Advancing Together With Barrick Gold

Mining Barrick Gold in Papua New Guinea: A special report on Porgera

The Southwestern Pacific island nation of Papua New Guinea (pop. seven million) is located off the northeast coast of Australia. An independent democracy, PNG is home to some of the world’s richest and most diverse traditional societies and over 850 indigenous languages. Barrick Gold holds a 95 per cent interest in the Porgera Joint Venture, one of the country’s largest and most important mining operations. 

Ranked 148 out of 182 countries by the United Nations Human Development Index, PNG is one of the poorest countries in Asia Pacific and faces significant development challenges. Thirty-seven per cent of the population live below the country’s national poverty line. PNG has a limited formal economy, with a large segment of the population reliant on subsistence agriculture. A large proportion of the population are illiterate, particularly women.

Only about 40 per cent of Papua New Guineans enroll in school. Development of the country’s natural resources is a principal engine of economic activity. As PNG undergoes modernization, law and order issues remain a serious concern, affecting development and foreign investment.

      • One of PNG’s largest resource projects, located in the highlands of Enga Province.
      • One of largest private sector employers (2,500 employees, 500 contractors).
      • Operated by Porgera Joint Venture (PJV). Barrick Gold owns 95 per cent. The Enga Provincial Government and Special Mining Lease landowners own 5 per cent.
      • The mine comprises a large open pit and an underground operation and produced about 551,000 ounces of gold in 2009.

Prior to the mine commencing operations in 1990, the region had very limited access to primary health care, education and other basic services. There has since been a vast improvement in the provision of these services. Through the PNG Government Tax Credit Scheme and donations, PJV has invested over $60 million in health, education and community infrastructure (e.g. roads, schools, medical facilities).

PJV has built or improved dozens of schools, including funding scholarships for over 700 students. An adult literacy program has helped more than 2,500 people learn essential reading and writing skills. A further $40 million has been spent on sponsorships and training to improve the skills of employees.

The mine provides ongoing funding to the local Paiam hospital, medical clinics and maternity wards, and logical support that allows government health workers to reach isolated populations. PJV also supports a comprehensive HIV/AIDS program for employees and the community, as well as the government’s child vaccination program.

PJV accounts for approximately 12 per cent of PNG’s national export earnings. The mine has paid more than $525 million in taxes, duties and royalties since 1994. Since operations began, the mine has awarded over 20,000 contracts to local and national businesses, with a combined value of nearly one billion Kina, or $500 million.

The Porgera mine sits high in the mountains, at elevations of up to 2,700 meters, in a remote valley of weak rocks and frequent slope failures. Tropical rainfall is very high and earthquakes and landslides are common.

Due to the distinctive characteristics associated with the area, the practice of riverine tailings disposal was permitted by the PNG government in 1989 before Barrick Gold acquired its interest in the mine in 2006. While this practice is the subject of much debate, it is considered the safest way to dispose of  tailings at Porgera.

Porgera’s Environmental Management System includes:

      • Stringent environmental management and monitoring
      • Tailings fully treated before discharge, including cyanide destruction and further neutralization. 
      • Compliance with permit requirements, including stringent water quality limits for discharges
      • Extensive water quality sampling on the health of the river downstream (chemical and biological indicators).
      • Results reported to government and local stakeholders.
      • Processes developed with Australia’s CSIRO (Commonwealth Scientific and

Industrial Research Organisation).

In 2006, Barrick Gold launched a $5 million, two-year review of tailings management which examined alternatives to riverine tailings discharge. The study identified significant risk factors in ensuring a stable foundation for a tailings storage facility due to high rainfall, seismic activity and steep, erodible terrain. Illegal miners also presented a risk to the long-term stability of the dam structure. The study found that tailings storage techniques and engineering have not advanced enough to sufficiently address these significant risk factors.

Part 2: Q&A with Nigel Agonia, chairperson of the Porgera Environmental Advisory Komiti