Barrick faces huge Porgera claim

BARRICK Gold’s attempts to sell the Porgera mine in Papua New Guinea may be stymied by a multibillion dollar claim filed by local landowners.
Barrick faces huge Porgera claim Barrick faces huge Porgera claim Barrick faces huge Porgera claim Barrick faces huge Porgera claim Barrick faces huge Porgera claim

The Justice Foundation for Porgera (JFP), which represents 14 landowner clan agents in the Porgera region of PNG, has submitted a position statement to Barrick and its PNG subsidiary Barrick Niugini outlining irreparable losses as a result of social, economic and environmental damages caused by the Porgera gold mine.

JFP is seeking "billions of dollars" in compensation on behalf of landowners.

The position statement claims that landowners' subsistence and livelihoods were catastrophically changed as a result of the mine's expansion, and that Barrick Niugini breached agreements pertaining to environmental standards, the relocation of displaced landowners and the number of fly-in, fly-out workers to the region.

The group also highlighted a 2011 Human Rights Watch report which outlined gang rapes of female trespassers to the mine by Barrick-hired guards.

JFP said the position statement was sent to Barrick on February 24, five days after Barrick announced it was looking to sell its 95% stake in Porgera.

The group says Barrick is on notice to disclose the pending legal claims to potential buyers.

Mineral Resources Enga, which holds the other 5% of the mine in trust for landowners, is also concerned about the impending sale.

"Barrick will sell its interests without proper notice and exit PNG leaving the landowners with a new owner who will not provide restitution for the damage left behind or that MRE, the landowners or citizens of PNG will be left with an insurmountable bill to remedy the social and environmental damage," MRE chairman and director Kurubu Ipara said.

A group of specialists, including lawyers, scientists and film crew, have recently conducted a fact-finding mission to the area to gather data and evidence to support JFP's claims, including photos of impoverished townships, harsh living conditions and poor quality infrastructure, as well as testimony from landowners.

In a report this week, UBS noted the poor relationship between landowners and the mine operator.

"As a result of these social issues and questions around the riverine tailing disposal, we believe any potential acquirer would need to consider the implications around closure and rehabilitation costs," UBS said.

Toronto-based Barrick could not be reached for comment.

Porgera is slated to produce 500,000-550,000 ounces of gold at all-in sustaining costs of $US1025-1125/oz this year.

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