Papua New Guinea's Mining Minister Solen Loifa has cleared the way for the revised Community Development Agreement (CDA) for the Hidden Valley Mining Project to be signed, saying concerns raised by Bulolo MP Sam Basil Jr. do not warrant any further delay.
Loifa said the concerns had been assessed against applicable laws, government policies, administrative processes and agreements reached during negotiations for the revised CDA.
He said several of the issues raised relate to future negotiations for the Wafi-Golpu project or are matters that can be pursued separately by the Morobe Provincial Government, Bulolo District Development Authority and other relevant government agencies.
“I am satisfied that there are no outstanding issues that warrant any further delay to the execution of the revised Hidden Valley Mine Project CDA,” Loifa said.
Royalty distribution confirmed
One of the key issues raised concerns the distribution of mining royalties and calls for the royalty share to be increased from 2 percent to 5 percent.
Loifa said the royalty distribution incorporated into the revised Hidden Valley CDA reflects Morobe Provincial Executive Council (PEC) Decision No. 2 of Feb. 3, 2025, made during the tenure of the late Morobe Governor Luther Wenge.
Under the revised CDA, the royalty distribution includes:
-
Wau Rural LLG — 1 percent
-
Watut Rural LLG — 1 percent
-
Wau Urban LLG — 1 percent
-
Bulolo Urban LLG — 1 percent
The minister said negotiations on the revised CDA were concluded on June 13, 2025, with the positions of the relevant parties captured in the agreement.
State equity remains unresolved for Wafi-Golpu
Calls for a 5 percent state-paid equity allocation to Bulolo District in both Hidden Valley and Wafi-Golpu were also raised.
Loifa said the State has not exercised its option to take equity in the Hidden Valley project, while equity arrangements for Wafi-Golpu remain subject to future negotiations.
He also rejected attempts to incorporate Wafi-Golpu-specific financial and benefit-sharing matters into the Hidden Valley CDA process.
A proposed K200 million allocation, for example, relates to Wafi-Golpu project infrastructure development grant (IDG) funds and will need to be discussed through the Wafi-Golpu forum.
Similarly, proposed royalty allocations for Wau-Waria District, its three LLGs and the three landowner groups in relation to Wafi-Golpu will be considered during negotiations for the Wafi-Golpu CDA.
Future Generations Trust Fund
Loifa also addressed a proposal for a 1 percent environmental levy on gold extracted for sale to be paid into a Future Generations Fund.
He said future generations trust funds are established to benefit landowners, particularly through a portion of landowner royalties.
Under the revised Hidden Valley CDA, a Future Generations Trust Fund will be established after the agreement is formally executed and signed.
The government also pointed to infrastructure commitments associated with the mining project and surrounding districts.
Loifa said Menyamya District has been considered under the revised CDA through a 5 percent royalty distribution, while the Lae-Bulolo-Wau-Menyamya road is included under the Tax Credit Scheme program in accordance with National Executive Council Decision No. 172/2026.
Proposals for an Anga Wau Special Authority to coordinate infrastructure and socioeconomic development across Bulolo, Wau-Waria and Menyamya, however, are matters that can be pursued separately between the Morobe Provincial Government and Bulolo DDA.
Loifa said similar arrangements concerning Morobe's proposed Benefits Sharing Authority could also be pursued outside the Hidden Valley CDA.
Section 98 amendment
Loifa also rejected the argument that recent amendments to Section 98 of the Organic Law on Provincial and Local-level Governments require the Bulolo DDA to become a signatory to the Hidden Valley CDA or a future Wafi-Golpu agreement.
He said the amendment applies prospectively to new mines and does not retrospectively apply to existing CDAs or the revised Hidden Valley CDA.
The minister further pointed to the distinction between mining projects subject to a Special Mining Lease and those operating under other mining leases.
Hidden Valley operates under a Mining Lease (ML) and, according to Loifa, does not require a Development Forum under the Mining Act 1992.
Wafi-Golpu negotiations remain separate
Loifa maintained that issues relating to Wafi-Golpu should be addressed through the project's own Development Forum and CDA negotiations rather than being used to delay the Hidden Valley agreement.
He said questions involving the distribution of benefits to non-impact districts, including Kabwum, Finschhafen, Markham and Tewai-Siassi, could be considered through the Wafi-Golpu Development Forum and a consolidated PEC decision.
The minister's position effectively removes the remaining government-level objections to the execution of the revised Hidden Valley CDA.
For the mining sector and Morobe's local communities, the agreement is significant because it establishes the framework for the distribution of project benefits, royalties and development commitments associated with the Hidden Valley operation.
Loifa said matters already settled through the CDA negotiation process should not be reopened, while issues outside the scope of the Hidden Valley agreement should proceed through their respective legal and administrative channels.
“Accordingly, I am satisfied that the revised Hidden Valley CDA should now proceed to signing as scheduled,” Loifa said.
