Photo: PM Marape speaking to media after the landmark signing of the Framework Memorandum of Understanding between the Independent State of Papua New Guinea and Wafi-Golpu Joint Venture (WGJV) participants Newcrest and Harmony Gold.-PM’s Office media
Prime Minister Hon. James Marape says the State and Papua New Guinea will be the biggest winners in the giant Wafi-Golpu Mine in Morobe with a 55 per cent take in the economic benefits of the project.
PM Marape said this after the landmark signing of the Framework Memorandum of Understanding between the Independent State of Papua New Guinea and Wafi-Golpu Joint Venture (WGJV) participants Newcrest and Harmony Gold (through their respective PNG subsidiaries).
This momentous occasion was attended by Governor-General Sir Bob Dadae, PM Marape, Deputy Prime Minister Hon. John Rosso and senior Ministers, as well as Morobe Governor Hon. Luther Wenge and members of his Provincial Executive Council.
PM Marape said PNG would win by way of:
- State and PNG gain 55 per cent of the project economics;
- State equity is at 30 per cent with 10 per cent carried;
- The ten (10) per cent carried equity will be for Morobe and landowners;
- Two (2) per cent tax for fiscal stability is premium on top of the full 30 per cent tax to be paid;
- Royalty at three (3) per cent with no deductions;
- Additional US$394m for social community infrastructure that Newcrest and Harmony are putting on top of Government’s K1.2 billion Infrastructure and Business Development (IBD) grant;
- A local content forum will be held with developers, Morobe Provincial Government and landowners, where Government will be pushing for local content above 80 per cent in construction period all the way to operations;
- Additional profits tax was secured but dividends withholding tax was given away;
- Personal income tax was not treated as company’s contributions, unlike Lihir; and
- Special Mining Lease (SML) will be issued for only 30 months until investors do Front End Engineering Design (FEED) and Final Investment Decision (FID) to qualify them for extension. After FID, then cash call will be required from Kumul Minerals Holdings Ltd (KMHL)equity contributions.
“Today is a joyous occasion for the people of Papua New Guinea and especially Morobe, as we prepare to celebrate Easter,” PM Marape said.
“A framework has been established whereby Newcrest and Harmony, and the State – on behalf of the Morobe Provincial Government and landowners – will progress Wafi-Golpu Mine development so that it can start at the very earliest.
“This is a major resource, with substantial gold and copper, which will anchor our country for the next 40 years and beyond.
“It took us a while to reach this stage, however good things take time. Sometimes, you have to wait for a while to get the best results, such as today’s agreement.”
PM Marape thanked Vice-Minister for State Negotiations, Hon. Jimmy Maladina, who worked tirelessly with State Negotiations Team (SNT) Chairman Dairi Vele and his team – under Mining Minister Hon. Sir Ano Pala – to make today possible.
“What we have signed today is far better that what my predecessor Peter O’Neill signed in 2018,” he said.
“In Kina terms, this deal is K6 billion better then O’Neill’s 2018 agreement – that I tore apart – in which we had lost 10 per cent equity to the companies. This agreement is also K3 billion better than our own government’s position in April 2022.
“I also appreciate the tireless efforts of Deputy Prime Minister Hon. John Rosso, and the strong Morobe leadership led by Governor Hon. Luther Wenge and Bulolo MP Hon. Sam Basil Jr.
“In our efforts to get back more for our people, we have pushed the bar higher in a green field project, and I want to thank all in Cabinet and Government for your understanding.
“We negotiated fair and hard, and I give it to people like Dairi Vele – who under instructions – fired all cylinders for us to get better results.”
PM Marape thanked joint venture partner investors Newcrest and Harmony for their positive responses to State positions.
“We look forward to all parties working together to complete all statutory requirements to complete Mine Development Contract and SML,” he said.
“I want to also assure all our landowners and the LLGs, Districts and Morobe Provincial Government that we will complete the full requirements of law in respect to your consultations and meetings.”
