A new Porgera? Part II

High school on ridge overlooking Porgera Mine (Glenn Banks)

“It’s the same old blues again,” sang Eric Clapton, and there might be a few Ipili and Engan people at Porgera feeling much the same with the announcement of the start-up of the “New Porgera” gold mine a few days before Christmas (see our previous blog).

While the economic benefits to the nation and the local population have been celebrated, it’s uncertain how the mine will go about addressing the long-standing points of contention that led to its closure in 2020. As outside observers, we see a number of outstanding issues and risks.

At the Development Forum meetings in Wabag and Alotau in August 2023, the parties committed to a Community Development Agreement informed by the submissions received from stakeholders. The Mineral Resources Authority (MRA) indicated they would develop a response to all the submissions “within two weeks.” There is no public evidence that this has happened.

This continues the vagueness in development planning promises that has troubled Porgera since 1990. With no clear roadmap in place, it is not surprising that past spending has been wasteful and development progress limited. Without such a plan now, a similar trajectory seems inevitable. Andrew Mako is one who has advocated for longer-term thinking, linked to a long-term fund, which we find very sensible.

The agreement to restart the mine was made without having a revised compensation agreement in place. The intensity of initial compensation demands during the construction period took the company and the government by surprise, as compensation had not been paid within the leases at Ok Tedi, which opened six years before Porgera. However, the practice of paying compensation quickly came to define the company-community relationship, reflecting as it did the specific nature of rights to land at Porgera.

The broad principles of local landownership are clear but they give rise to a jigsaw of individual claims that have to be documented and addressed one by one. It is not clear whether the MRA, the Enga Provincial Government or the New Porgera company have grasped this and will properly resource a record-keeping system to safeguard fairness. Nor is it known whether landownership records for the period 1988 to 2020 have been safeguarded over the past four years.

The original Special Mining Lease 1 was issued on 12 May 1989. The Minister for Environment, Jim Yer Waim, had earlier written to the Joint Venture rejecting plans to tip mine waste into the river system. Undertakings – it was assumed – were made that dump sites inside the lease would suffice. But the dumps failed and seven Leases for Mining Purposes (LMPs) had to be added later to cover impacts outside the lease, doubling it in size.

It might be thought that the new mining lease, SML 13, issued on 13 October 2023, would rectify the error, but MRA’s online Mining Cadastre shows that SML13 is identical to the old SML1. The consequences are that “the key landowners” are only the people with rights to land in the SML (old or new). The rights of those people in the extended mining area are poorly defined. They must be compensated, but have no entitlement to royalty payments.

Those who remember developments in the 1990s will know that the Porgera River Alluvial Miners Association (PRAMA), which represented people in the extended mining area, won a ministerial determination of K15.2 million in 1996 (approximately K75 million at 2024 prices), and that pressure from PRAMA resulted in Australia’s CSIRO being called in to investigate damage to the river system. What will prevent this happening all over again?

MRA assurances that landowners present at the Porgera Development Forum fairly represented all groups, including women and LMP communities, and their conduct of a “sub-clan agent vetting exercise”, do not constitute a demonstration of Free Prior and Informed Consent for the re-opening of the mine. It is essential that steps are taken to address the historical grievances of all groups. There are many relevant groups beyond the Porgera Landowners Association: the afore-mentioned PRAMA, the Akali Tange Association Inc., the Porgera-Mt Kare Young Generation Association, the Porgera District Women’s Association, the Porgera Red Wara River Women’s Association, the Justice Foundation for Porgera and more.

In a society where leadership and representation are highly contested – and where women in particular are in a weak position – how can anyone be sure it is not just the loudest voices from hand-picked representative structures that are having a say?

Critically, how are the issues that many felt were intractable or non-negotiable going to be handled under the New Porgera deal? These include the resettlement of landowners, improvements in what is now called “social performance” in areas such as grievance handling and the de-escalation of conflict, the management of “illegal miners”, the implementation of measures to improve health and education services and promote sustainable economic development, and the protection of human rights, particularly for women and vulnerable people.

Based on public announcements about the mine’s re-opening, it appears the approach will be to provide significant monetary benefits – K56 million as an initial “social contribution” from the New Porgera company, with an ongoing commitment of K12 million per annum for ten years. In addition, there will be K100 million in Business Development Grants, K100 million per annum for seven years for infrastructure investments, and dividend payments worth up to K2.5 billion over the life of the mine. Further, there will be jobs and compensation payments.

The resettlement of SML and other affected landowners is to be undertaken on the basis of a Resettlement Action Plan to be developed over the next two years (disclosure: we were involved in the initial stages of several other attempts to develop such a plan at Porgera over the last 20 years). There are no plans – in the public sphere at least – to do things differently in relation to tailing and waste rock management, so the pre-existing environmental impacts will likely continue, and increase incrementally.

Is this really anything more than old wine in new bottles?

We, along with many others, would like to see the New Porgera contribute to real and equitable development for the landowners and other people at Porgera. But this is ambitious given the history of Porgera. We fear that an under-resourced, last-minute rush to pull together new agreements without clear plans to address the issues above will come back to haunt the developer, the government and especially the people of Porgera.

This is the second blog in a two-part series on the reopening of the Porgera gold mine. Read Part 1.

image_pdfDownload PDF

Glenn Banks

Glenn Banks is Professor of Geography at the School of People, Environment and Planning at Massey University, New Zealand.

John Burton

John Burton is a senior fellow in the Centre for Social Responsibility in Mining at the University of Queensland.


  • I mentioned ‘novation’ when I responded to Burton and Banks blog post on Porgera (Devpolicy 2 May 2020). ‘Novation’ is often used when the rights and obligations of a contract are relinquished by one contracting party and transferred to a new contracting party. In PNG the mining development contract is between the miner and the state. For New Porgera Ltd to step into the shoes of the former miner requires the agreement of all the parties to the contract. This includes both State and all other affected parties. Meetings were held under the auspices of the State and Barrick to ensure that consent for the transfer was obtained from all. It is an open question as to whether or not New Porgera Ltd will now take formal steps to broaden its consenting base to include distantly mine-affected landowners, land-users and their communities.

    Banks and Burton seem to be confused about the payment of royalties to mining lease landowners. The royalty is a gift of the State and is made to the landowners whose land is the source of the mined gold . The gift is an acknowledgment by the State of the partial and local sovereignty, in civil law terms, of landowners within their customary law domain.

    Prior to the transfer of the royalty money benefit by the State there must be an acknowledgment and a formal acceptance of the gift by the landowners. For the making of a mining development contract this acceptance process is described as a ‘development forum’. Since the forum involves issues pertaining to land the acceptance of the gift by the landowners, or their representatives, must be made in writing. Renewals of these acceptances were made before the re-issue of the mining development licence to New Porgera Ltd.

    Under the Mining Act the State appoints ‘agents’ to ‘find’ the project-affected landowners. Having ‘found’ some landowners these state-appointed agents must now transform themselves into representatives of the landowners. Following landowner authorisation agents may, on behalf of landowners, become the primary recipients of any landowner benefits paid out by the State.

    This downward flow of benefits via an agent ignores the ‘stickiness’ of money and encourages the emergence of hierarchical arrangements.

    Adopting a system whereby benefits are paid directly to households tends to mitigate hierarchy related issues and gender bias issues as well as producing better (but not perfect) equitable outcomes between and within households. It also counter-balances the anthropological consultant tendency to support a pronounced gender bias when describing customary landownership in PNG.

    A focus on households in the context of social mapping and landowner identification will have the effect of limiting the anthropological consultants use of idiosyncratic, in this context, concepts such as ‘zone ILGs’, ‘genealogical footprints’, ‘ground truth’, etc, and the privileging of mythopoeic monologues as key determinants of customary land ownership will simply fade away.


  • New Porgera Ltd (NPL) recently issued a statement “seeking to clarify certain matters relating to the reopening of the Porgera gold mine that have been the subject of considerable speculation and misinformation … over the past week”. The NPL statement may be read as referring both to the Banks/Burton blog post and other social media posts.

    Under the 2023 Consent Compensation Agreements NPL is currently negotiating long term compensation agreements with the agents for tenement landowners.

    The NPL statement includes the comment that NPL “would like to see the benefits being distributed directly to the household level, and not through middlemen, to ensure that the benefits actually reach the people for whom they are intended.” Payment directly to tenement landowner households is long standng practice at Ok Tedi.

    NPL may move towards a community engagement structure similar to that of Ok Tedi with its Community Mine Continuation Agreement. The Ok Tedi mining company, owned by the state, actively manages this agreement.

    Payment of benefits directly to households was suggested as the better policy for the PNG LNG project. This was strongly opposed by the Australian based anthropological consultants. Perhaps because it simply bypassed the consultants somewhat mystical concept of customary land ownership.


    Post Courier (14 March 2024)


  • I thank the authors for their blog posts on the subject of the ‘New Porgera’.

    In Part 2 the authors refer to the Free Prior and Informed Consent legal doctrine (FPIC) as relevant in the context of PNG and Porgera. This is both wrong and highly misleading. The FPIC doctrine is derived from the ‘Awas Tingni’decision of the Inter-American Court of Human Rights. The FPIC doctrine was taken up by a UN Rapporteur and incorporated within the UNDRIP, a non-legally binding agreement signed by 143 countries. Non-voting countries to the UNDRIP, neither voting against nor abstaining from voting, but absent from the vote included the Pacific island countries with traditional land tenure systems and laws; Fiji, Kiribati, Marshall Islands, Nauru, Palau, Papua New Guinea, Solomon Islands, Tonga, Tuvalu and Vanuatu. Samoa abstained.

    While the FPIC doctrine has some significance in Latin American legal context, it is generally thought to have no relevance or significance in the legal systems of many Pacific island countries. The issues encompassed by the doctrine are more than adequately covered by local statutory, common and customary law.

    Banks and Burton appear to not understand the significance of the change in the legal arrangements and management structure for the Porgera mine.

    The previous Porgera mine arrangement took the form of an unincorporated joint venture (UJV – not a legal entity). The UJV subsisted in the agreements made between the parties and is not, in and of itself, capable of being owned. What is owned are the Licence concession shares. The UJV arrangement was created by those parties holding a share of the Porgera mining exploration concession. This is a State administered concession scheme that may lead to the creation and issuance of a special mining development licence. Such a Licence is awarded on the basis of proposals put forward by the concession-holders’ nominated operator. The UJV has been a favoured vehicle in the mineral extraction industries for a very long time, perhaps centuries. The UJV parties, or co-venturers, contract not to be partners and to stand at arms length from each other. The elected, or nominated operator is chosen on the basis of technical expertise and is required to justify its mine operating costs to its co-venturers. Operating cost shares are deducted from the production share of each co-venturer. This structure guarantees transparency of mining costs. Where the government is a co-venturer and holds a share of the mining licence it gains not only revenue but also a transparent insight into the mine operating costs, and profits. This form of UJV has great flexibility. It enables mining companies who might be competing in one jurisdiction to cooperate in another and to meet or decline further calls for capital as the mine continues to develop. A UJV agreement typically provides that the licence parties owe no fiduciary duties to each other, liability is only ever several, never joint.

    The change to the New Porgera structure reverses many of the features of the UJV. The New Porgera arrangement takes the form of an incorporated joint venture (a legal entity). By making this arrangement the parties enter into a form of partnership. Liabilities become joint. Previously, under the UJV arrangements, if social issues impacted mine operations, Barrick as operator, had to petition the State. In the absence of a coherent State response Barrick was pressured by many of its critics to act as if it were the State. An incorporated joint venture, as a legal entity, may be answerable to a court.

    I expect that Barrick is hopeful that the new and transparent Porgera arrangements with the State as the dominant partner, will, over time, bring into being for Porgera a measure of the tranquility enjoyed by the Ok Tedi mine.

    It is odd that the blog authors reference the New Porgera arrangements to a New Caledonia example. The obvious comparisons are to be found with the successful Barrick mines in Tanzania and the Democratic Republic of the Congo. Barrick has re-started The Reko Diq mining development in Pakistan. The proposed Reko Diq mining structure and arrangements are the same as for Porgera. Mark Bristow has a long history, beginning in Ghana, of promoting this form of state/miner arrangement.

    Barrick intends that the New Porgera mine will ramp up to become a Tier 1 mine. This is based on a detailed assessment and modelling of the mine and adjacent sites prospectivity. Previous production figures have no role to play in this assessment and for the blog authors to cite them as meaningful in this context is absurd.

    A 2023 study by K C Hill (et al), ‘Structural and Tectonic Evolution of the Porgera Gold Mine; Highlands of Papua New Guinea’ (https://www.mdpi.com/2076-3263/13/8/234) determined that-

    “[t]he Porgera deposit is a 974-metric ton Au, low sulfidation, alkali epithermal gold deposit … the Porgera deposit is exceptional in containing a large zone of very high-grade, fault-controlled gold mineralization caused by efficient channelling of fluids up the fault zone that combined via flash-boiling during seismic fault events over an extended vertical range”.

    The study was funded by Barrick.


Leave a Comment