Wall Section Of PNG’s Ok Tedi Mine Collapsed Back In June

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Company denies problem connected to shutdown of operations

By Papua New Guinea correspondent Liam Cochrane

MELBOURNE, Australia (Radio Australia, Aug. 24, 2015) – A section of Papua New Guinea's Ok Tedi mine collapsed in June, damaging machinery and blocking an access road, but the company insists the fall has nothing to do with the shutdown of operations.

On August 12, Ok Tedi Mining stopped operations at the open-cut copper and gold mine and stood down almost all staff, citing a lack of rain affecting river access and hydropower generation.

At the time there was no mention of the damage to the mine pit but the company said it reported the incident to the statutory authorities in PNG and has now gone public with the information, in response to a letter to the editor.

"Ok Tedi Mine experienced a failure in a section of the wall of the open pit in early June 2015, resulting in a large amount of debris sliding down into the bottom of the pit," Ok Tedi Mining Limited (OMTL) managing director and chief executive Peter Graham said.

"The fallen debris damaged one of eight hydraulic shovels and backhoes, which has since been repaired and returned to service.

"The fall has temporarily limited access to some higher grade ore until clean-up is complete, likely several months work once started."

The company denies the collapse is linked to the recent shutdown of operations, saying the closure was due to weak global commodity prices and low water levels in the Fly River.

"Ok Tedi relies on riverine transport for food and diesel and other operational supplies, and for transport of concentrate to Port Moresby for export," Mr Graham said.

Critics blame Peter O'Neill for mine's problems

Critics of the mine have blamed the PNG government for the mine's problems.

"This is the latest in a long line of disasters at the mine since prime minister Peter O'Neill took over Ok Tedi," Kata Mono said in a letter to the editor published in the Post Courier newspaper.

That takeover is the latest controversy involving Ok Tedi, which became synonymous with dirty mining during the 1980s and '90s.

BHP handed over its majority share in 2001 in exchange for legal immunity for decades of environmental damage, creating the PNG Sustainable Development Program (SDP) as a local trust fund for development projects across the country.

In 2013, the PNG government passed legislation to take over Ok Tedi and the associated $1.4 billion development fund, effectively nationalising the mine and sparking a bitter legal battle for control of the trust.

"There is no cash left in OTML because of inflated contracts being given to cronies, mismanagement of other funds, poor mine planning and administration and a critical lack of repairs and maintenance across all operational areas," said Mr Mono, who said he was writing from the mining town of Kiunga in Western Province.

Mr O'Neill has previously acknowledged his business interests in at least three companies with contracts at Ok Tedi — IT firm Remington as well as Wild Cat Developments and South West Air, both subsidiaries of Remington Group.

Mr O'Neill has denied having interests in the mine's security contractor Black Swan or securing contracts since the appropriation of the mine.

Ok Tedi management rejected the allegations of neglect and nepotism.

"Contrary to assertions in the letter [to the editor] of government interference, Ok Tedi proudly operates independently," Mr Graham said.

Mr Graham said compensation payments to landowners would be honoured next month but dividends would not be paid, due to the shutdown.

He remained upbeat about the mine's prospects.

"Ok Tedi will continue to be a successful operation once weather conditions allow a restart of operations," Mr Graham said.

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