Skip to content

Barrick Gold vows to fight 'nationalization' of gold mine in Papua New Guinea

rjb10959778

Barrick Gold Corp. says it will pursue all legal avenues to prevent what it's calling the "nationalization without due process" of its Porgera gold mine in Papua New Guinea.

Toronto-based Barrick, which is the operator, and Zijin Mining Group of China each own 47.5 per cent of the open pit and underground gold mine.

In a news release, Barrick said it applied for an extension of its special mining lease in June 2017 but the government refused to comply and it expired last August.

Several news outlets quoted Prime Minister James Marape as saying Friday that the special mining lease would not be extended in view of outstanding environmental and resettlement issues.

He reportedly said the government wanted to enter negotiations with Barrick to develop an exit plan that would account for the value of the assets, future operation of the mine and deal with legacy issues.

A Barrick spokeswoman declined a request for an interview.

Analyst Mike Parkin of National Bank says he estimates Porgera represents 2.6 per cent or C$1.22 billion of Barrick's net asset value and accounts for 5.3 per cent of its 2020 gold production estimate at 267,000 ounces.

Barrick said it has refused to discuss transitional arrangements for the mine as proposed by Papua New Guinea, adding the government has rejected its proposal for a new benefit-sharing arrangement that would deliver more economic benefits to the country.

It contends that environmental management practices at the mine were studied and approved by the government and audits showed it exceeded minimum standards.

With regard to resettlement, it said it has compensated and relocated more than 1,400 households impacted by the mine's operations.

This report by The Canadian Press was first published April 24, 2020.

Companies in this story: (TSX:ABX)

The Canadian Press