’s reopening is also set to boost employment significantly. The project is expected to create over 3,000 direct jobs and numerous indirect employment opportunities through associated industries and services. This employment surge will stimulate local economies, reduce poverty rates, and contribute to social stability in the region.
In addition to economic benefits, the new agreement emphasizes environmental and social governance (ESG) principles. Barrick and its partners are committed to implementing sustainable mining practices, minimizing environmental impact, and enhancing community relations. This focus on ESG aligns with global standards and ensures that the mine’s operations are socially responsible and environmentally sound.
As PNG approaches its 50th anniversary of independence, the Porgera mine agreement symbolizes a new era of economic sovereignty and strategic resource management. By securing a more significant share of the mine’s economic benefits, PNG is taking a bold step toward greater self-reliance and sustainable development. This landmark deal not only enhances the nation’s economic prospects but also sets a benchmark for future resource agreements, ensuring that the wealth of PNG’s natural resources is harnessed for the benefit of its people.
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