Simberi miner, St Barbara Limited is facing significant pressure from the New Ireland Provincial Government to fulfil their obligations regarding royalty payments.
Failure to comply could result in the non-renewal of their mining lease.
The company came under scrutiny from the provincial government when Governor Sir Julius Chan found out last Tuesday, February 20th, that the Gold mine already produced 100,000 ounces of gold in 2015, which was the agreed amount for the Provincial Government to receive royalties.
The provincial executive council (PEC) was advised by Simberi’s external Government Liaison specialist Dennis Zeriga-Gati when giving the company’s quarterly report that NIPG could have negotiated for the Royalty payment back in 2015.
This prompted Sir Julius to criticize the mining company for not communicating with the Provincial Government.
He also criticized the Mineral Resources Authority (MRA) for not fulfilling its duties as a mining regulator.
“We gave the mining company a concession when they needed us the most.
We did it in good faith. You should have advised my government when you reached 100,000 ounces. MRA has failed to call up meetings every 5 years as stipulated in the agreement,” Sir J said in a statement.
He demanded an increase in the late royalty payment from 2 percent to 10 percent or the company risks not having its mining lease renewed.
“Prove to us why you can’t pay the 10%. I’m telling you now, you won’t go broke.”
“In other parts of the world, mining companies are paying 10% and higher.”
Sir J said Lihir Gold miner Newmont will be asked to do the same.