Tuesday, July 28, 2015

Mine faces closure

Source: The National, Tuesday July 28th, 2015
By SHEILA MALKEN
 
Managing director and chief executive officer Peter Graham in a memorandum to staff last Friday said the company was taking the step to “address the urgent need to improve our financial performance to ensure long term-term business viability in a low-price environment, and our response to the immediate impacts of dry weather”.
He said copper and gold prices “are at the lowest point for many years”.
“The recent failure of the chasm which has prevented access to higher grade ore has compounded the situation,” Graham said.
He said the dry weather had placed further stress on the company, “preventing shipment of copper concentrate and the generation of revenue, and the limited re-supply of critical stocks of diesel and food”.
The company expects the dry weather to continue for around six months, similar to that experienced in 1997/98 when operations were shut down.
The number of expatriates will be reduced by 30 per cent and nationals by 15 per cent, with some work performed by OTML “may be outsourced”.
“We must prepare for a temporary and orderly shutdown of operations over the next week or so.
“We will continue operations for as long as we can, but the time horizon is short,” he said.
The company has been the largest employer in Western for over 32 years. It did not say yesterday how many workers it had but the 2013 figure indicated it employed 2310 people and 5147 contractors. Most (95 per cent) are PNG nationals and 37.3 per cent from Western.
More than 2000 students attend the three schools in the mining lease area – Diwai International, Tabubil Secondary and Tabubil Primary.
Diwai International School will be closed on Friday.
Principal Kevin McCrae told The National that they were following the information on Graham’s memorandum. The school has 260 students.
“We have only two classes in Grade 9. The Grade 8 students will need to transfer to other schools so that they can sit for the national exam,” he said.
“All students at Diwai International have been given certificates to help them enrol elsewhere. Currently the class is running as normal, but we understand most people will be leaving town next week.
“It is
 
obviously a traumatic experience for students, teachers and parents.
“We are working to make the school closure as smooth and unsettling as possible.”
Tabubil Secondary School has about 1000 students and 29 teachers.
Tabubil Primary School head teacher, identified only as Mrs Na’awi, said she would comment on the situation later this week.
A teacher in Kiunga said four schools which depended on the shipments of fuel from OK Tedi might be forced to close down too.
They are St Gabriel Technical Secondary, Kiunga Secondary, Ningrum High School and Aiambak High School.
The company in a statement said it was coordinating with the Western provincial administration on emergency response planning.
“OTML management is focused on sensitively handling the changes that will impact the workforce and communities and ensuring the mine is positioned for an efficient restart when weather conditions allow, and for long-term business viability.”
 
OK Tedi Mining Limited is preparing for a temporary shutdown of its operations because of the “very challenging business environment” it is facing and the impact of the dry weather. Most employees are to be sent home, and more than 2000 children have been advised to find other schools outside its area of operation in Tabubil, Western.  
Shutdown will hurt
Source:The National, Tuesday July 28th, 2015
THE temporary shutdown of operations announced by Ok Tedi Mining Ltd will affect it, the Ok Tedi Development Foundation says.
OTML yesterday announced a “temporary shutdown” of its operations.
In a statement, the State-owned open-pit copper, gold and silver mining company said the shutdown would be temporary and the
company would continue operations while critical supplies allowed.
The company said the situation resulted from the dry weather that was already significantly impacting it operations.
“River traffic on the Fly River into and out Ok Tedi’s main river port at Kiunga has been unreliable for some weeks due to low water levels,” it said.
“Diesel stocks for power generation and mining operations cannot be sustained, and replenishment of food stocks is affected.
“Transport of copper concentrate product to Port Moresby for on-shipment has been unreliable, creating uncertainty with regard to cash inflows necessary to sustain operation.
“Further the low river flow impacts operation of the Ok Menga power station, which is the main source of power for Tabubil and the OTML operations.
“As a result power rationing has commenced in Tabubil and Kiunga,” OTML said. When contacted yesterday, foundation media and communications officer Domininc Krau confirmed certain operational restrictions had been put in place for the foundation.
“Yes this affects OTDF in that certain operational restrictions have been put in place by chief executive officer Ian Middleton,” it said.
“Of note are restrictions on light vehicle usage and fuel/petrol usage and that all consultants and contractors engaged by OTDF are to leave the site.
“As for reduction of employee numbers at OTDF, there will be a reduction, however this will be planned in accordance with an organisation restructure.
“Further restrictions will depend on the weather, commodity prices and OTML management decisions however, we will continue to maintain contact with our CMCA community partners.”
The foundation manages community development benefits from Ok Tedi mine operations on behalf of the 100,000 river residents living in 156 villages throughout Western.

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