History of the Government and Mining in Papua New Guinea

Last updated: September 2019

Papua New Guinea (PNG) has a long history of mining, and the extractives industry has been central to development of the nation. While some may label PNG as being blessed with an abundance of mineral resources, others argue that it may instead be labelled as a ‘resource curse’. Auty first used the term, arguing “not only may resource-rich countries fail to benefit from a favourable endowment, they may actually perform worse than less well-endowed countries” (1993, p. 1). If one examines the history of mining in PNG, in particular the litany of mining projects with disastrous ecological and human rights records, such as Panguna, Porgera, and Ok Tedi, it is clear that this resource curse exists. Due to this pattern, it is essential to look at the role of the government, as it is not only a key stakeholder but also possesses the power to police and scrutinise various mining projects.

The following section will use the Ok Tedi, Panguna, Porgera and Lihir mines to show an overall theme of government mismanagement and mishandling. It is important to remember that all of these mines, with the exception of Lihir (which began in 1997) began production before the introduction of the Mining Act 1992 and the Environment Act 2000. In most instances, all mining companies involved were not held to existing legislation such as the Environmental Planning Act, but were instead bound by their own agreements passed by the Papua New Guinea Parliament (Banks, 2001, p. 36). It is crucial to question whether such legislature would have contributed towards the government taking different courses of action.

Location of Ok Tedi, Panguna, Porgera, Lihir and Solwara 1 Mines

Ok Tedi Mine

The Ok Tedi mine is located in the Star Mountains of Western Province. Ok Tedi Mining Limited (OTML) began mining for gold in 1984. OTML was a joint venture of Broken Hill Proprietary (BHP), the PNG government, and Inmet, a Canadian mining corporation (Banks, 2001, pp. 16-17). Despite the intention to extract gold, it soon became one of the world’s biggest copper mines, producing over 400 million tonnes of ore by 1996 (World Wildlife Fund, n.d.-b).

A condition of the mining agreement with the government stated that a tailings dam was to be built to filter the waste material. Although this was met by BHP, a landslide destroyed the dam and the company successfully negotiated to continue operations without a new dam (World Wildlife Fund, n.d.-b). This led to toxic mine waste being pumped into the nearby Ok Tedi River (Hettler, Irion, & Lehmann, 1997, p. 280), a tributary of the greater Fly River.

It is estimated that 90 million tonnes of waste rock, tailings and other particles were released into the river during each year of production, resulting in a range of severe ecological impacts on the river and surrounding land (United Nations Environment Programme, n.d.). The amount of waste disposed, for example, has exceeded the carrying capacity of the river and led to the width between the river banks increasing by over ten metres. Additionally, suspended materials are said to be carried down hundreds of kilometres of river systems, including the Fly River, and can be traced in the Gulf of Papua (Hettler, Irion, & Lehmann, 1997, p. 280). Studies have reported a dramatic loss of fish stock and the dieback of rainforests along the river’s edge (Bice, 2013). As a result, over 30,000 people that are estimated to live along the river are no longer able to
harvest from their gardens or catch fish from the river because of health hazards, thereby drastically impacting their way of life (World Wildlife Fund, n.d.-b). In an ethnographic interview conducted by Stuart Kirsch and a discussion of the impact on local quality of life, one person pleaded that “we are hungry, we are angry, and we are not happy about the pollution” (Kirsch, 2007). Many have noted that the overtly regional impact of Ok Tedi presents a different case to mines that simply affect the communities within close proximity to the area. This is due to the mass pollution of the river system, and thus the scope for those affected becomes far wider and more difficult to address (Banks, 2001, p. 25).

Panguna Mine

The Panguna copper mine is located in the Autonomous Region of Bougainville (AROB). Operated by Bougainville Copper Limited (BCL, owned by Australian company Conzinc Rio Tinto), Panguna began in 1972 and was the world’s largest copper mine at the time (Agnew, 2018, p. 1). The financial success of Panguna was crucial in funding the Independence of PNG in 1975 (Havini, 2013, p. 43).

Earlier in 1964, before mining began, rights to the mining site traditionally held by the Nasioi people were stripped away by the Australian government, which was still in colonial administrative control of PNG at the time (Phillips, 2015). The Bougainville Copper Agreement (BCA) states that the Australian government were to assist the Company in carrying out mining activities and also intervene with anything that may hinder the mining process (1976, p. 8). There are also policies in the BCA for BCL to dispose of tailings and other waste in a method that is efficient and viable for the overall operation (1976, p. 25). Roughly 50 million tonnes of tailings were dumped into rivers during each year of the mining operation, destroying the ecology and surrounding land (Phillips, 2015).

In November 1988, due to many grievances concerning a lack of compensation for ecological and social harm, the Bougainville Revolutionary Army (BRA) began their crusade against the mine and BCL by disrupting operations in any possible manner. Less than four months later, the PNG government sent in PNG Defence Force troops in an attempt to eliminate the BRA and reclaim an important state asset. After operations stopped due to the violence, the BRA continued their stronghold and showed no signs of backing down, mainly due to none of their demands being met. The BRA were also seeking the secession of Bougainville from PNG. In early 1990, the PNG government attempted to stop the rebellion, including implementing a blockade, only to withdraw a few weeks later on the grounds of an unstable ceasefire (Filer, 1990, p. 1)

Former Prime Minister Michael Somare has claimed that Rio Tinto were driving many of the actions and decisions of the government, particularly in imposing the blockade (Thomson, 2011). In a sworn affidavit Somare states that the government was controlled by Rio Tinto due to its financial presence in PNG and that BCL played an active role in Bougainville military operations by supplying many of the weapons, supplies and transport for troops. Somare argues that if it were not for Rio Tinto’s involvement, the government would not have been involved in any warfare or bloodshed (Thomson, 2011).

The Panguna mine disaster has been described as the worst political and economic crisis since PNG’s independence (Filer, 1990, p. 1). One could also argue that it is the biggest social crisis to occur in the country, as over 20,000 people lost their lives in the civil war (Radio New Zealand, 2018c). Despite such a violent past, current Prime Minister Peter O’Neill has made it clear that the mine could still be reopened in upcoming years and that ultimately, the national government will override any prohibition made by Bougainville (Radio New Zealand, 2018c).

Porgera Mine

The Porgera Mine is situated in the Porgera Valley, Enga Province. It began production in 1991 and is owned and operated by the Porgera Joint Venture (PJV), of which the mining company, Barrick, is the majority shareholder. The remainder of shares are held by the national government, provincial government and local landowners (Golub, 2014, p. 5). Like the other mining projects mentioned in this section, Porgera has been one of the most productive mines in the world (Golub, 2014, p. 5). The project not only shares this similarity with other mines, but also its method of waste disposal. More than 95% of the collected ore is discharged as tailings into the Pongema River, a tributary of the Strickland and Fly Rivers (Golub, 2014, p. 5). Villagers who live along the river system through which tailings are deposited suffer greatly from the impacts of the waste (Coumans, 2006). Somewhat ironically, Barrick warned locals not to use the river due to the high levels of mercury and other toxic elements (Coumans, 2006), thus showing that they knew full well the impact the disposal would have, and yet took no measures to mitigate harm.

Barrick security guards are authorised to use lethal force (O’Malley, 2009) and have admitted to killing people who have wandered into the mine area and taken ore (Coumans, 2006). In 2009, police raided villages and burned down hundreds of houses (Amnesty International, 2010, pp. 3-4). On top of this, the government approved ‘Operation Ipili’ which involved the deployment of additional police and the heavily armed Mobile Squad in order to quash locals taking ore illegally from the mine (Amnesty International, 2010, p. 5). The mining company supported these troops by providing food, accommodation and fuel (Amnesty International, 2010, p. 5).

Lihir Mine

The Lihir mine is located on Lihir Island, off the northeast coast of New Ireland. Production at the Lihir gold mine began in 1997. It is owned solely by Newcrest Mining. Like the other mining projects discussed, it is also one of the biggest producers of gold in the country (Fitzgerald, 2012). The mine pumps 110 million cubic metres of waste and dumps 20 million tonnes of waste rock into the nearby harbour each year. This conflicts with the London Resolution, signed by the PNG government, which makes the dumping of waste into oceans illegal. Lihir is also one of the six areas in PNG that is identified as having extremely rich biodiversity (Forest Peoples Programme, 2003, p. 12).

The introduction of the mine has profoundly changed local people’s lives. Due to dumping waste in the sea, people have been forced to buy salt to cook with, have had their beaches lost through land reclamation and seen their villages bulldozed to make way for piles of ore (Papua New Guinea Mine Watch, 2015b). Additionally, local people also claim to no longer be able to live a Melanesian way of life as the profits of the mine have made them greedy and self-centred (Forest Peoples Programme, 2003, p. 19).

In comparison to the other mining examples included in this section, the Lihir mine sets a better socio-environmental standard, despite the issues discussed. For example, operations only began after an agreement was made between the community, the government, and the company (Bainton, Ballard, Gillespie, & Hall, 2011, p. 88). At the same time, however, the agreement does not outline any provisions or regulatory frameworks for the preservation of cultural heritage (Bainton, Ballard, Gillespie, & Hall, 2011, p. 89).

Underlying Themes

The examples of Ok Tedi, Panguna, Porgera and Lihir demonstrate that PNG has a troubled history of mining developments. In all cases, the government has acted in a way that puts the interests of the foreign multinational corporation and their own economic gain over that of local social and environmental impacts, which are classic features of a capitalist regime (Schultz, 2014). In some instances, the government has colluded with mining companies to perpetrate violence against aggrieved local landowners, such as in Porgera and Panguna. The repetition of these events and the problems that these cases demonstrate, shows that there has been little active effort to change the way such developments are handled. A good example of this is the Prime Minister’s discussions around re-opening the Panguna mine, which ignores the history and devastation that was caused by the project. The Autonomous Bougainville Government (ABG) led by John Momis, publicly supports this move, but the attitudes of local landowning groups are divided and contentious.

Reference

  • Phillips, Hayley. A Sea of Voices: Deep sea mining and the Solwara 1 Project in Papua New Guinea. Diss. The University of Waikato, 2019.

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