THE PULSE OF GOILALA – HOW WILL THE CURRENT GOVERNMENT ADDRESS THE DECLINING HEART BEAT OF OUR DISTRICT?
Since the first exploration was conducted almost 35 years ago in the Goilala region, the Tolukuma Gold Mine (TGM) has had five separate owners. Newmont Australia Ltd (1983 to 1993), Dome Resources (1993 to 1999), Durban Roodepoort Deep (1999 to 2006), Emperor Mines (2006-2008), and finally the current owners being Petromin Holdings, who is said to have purchased TGM for 1 kina from Emperor in 2008 on the rumored condition that all environmental legal liabilities were not pursued. Remember, Petromin was created as a private entity, owned 100% by the state, by the previous Somare-led Government.
Since the Petromin take over, TGM has like any mine in a remote location, had its fair shares of ups and downs. But media issues seem to only touch on some real hard facts that several ex-workers often talk about, including cyanide spills, tailings pollution, worker strike, broken promises, paying below legal minimum wage, illegal miners, and fatal shootings. Even administration issues such as EL’s not being renewed have occurred – and the mine even stopping production because it ran out of explosives!
Against this backdrop, production has been on a steady decline with Petromin, to the point where consistent, basic mining–break-even-production targets are a dream at the moment. With no noteworthy significant infrastructure upgrades or improvements under Petromins watch, is there any wonder why? The majority of equipment is from the pre-petromin days. Yes there are some new underground mobile fleets. Yes there are some improvements like new fences, some concrete around the hydro, and new land cruisers, and some new modules at the mill. But for a mine that has the potential to product 80,000oz+ of Au per year, these tokenistic expenditures from the current owner are at best too little too late, and at worst pure window dressing to disprove rumors that they don’t spend anything on their own asset and are incompetent. With the exception of the most senior management, even the helmets and heavy antique miners lamp are from pre-petromin days!
The low hanging fruit of this high grade mine has already been extracted by the previous owners. And with no actual forward plan, TGM under Petromin ownership is bound to continue failing and occur ever increasing debts. This leaves the question:
IS TOLUKUMA GOLD MINE OPERATING TO ITS FULL POTENTIAL & CAPACITY UNDER PETROMIN?
To be clear, the current O’Niell Government inherited these issues. And the current government have been working non-stop ratifying new agreements and making PNG a better place for all. The TGM issue is no doubt on their list of things to do, but there are competing priorities. Cabinet reshuffles; Manus Island, National Budget, Elections, LNG Project, APEC, etc. are all significant matters.
In fact, the O’Niell cabinet has on occasion made comments in relation to the disbandment of Petromin and the creation of Kumul Holdings. This is a PM who does what he says, who has courage to stamp out corruption and push PNG as a significant and respectable power in the pacific rim.
But as the PM is the single 100% shareholder, I imagine that he must be saddened about the loss of jobs right now occurring in the region of Goilala. So many familys are effected because of the low or no production. So many children of the next generation hoping to work at ‘their mine’ are forced to look elsewhere for jobs and skills. In POM, so many suppliers are also effected by the minimal demand for resupplies to TGM. There is a domino effect and it is all negative.
LANDOWNER CHAIRMAN RECOGNITION
Petromin arrogantly claim they are fulfilling their obligation by dealing with George Gusi, the former chairmen who was voted out some time ago… knowing full well they can control him as their puppet…. While the majority of the surrounding community voted him out.
While we Papua New Guineas are proud and patient people, and we sit and wait in a holding pattern for the government to do the right thing and remove Petromin from TGM, the complete disregard by Petromin for the newly elected land owner chairman, being Epi Koga, is what has hurt us the most.
Ironically it was George Gusi who made his people proud by banning Petromin from entering TGM by instilling the customary ceremony taboo of the pig slaughter, beetlenut breaking, and tanget plant in June 2012….. but he succumbed to the influence of Petromin and let them back on site to his peoples detriment a few weeks later. Hence why Epi has so much support – he has the courage to fulfil what George started and then did a backflip on (maybe his new office at Petromin house helped change his stance?). Whatever it was he people got no benefit, and Epi was rightfully elected.
CURING THE CANCER – WILL PRIVATE OWNERSHIP EVER RE-OCCUR?
In Papua New Guinea, we have this mentality that, since the Government owns, well since the people owns really, since I own “a business”, I really do not care if I make profit or not. Its more of a “food garden”, where I can go into it get what I want, as and when I want to. While all alone not bothered about what tomorrow has in store for me. It is almost like people want to say they own a gold mine for the sake of owning it – even though it is a business model with no hope for profit!
When something like a mine is government backed, there are short term benefits. But long term, it does not matter about profit, the government is there to give you a hand out. To pay the wages. To keep it moving, even if you run with an increased DEBT and more debt and broken equipment and no qualified staff, the show keeps going no matter how bad.
The mine needs to be run as a business. And a business needs to make profit. This is the mental attitude that it non-existent at TGM.
A privately owned and operated Gold Mine would NEVER EVER let this happen for so long or to such a scale. It is just not possible as the money would soon run out and you would be bankrupt. Only government operations can continue to run in so much debt for several years without anyone blinking (this rule applies around the world).
Private operations focus on business models and profit. Your neck is on the line in a private operation. Mummy and daddy aint coming to help your sorry ass out of your misery, hence your mind set is different. Vision is different. It is all success and goal orientated. Every second is about profit vs. loss. This mentality thought isn’t present in as far as operations at TGM are concern.
The government would benefit from cash flow from the initial sale, plus all the other flown on effects, like a full tax-paying work force and an operation not bleeding the government for money every month. A private company would employ more staff to finally develop the surrounding EL’s, and also build a road to serve its operations for the next decade.
The cancer is Petromin – who is full of self serving people. The removal or resignation of the former Petromin CEO had little bearing on the course they continued to sail – as the senior members under the former Petromin CEO are still there, but with new tittle on their business cards.
Remember, this is the same company that continued to operate for several years where 50% of all total mine costs went to a single, unchallenged aviation sub-contractor, who flew several blue and yellow B214’s helicopters instead of the much more efficient and cheaper Mil-8.
The same company who ignored worker pleas to remove the former ex-pat mine manager, and instead continued to employ him on the books as the TGM GM, although he was sleeping in Lamana for several months.
The list goes on and on. Ask of the workers with 10-15 years+ experience – the real workers who slaved away with blood sweat and tears. All those months away from their families – the long 12 hour days underground – the ones who have been at Tolukuma through all the various management and ownership changes. You know the ones I am talking about – the ones without a title or business card – not the Petromin proxy workers installed for intelligence and propaganda / control purposes.
I look forward to the day when I will be able to write a positive news story about TGM – but how can this day occur when such behavior and politics continue? The news is always bad when people believe they are above the law, and the few positive articles over the last few years now seem to be very well fabricated pieces of propaganda.
You cannot have it both ways – when Petromin want to ‘play the government’ card, they act like they are the law. When they want to play the ‘private company card’ they reap the benefits of the corporate world also.
Epi Koga is already recognized by his people – he now needs to recognized by the government and be at the table for any matters relating to the future of Tolukuma. Not told about critical decisions later, not Epi reading about an outcome in the newspaper…. But a key part of negotiations about the future of his people. The future cannot involve Petromin. They have no credibility, dignity, or respect of the Goilia community or workforce, and they have themselves to blame – not the mine, not the workers they laid off, not the remoteness of Tolukuma – but there greed, their ego, and their arrogance, and there incompetence