Prime Minister, James Marape emphasised the importance of finalizing the Mine Development Contract (MDC) and issuing the Special Mining Lease (SML) for the Wafi-Golpu Mine in Morobe Province.
With the project being set to bring much-needed capital inflows during its construction phase while addressing the forex depletion and other associated economic problems, PM Marape stressed that time is running out to get this critical project off the ground.
Thus, PM Marape urged immediate action on Wafi-Golpu Mine development to unlock for the National Benefits, delaying further will invite frustration and discontent from landowners and local authorities.
The Prime Minister set a firm deadline, stating that the MDC and SML for Wafi-Golpu must be finalized before the 2024 Papua New Guinea Investment Week, which is scheduled to take place in Sydney, Australia, from December 6-11.
“The Framework MoU signed in 2023 is our roadmap, and it is time to act,” he added.
During a high-level meeting with the State Negotiating Team, Joint Venture Partners Newmont and Harmony, Deputy Prime Minister Hon. John Rosso, and Mining Minister Hon. Wake Goi, Prime Minister Marape emphasized the importance of immediate action.
“Time is ticking away, as a nation. We have collectively agreed that the Wafi-Golpu project must move forward—on terms that are in line with our laws and policies, especially those that ensure the State and Papua New Guinea secure 55 percent of the project’s economic benefits.”
“I am pleased that the Framework Memorandum of Understanding (MoU), which was signed in 2023, honors this commitment.” PM Marape stated.
He added that: “The project contains over 12 million ounces of gold and three million tons of copper.”
It is a significant undertaking expected to extend beyond 60 years.
“However, we have agreed to a 40-year lease, contingent on the joint venture partners commencing the project within two years of the SML issuance,” the Prime Minister stated.
Reflecting on past delays, Prime Minister Marape lamented the significant time lost due to legal proceedings and reiterated that further delays were no longer an option.
“I want to make it clear: “we cannot afford to lose any more time. The Wafi-Golpu project must advance without further delay.”
This is a project of national importance, and moving forward on key milestones is critical to the country’s economic progress.
Prime Minister Marape also highlighted the need to respect the patience of landowners and the Morobe Provincial Government, represented by Governor Hon. Luther Wenge, who have waited for years to see the project begin.
“We cannot continue to hold them in suspense, delaying any further will only invite frustration and discontent from landowners and local authorities,” Prime Minister Marape warned.
Key provisions under the Framework MoU include:
- The State and Papua New Guinea receiving 55 percent of the project’s economic
- State equity set at 30 percent, with 10 percent carried, and Morobe Province and the landowners receiving the carried
- A fiscal stability tax at 2 percent, in addition to a 30 percent full
- Royalty set at 3 percent with no
- An additional US$394 million committed by Newmont and Harmony for social and community infrastructure, supplementing the Government’s 2 billion Infrastructure and Business Development (IBD) grant.
- A local content forum to be convened between the developers, Morobe Provincial Government, and landowners, pushing for local content to exceed 80 percent during construction and ongoing operations.
- An additional profits tax was secured, with a concession on dividend withholding
- Personal income tax will not be treated as the company’s contributions, unlike in the Lihir
- The SML will be issued for an initial 30-month period, during which investors must complete Front End Engineering Design (FEED) and reach a Final Investment Decision (FID) to qualify for an Upon reaching FID, Kumul Minerals Holdings Ltd (KMHL) will be required to make equity contributions through a cash call.
Prime Minister Marape closed by reaffirming his government’s commitment to fast-tracking the Wafi-Golpu project, urging all stakeholders to move with urgency.
Therefore, “the time for action is now, we have the framework, we have the opportunity, and now we need to execute,” he said.