Papua New Guinea
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Forum outlines benefit sharing for Porgera

A total of US1.5 billion (K5.4 billion) from the Porgera mine once commences operation will be passed on to the landowners and the provincial government as part of their 15 per cent take in the Porgera mine for the period of 20 years of the mine’s life.

The 36 per cent state take through Kumul Mineral is estimated to be around US1 billion ( K3.6 billion) dividends for the next 20 years given that Kumul Minerals will have to repay the government’s equity over that period.

Chairman of the State Negotiating Team, (SNT) Dairi Vele outline this benefit sharing at the Porgera Community Development Agreement (CDA) consultations in Alotau, Milne Bay Province.

Mr Vele based the figures on the current gold price of US$1,945 per ounce (K7million).

Other benefit sharing has also been outline including the royalty, business development grants, infrastructure grants and for the first time introduced, the social contribution funding.

Mr Vele describe this benefit sharing as the biggest for the life of Porgera in the country


with the landowners and state benefiting more than it usually had before.

“For the royalty it will be US774million (K2.8 billion).

For the first time the company Barrick doing in Porgera, will do a social contribution. When the mine starts they will contribute US15 million from day one which is a total of K56 million, getting everything ready for the mine to start.

“They will also give a US3 million (K12 million every year for 10 years) It will not come from the government and the company of the government , it will come from their pocket, they will give to the landowners,” he said.

On top of that, the government also will give K900,000, even before the agreement is sign and mine begins operation.

Mr Vele said K100 million of that will be for the Business Development grants to get the business which have been affected when the mine closes get back to its feet.

“In infrastructure wise , K100 million will be given every year for 7 years (K700 million) these funds will be go to the SML and other benefit for the infrastructure apart from project,” he said.

Other discussions at the forum include getting the compensation agreement signed and to get the Mining Development Contract complete before it goes to the cabinet.


Prime Minister, James Marape has issued a deadline for all these process to be complete by September 16, 2023.

Under the new shareholding agreement of the mine, KMHL holds 26 per cent , Barrick Gold Corporation and Zijin Mining both share 49 per cent while the Mineral Resources Enga (MRE) has 5 per cent.