Science, governance and environmental impacts of mines in developing countries: lessons from Ok Tedi in Papua New Guinea

doi:10.1017/CBO9780511974304.030

27 - Science, governance and environmental impacts of mines in developing countries: lessons from Ok Tedi in Papua New Guinea

from III. 5 - Industrial and mining water use

Published online by Cambridge University Press: 05 August 2011

Ian C. Campbell

Edited by

R. Quentin Grafton and

Karen Hussey

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Ian C. Campbell: Affiliation:
Monash University
R. Quentin Grafton: Affiliation:
Australian National University, Canberra
Karen Hussey: Affiliation:
Australian National University, Canberra

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Summary

Introduction

The construction of the Ok Tedi mine in western Papua New Guinea (PNG) began in 1981, with the first production commencing in 1984. The mine is operated by Ok Tedi Mining Limited (OTML), a company jointly owned in the 1990s by the Australian mining company BHP, the PNG government, and Inmet Pty Ltd, a Canadian mining company. In 2002 BHP, which by then owned 52% of the shares, withdrew from OTML, passing its shareholding to PNG Sustainable Development Program Limited, a company established solely for the purpose of administering the 52% share in the company and using any returns to undertake development work in PNG, particularly within the Western Province. The remainder of the shares are held by the PNG government (30%) and Inmet (18%). However, in 2009 Inmet commenced negotiating with the PNGSDPL to exchange its 18% equity interest for a 5% net smelter return royalty (Inmet, 2010).

The mine has been a major contributor to the economy of PNG. In 2007 it achieved a record pre-tax profit of K2.7 billion (approximately US$1 billion) and contributed 32% of PNG's export earnings (OTML, 2009). It is also a major employer within the Western Province, and PNG as a whole, with a directly employed workforce of about 2000 people, of whom 95% are PNG nationals, and an additional 1500 or so people employed through contractors working for the mining operation.

Type: Chapter
Information: Water Resources Planning and Management , pp. 583 - 598

DOI: https://doi.org/10.1017/CBO9780511974304.030 [Opens in a new window]

Publisher: Cambridge University Press

Print publication year: 2011

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