ONGOING STRIKE COSTS PNG MINE $5 MILLION A DAY

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Walkout reaches 11th day at Ok Tedi gold, copper mine

By Harlyne Joku PORT MORESBY, Papua New Guinea (PNG Post-Courier, April 12, 2010) - Ok Tedi Mining Limited (OTML) has lost about US$55 million (PGK149 million) in its production of copper and gold as a result of the illegal strike.

OTML’s public relations manager Jane Salin said the mine produces approximately 450 tons of copper a day, worth about US$7,800 per ton and approximately 1,500 ounces of gold a day worth about US$1,100 per ounce. That would be worth about US$5 million a day. The stand off by the workers has stopped production for 11 days indicating that the mine has lost about US$55 million as of yesterday in copper and gold production. The PNG government owns 30 percent of the mine as a shareholder while PNGDSPL (PNG Development and Sustainable Programme Limited) owns 52 percent and Inmet Canada, 18 per cent.

It was reported in the media last week that an estimate cost of losses at the mine is reaching up to about tens of millions of kina due to the standoff by the 1000 plus workers mostly miners working in the pits and tunnels.

The workers are members of the Ok Tedi Mining and Allied Workers Union. (OTMAWU).

The workers went on strike since the 1st of April over the alleged distribution of the SISS (Shares in Success Scheme) scheme pay outs.

They were concerned at disparities in the pay out. PNG Trade Union Congress General Secretary said the union affiliates were behind the strike which is the longest ever in the history of industrial disputes in PNG. OTML’s Managing Director Alan Breen met with Deputy Prime Minister and Minister for Mining Dr. Puka Temu last Friday and requested for government assistance in resolving the strike.

Mr. Breen said following the meeting, Temu dispatched a team of mediators to Tabubil on Saturday to assist in reaching a peaceful resolution of the dispute and an orderly return to work.

The Government officers met with the OTML management and the executives of the union and other stakeholders on Sunday and today to develop a plan to get all parties to a round table agreement and the workers back to work. Breen reaffirmed in an earlier statement that OTML were amongst the highest paid in the country and receive substantially more benefits than other companies.

But the PNGTUC’s General Secretary Mr. Paska said the issue was not about being highly paid but the huge disparities in the payout. The Ok Tedi Mine produces 170,000 tons per year of copper metal and a million ounces of gold annually from its Mt Fubilan open cut mine.

The mine in 1999 was found to have caused major environmental damage to the surrounding area as it had since 1984 pumped millions of tons of tailings into the Fly River system.

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