Photo: Dairi Vele
According to Dairi Vele, the Chairman of the State Negotiation Team (SNT), the structure of the Wafi Golpu gold and copper mine in Morobe Province will be different as the Special Mining Lease will be given early. This means that the developers will be given 30 months to make a final investment decision (FID). Mr. Vele stated, “We will give them 30 months to get the project (going), which is final investment decision. If they don’t do that within 30 months, then the state will take back the licence.” This is a departure from the previous arrangement where the state gave a license but had little recourse if the project did not materialize.
Mr. Vele also explained that the new deal is different from the previous one where Papua New Guinea was only going to get 20% equity instead of the legally mandated 30%. However, the new deal negotiated by the SNT includes the additional 10% equity being given free to the provincial government. To fund the additional 10%, Kumul will pay for the landowners and the provincial government. Mr. Vele added, “Because we have to borrow the money to pay for it and pay our share in the project, Kumul are going to pay for the landowners and the provincial government.”
In summarizing the significance of the new deal, Mr. Vele said, “If you are given a license and you don’t develop a project, then the state will take it off, so that’s what is different now. Now we have to do all those agreements which allow you to get your lease.” This is a unique arrangement as it is not known to have been done before in a mining project.
