TORONTO — Owners of the Porgera gold mine in Papua New Guinea say they will lay off 2,650 local mine workers by the end of July as the result of a continuing dispute with the federal government.
Barrick Niugini Ltd., the joint venture mine owner and operator that is owned 47.5 per cent each by Canada's Barrick Gold Corp. and partner Zijin Mining Group of China, says the cost of the layoffs will be more than US$52 million.
It says most of the 116 expatriate employees have already been laid off.
Production was halted in April and the mine placed on care and maintenance after the government said it would not extend its special mining lease. Workers were temporarily kept on the payroll.
BNL says the government’s decision is the subject of an ongoing judicial review in the National Court of Papua New Guinea.
In May, Barrick Gold removed Porgera output from its overall 2020 production guidance, dropping it by about 200,000 ounces to between 4.6 and 5 million ounces.
Mark Bristow, CEO of Barrick Gold, says the government has refused to enter into "meaningful discussions" to resolve the situation despite the mine's financial difficulties because it's not producing revenue.
“We understand that the loss of employment will have a significant impact on workers, their families and the Porgera community, as well as on the economy of Enga Province and the nation," he said in a news release.
"We sympathize with them and we share their frustration at the situation the government has created. We will continue diligently to seek a resolution to this issue.”
Landowners and the Enga provincial government own about five per cent of the mine.
This report by The Canadian Press was first published June 24, 2020.
Companies in this story: (TSX:ABX)
The Canadian Press