Aerial view of the Porgera gold mine. Photo: Zijin Mining
A Papua New Guinea academic wants structures to be put in place to ensure returns from the soon to reopen Porgera goldmine in PNG are not wasted.
The mine has been shut down for three years as the government and parent company, Barrick Gold, worked through a new lease.
However, it is now set to re-open in September this year.
Andrew Anton Mako, who grew up in Porgera in the early years of the mine and won a mine-funded scholarship to study at the University of PNG, said much of the earlier income went on consumption.
He has written about what he calls the blessings and the curse the mine brought to what was a small district of about 4,000 and which now has more than 70,000 residents.
Parent company, Canadian company Barrick Gold, along with its partner Zijin Mining of China, has this week committed to meeting the government's opening date of 16 September.
Mako hopes that the new leases, agreed back in April, and which are much more beneficial for the landowners, will be used smartly and not wasted on consumption spending.
"In the past it was only 2.5 percent of the mine equity stake," he said.
"Now the landowners have been given ten percent, free carry, by the government. So, it will be a lot of money. It is estimated around 25 million kina. That's a lot of money for the next 20 years.
"So even though the proceeds will increase, the main issue is in the governance, the use of that money, whether it will be used productively to improve the lives of the people or whether it will be used mostly on consumption," he said.
Mako said there must also be thought given to what happens when the mine stops producing.
"The mine is estimated to last only 20 years when it resumes and after that there won't be anything to go by, if the money is just spent on consumption," he said.
"So, what I was proposing was to set up a long-term fund that will cater for socio-economic development post the gold mine."
He said this would require improved governance while the district and regional governments must be strengthened.
Commitment to open
The Canadian multinational, Barrick Gold, said it would strive to reach the government's call for the mine to reopen on 16 September this year.
Under the new lease arrangement, Barrick and Zijin will take a minority shareholding, with the government holding 53 percent.
Prime Minister Jame Marape said in a statement that he met this week with Barrick chief executive Mark Bristow to discuss recent progress being made.
He welcomed Bristow's statement that Barrick was committed to PNG "for the long haul" and his pledge that Barrick Niugini Limited would do everything under its control to meet the reopening date, and to which both parties are now working diligently toward.
The prime minister said with the reopening imminent, a development conference will shortly be held.
He said both parties are committed to fixing the legacy issues such as proper resettlement, increase land rates and compensation consistent to law, education and health developments, infrastructure developments, and a better law and order environment.