Papua New Guinea is set to take control of Barrick Gold’s (TSX: ABX) (NYSE: GOLD) Porgera mine after refusing to extend the company’s lease on environmental and social grounds, Prime Minister James Marape said on Friday.
“In the best interests of the state, especially in lieu of the environmental damages, claims and resettlements issues, the Special Mining Lease will not be renewed,” Marape said.
The decision, which would have renewed Barrick’s rights for 20 years, comes nine months after the mining lease expired. During that time, the world’s second largest gold miner has faced backlash from landowners and residents over what they claim are negative social, environmental and economic impacts from the mine.
Negotiations with Porgera’s operators were complicated further by a split among the landowners.
Barrick’s president and chief executive officer, Mark Bristow, had said last month that Porgera had “tier one potential” but faced many challenges in the form of “legacy issues and an unruly neighbourhood.”
The gold mine, located in PNG’s northern highlands region, is a joint venture between Barrick and Zijin Mining. Each own 47.5% of the mine, with the remaining 5% held by landowner group, Mineral Resources Enga.
The government has said it plans to give a portion of Barrick and Zijin’s stakes the national and provincial governments and to landowners.
“Once the transition phase has been completed, then the state will enter into owning and operating the mine after transition arrangements,” Marape said in a televised speech from the capital Port Moresby.
Porgera contributes to about 10% of the nation’s exports and employs over 3,300 Papua New Guineans.
Several other mining companies are waiting on government approval for new projects, including Australia’s Newcrest (ASX: NCM) for its Wafi Golpu gold and copper asset.
from MINING.COM https://ift.tt/3eJzu9I
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