Ok Tedi Mining Limited (OTML) recently renewed its Special Mining Lease (SML) 1 (0), gaining an additional 20-year lease term from 2022 to 2042.
This is the second SML 1 (0) lease term extension for OTML.
During the momentous event on 23th April, the Minister for Mining, Hon. Muguwa Dilu, encapsulated the rich history, significant achievements, and promising future of one of Papua New Guinea's premier mining ventures.
Hon. Dilu said: “As an SOE (State Owned Enterprise), OK Tedi has been paying healthy dividends to the state every year, thus contributing to the economy, government revenue and improving livelihoods in communities around PNG.”
“Last year, OTML announced that the mine’s life will be extended to 2050 and a potential future income of K30 billion. So it was not hard for the government to renew the Special Mining Lease for OK Tedi because the old SML had expired. The granting of the new SML will now allow OTML to continue operations for the long term,” he added.
The process, initiated SML 1 (0) lease, was granted in 1981 and expired in May 2002, but was extended for another 20 years until its expiration in 2022.
An application for the renewal of the SML 1 (0) and associated leases for mining purposes in compliance with the Mining Act 1992 provisions was lodged with the Mineral Resources Authority on 20th December, 2021, resulting in the current extension grant.
Furthermore, the SML 1 (0) lease renewal includes renewal of 22 Lease for Mining Purposes (LMP) and two (2) Mining Easement, which are tied to the term of SML 1 (0).
The 24 ancillary leases host supporting infrastructure for the mining operations, while the SML 1 (0) lease is the host area for active mining and milling operations activities.
Minister Dilu reiterated: “The renewal of the SML clearly demonstrates the government’s confidence in OTML.”
According to the OTML update during the significant event, the Company is also currently carrying out its awareness sessions throughout its impacted communities in preparation for its Community Mine Continuation Agreement (CMCA) extension review, which is expected to be completed in October 2025 with the signing of the Agreement to continue mine operations.
Hon. Dilu likewise lauded the leadership of Hon. William Duma and regulatory support from the Mineral Resources Authority (MRA). Since commencing operations in 1984, OTML has transitioned from a gold mine to a prominent copper-gold operation, contributing substantially to the nation's economy and community development.
OTML's ownership structure underscores the country's commitment to empowering its people through resource ownership. Over the years, the company has made significant contributions to the nation's economy and local communities.
With 5.17 million tonnes of copper, 15.9 million ounces of gold, and 36.4 million ounces of silver produced since inception, OTML's operational growth is undeniable.
The company has made significant financial contributions to the state over the years, demonstrating its commitment to various stakeholders. This includes:
- PGK 13 billion in dividends to PNG shareholders
- PGK 515 million to the Tax Credit Scheme (1997 – 2022)
- PGK 972 million for the CMCA Payments (2001 – 2021)
- PGK 10.2 billion in taxes and duties
- PGK 1.5 billion in compensation
- PGK 1.3 billion in royalties
OTML’s current production, export volume earnings in 2022, OTML has contributed 3.6% of PNG’s Gross Domestic Product. In 2023, it declared a K450 Million Dividend, underscoring the company's substantial impact on the economy and local communities.
Hon. Dilu also expressed gratitude to the board, management, and staff for their dedication and resilience, especially during challenging times like the COVID-19 pandemic and drought.
Looking ahead, OTML's future is promising, the minister said, as the company is positioned for sustained growth. Strategic projects outlined in its business plan are expected to generate K30 billion in social benefits over the next 27 years, reinforcing OTML's role as a catalyst for economic development and community empowerment.
Minister Dilu added: “The Ok Tedi mine has been operating for 33 long years. OTML as a SOE has been operating for 22 years. We have history, we have experience, and as a business, the future is just fine. I want to see OTML grow in the following areas:
- I want to see OTML operate another mine outside of Western Province. PNG is a big country; I am sure OTML can operate a second mine in the country.
- Or like Oil Search Limited had done, OTML can go international. The world is a big place. Surely, we can find another place with the same or better resources that we can open up another mine.
- Another option that I think OTML should consider is downstream processing. We should start a serious conversation on refining our copper onshore and export the finished product to markets overseas. The benefits are huge. OTML is best placed to do that.”
OTML Managing Director and Chief Executive Officer, Kedi Ilimbit, also spoke at the SML 1 presentation event at the Stanley Hotel in Port Moresby.
He thanked all stakeholders involved in furnishing the extension of the SML 1 (0), citing OTML’s gratitude and excitement in continuing to explore opportunities for sustainable resource development in the region while also providing social and economic benefits to its impact communities and the country.
Mr Ilimbit emphasized OTML’s commitment to fulfill the environmental, legal, and social obligations, maintaining positive relationships with the communities impacted by the company’s operations, and securing the social license to operate, which is vital for its ongoing success.
