Hidden Valley mine pays K37.5 million to Morobe

By MALUM NALU

Morobe Mining Joint Ventures has paid a total K37.5 million in royalties for Hidden Valley mine to the Morobe provincial government, various local level governments, and landowner groups since 2009, however, has no say on how the money is spent.

The shame of Lae…potholes in front of Nadzab Airport last Sunday as the Morobe provincial government can’t explain how it spent K13.5 million in royalty money from Hidden Valley mine.-Picture by MALUM NALU

The Morobe government receives 36% of royalties amounting to K13.5 million to date, while the balance is shared between LLGs and landowner groups.

An MMJV source provided the figures  following outrage over deteriorating infrastructure in Lae, including the pothole-filled Nadzab Airport, which has become an international disgrace to PNG.

The question of how the money was spent became a major point of contention between ousted Morobe Governor Luther Wenge and Bulolo MP Sam Basil.

Wenge and Basil had a gentlemen’s agreement that of the 36% royalties paid to the Morobe government, half was to go back to Bulolo district, but Wenge never honored that, the source said.

Basil and new Morobe Governor Kelly Naru have discussed this and MMJV is expected to receive a letter soon from Mineral Resources Authority (MRA) to start it up.

Provincial administrator Kemas Tomala told The National from Lae  that the Morobe government’s share was absorbed into the provincial budget, while LLGs were free to spend at their own discretion under the Budget Appropriation Act.

Tomala said Nadzab Airport was the responsibility of the national government under the National Airport Corporation.

“We (Morobe government) actually have an agreement with Bulolo district joint district planning and budget priorities committee (JDPBPC),” he said.

“Part of the money goes to Bulolo district while part comes to the Morobe provincial government.

“The money is absorbed into the Morobe provincial government budget.

“As for the LLGs, they have their own Budget Appropriation Act.

“It’s not for me to tell them how to spend their money on roads, bridges, whatever.”

According to the latest financials for the period July 31, 2011 to June 30, 2012, a total K13, 583, 284 has been paid to the Morobe government, breakdown being K2, 514, 575 in 2010; K5, 742, 851 in 2011; and K5, 280, 858 in 2012.

 “Payments started in October 2009 when there was some economic production from the mine and have ramped up along with production,” the source said.

“As per the Mining Act, royalties are 2% FOB revenue, less smelting/refining costs.

“Royalties belong to the state, not the company, and our only role is to write the cheques each month based on production.

“We have no authority to direct recipients on how the funds are spent, although we'd like to have a say in the matter, to ensure they are spent in a transparent manner.”

Apart from Morobe provincial government, those who have benefitted from Hidden Valley mine since 2009 include Mumeng LLG (3%, K1,128,190);  Waria LLG          (2%,  K752,127);   Buang LLG (1% , K376,063);  Wau/Rural LLG (5%, K1,880,317; Watut LLG   (5%, K1,880,317;  Wau/Bulolo Urban LLG (4%, K1,504,254); Highway Communities (0.50%,K188,032);  River Communities (0.5%, K188,032 ); Subsidiary Landowner Communities (1.5%, K564,095);  Settler Communities (2%,  K 752,127);  Wafi Landowner Association (0.5%, K188,032); Nakuwi Landowner Association (2%, K752,127);  Future Generations Trust (2%, K752,127); HV Landowners - Winima recipients (8.75%, K 3,290,555:;  HV Landowners - Kwembu recipients (8.75%,  K3,290,555); and  HV Landowners - Nauti recipients (17.50%, K 6,581,110).