Monday, February 04, 2013

BHP: No link with OTML, PNGSDP

Source: The National, Monday, February 4, 2013 

BHP Biliton says the company “now has no association whatsoever with Ok Tedi Mining Ltd (OTML) or PNG Sustainable Development Program (PNGSDP)”.
The Australian newspaper reported this at the weekend after The National’s lead business story last Friday about Prime Minister Peter O’Neill warning that the government might not approve the extension of the mine life of the nation’s biggest single taxpayer, Ok Tedi, unless BHP Billiton agrees to amend the terms of the copper-gold mine’s ownership.
Also at the weekend, Ok Tedi Mine Area Impacted Association (OTMIAA) said in a statement (see separate story) it fully supported O’Neill’s stance not to be pushed by either BHP or PNGSDP into extending Ok Tedi mine life to 2025 until all issues affecting the mine and Commmunity Mine Continuation Agreement (CMCA) communities were sorted out.
“BHP’s preference was to close the mine early,” the BHP spokesman said.
“This was not acceptable to the PNG government which was concerned about the socioeconomic impacts of early closure.
“The PNGSDP is an independent company, which has provided a lasting legacy for the people of PNG.”
Journalist Rowan Callick, whose article in The Australian last November infuriated O’Neill into banning then-OTML chairman Prof Ross Garnaut from entering PNG, wrote an article at the weekend explaining BHP’s non-involvement in PNGSDP and OTML.
“Following a series of environmental problems, BHP - which built the mine in the then-remote Star Mountains in PNG’s Western province in the early 1980s - pulled out of the venture,” he wrote.
“Through an agreement with the PNG government of the day that involved a form of indemnity over environmental damage, BHP placed 63.4% of the ownership in the hands of PNG Sustainable Development Program, a trust that was chaired by leading economist Ross Garnaut.
“The PNG government holds 24.4% of Ok Tedi Mining, and the Western province government 12.2%.
“Under the rules established a decade ago, two-thirds of the dividends that PNGSDP receives are held in a fund for use only after the mine’s eventual closure.
“The figure has now reached US$1.4 billion.
“The other third goes into a development fund, which deploys about US$100 million a year, of which a third is spent on projects in Western pro­vince and two-thirds in the rest of the country.
“In 2011, the mine paid US$543 million in taxes, about 16% of the PNG government’s income.
“Last November, Prof Garnaut resigned as chairman of PNGSDP and was replaced by former prime minister Sir Mekere Morauta.
“Recently, BHP ceased appointing three of the seven PNGSDP directors.
“They are now chosen by the board itself, which also includes PNG government nominees.
“But BHP must agree to any changes in the core terms of reference under which the trust operates.”

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