O'Neill must be Dreaming

[Tree]

O’Neill must be dreaming: opinion

Blair Price Wednesday, 10 April 2013 PRIME Minister Peter O’Neill amazingly believes that the management of the Ok Tedi mine will remain unchanged if his government renews and awards itself the mining lease next year. New areas in red and blue for mining at Ok Tedi under the MLE project. Image courtesy of OTML. “We will take possession of the mine,” O’Neill said at a recent press conference, according to The National.  “The mining lease has already expired on March 31 [2013]. We have extended it to get our house in order but the ownership of the mine will be transferred to Papua New Guinea on the first day of January, 2014.” While this unexpected development will further burn PNG’s risk ranking profiles, O’Neill has descended into the world of make-believe with his claim that the government is not trying to take over management of Ok Tedi.  “I’m the first to acknowledge that I have no knowledge of running a mining company,” he reportedly said.  “The management will continue to manage, we’ve already had discussions with them but the ownership must go to where it was intended – that was that it was intended to be a gift to the people of Papua New Guinea.” Without getting drawn into the failings of PNG Sustainable Development Program, the Singapore-based company set up by BHP Billiton a decade ago to majority-control Ok Tedi for the benefit of PNG, O’Neill has overlooked the fact that PNGSDP owns 63.4% of the mine operator Ok Tedi Mining Limited.  It isn’t a mining lease, it is the company that operates the mine and it’s a big gamble to think its management will remain at Ok Tedi solely at the whim of O’Neill.  Both the PNG and Western provincial governments collectively own 36.6% of OTML but they will need 100% to keep the existing contracted management in place and any event which leads to such an outcome would undoubtedly trigger some fallout.  Let’s not look past what O’Neill is effectively doing either. By threatening to not renew Ok Tedi’s mining lease or approve the mine life extension project to achieve his political goals is extortion. Having consolidated his power thanks to a constitutional amendment which protects him from votes of no confidence until 2015, it does not take too much effort to contemplate how O'Neill's PNGSDP game plan could be about even more power.