Executives of Newcrest mining met with the New Ireland Government on Tuesday 6th September, to revive its quarterly meetings, which temporarily ceased due to the advent of the Covid19 pandemic.
Leading the 8 member delegation was Lihir Operations General Manager Johan Labuschagne and Country Manager Stanely Komunt.
Mr Labuschagne said he was keen to create an effective working relationship based on open dialogue with the Provincial Government. While giving an overview of current operations he touched on the K1.52 billion financial contributions injected into the PNG economy this year from royalties, total taxes, production levy, and vendor contracts. Further to this Labuschagne said Lihir contributed US$487 million to the national account through acquisition of K1.711 billion of currency and K310 million in salaries and wages to Papua New Guineans working for the mine.
On New Ireland’s financial report, so far K17.2 million each (20%) has been released to the Kavieng and Namatanai District Development Authorities, K8.6 million (10%) to the New Ireland Provincial Government, K25.7 million to the Nimamar Local Level Government and K17.1 million to the Lihirian Special Mining Lease landowners (SML).
New Ireland Governor Sir Julius Chan again emphasized on the need for Provincial Governments to get a bigger share of tax revenue generated from the mining spin offs like road contracts, instead of everything going to the National purse. He reminded Newcrest of the National Executive Council’s direct breach of the Lihir MOA of 1995 which he signed when he was then Prime Minister.
“The MOA is clear the 50 percent is paid to the provincial government and then distributed to the districts. DDA’s are not governments. Implementation of major infrastructure projects and policies are made at the Provincial Executive Council level to benefit the districts and then monies from the royalties are used to fund the budgeted items which have always been captured in our yearly budgets which are approved by the Legislative Assembly. The NEC has set a dangerous precedent of breaking MOA’s any time they see fit. That’s how landowners lose trust in the Government,” said Sir J.
An update on the Lihir Ring road found that the Provincial Works Department has been working closely with Newcrest to start work on the last 27km section of the road. In total the ring road is approximately 76km. Sir J noting that the ring road is a National Government project under the Lihir MOA accepted that the National Government has been too slow in implementing the project and urged the company to fully utilize the tax credit scheme to fund the project.
Sir J said the National Government is treating New Ireland with contempt. “New Ireland continues to be the biggest contributor to the National purse and our peaceful culture of resolving disputes must not be undermined.”
Meanwhile the transfer of Londolovit or Lihir town land titles to landowner families by the company also sparked debate on how the company should administer the titles in the lead up to mine closure.
Nimamar President Stanely Tunut speaking on behalf of his LLG Council said more dialogue is needed before such a transaction is made. All parties later agreed to find a way forward to address the matter amicably.