PNG Government Moves To Takeover Ok Tedi Mining

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O’Neill alleges OTML chairman ‘represents foreign interests’

By Alexander Rheeney

PORT MORESBY, Papua New Guinea (PNG Post-Courier, Sept. 18, 2013) – The O’Neill Government is determined to take over as major shareholder of Ok Tedi Mining Limited (OTML) in Papua New Guinea despite growing criticisms of the move by PNG Sustainable Development Program (PNGSDP) and industry observers.

Former Prime Minister and current PNGSDP and OTML chairman Sir Mekere Morauta, whose government established the PNGSDP in 2002 after striking a deal with BHP Billiton to enable its 52 percent shareholding in the OTML to be held by the Singapore-registered company, launched a scathing attack against the O’Neill Government, describing the takeover proposal as an attempt by Prime Minister Peter O’Neill to "expropriate" the company’s shareholding in the Western Province mine without payment.

However, the PM in a press conference in Port Moresby yesterday slammed the former PM and PNGSDP CEO David Sode, saying the PNGSDP had mixed success in its various programs and its failures were notable for an organisation that was "growing like a bureaucracy" in PNG.

[PIR editor's note: Meanwhile, Radio New Zealand International reports that PNG's parliament has passed amendments to the Ok Tedi Mining Agreement which will give 100 percent control of the mine to the government.]

"We know he (Sir Mekere) represents BHP on that particular board, he does not represent the people of Papua New Guinea, he does not represent the people of Western Province. He does not represent Western Provincial Government in any shape whatsoever. His interest is very clear: he represents foreign interests, he represents BHP. Now our Government is trying to correct the mistakes of the past. We are trying to ensure that there is transparency and accountability in the way that Ok Tedi is managed, in the way that PNG Sustainable Development Program is managed and it must be done for the interest of the people of Western province and the people of Papua New Guinea as a whole," he told reporters.

"The assets of Ok Tedi and the assets of PNG Development Program is not Sir Mekere’s, it is not BHP’s, it is the people of Western province and it is the people of Papua New Guinea who rightfully own those assets.

"That is why it is important that we manage them in consultation with our people, it is an asset that is rightfully theirs. It is must be invested and managed transparently for their own interests and that is for the interest that we want to pursue."

A bill to enable the transfer of the PNG Government’s shareholding in the PNGSDP and the OTML to the State will go before the National Parliament for vetting, a process which Mr. O’Neill indicated yesterday should be completed by the end of the week.

"PNG National Government is a shareholder in PNG Sustainable, is a shareholder in Ok Tedi mine. We are now taking over management of those shares directly by ourselves through legislation that we will pass this week. There will be no more debates, there will be no more discussions."

But former mining minister Sam Akoitai yesterday described the O’Neill Government proposal as ill conceived, saying it was an attempt to use the revenue generated by the mine to cover the budget deficit that Treasurer Don Polye revealed in Parliament last week.

Ok Tedi mine landowners and representatives of the mine-affected communities have also come out criticising the proposal, saying they were not consulted.

It is understood PNGSDP and the OTML are currently considering their all their options.

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