Barrick, Chinese firm to challenge PNG's 'purported grant' of mine lease

FILE PHOTO: Souvenir luggage tags are displayed at a Barrick Gold Corp at the Prospectors and Developers Association of Canada (PDAC) annual conference in Toronto, Ontario, Canada March 1, 2020. REUTERS/Chris Helgren

TORONTO (Reuters) - Barrick Gold and a Chinese partner on Friday said they would challenge Papua New Guinea’s apparent move to grant a 20-year lease for the Porgera gold mine to a state-backed firm, the latest escalation in their dispute with the country.

Barrick Niugini Ltd (BNL), the joint venture that operates Porgera, said in a statement that it would challenge the “purported grant” of the special mining lease by PNG Prime Minister James Marape to state-owned Kumul Minerals Holdings Ltd as “unlawful and invalid.”

Barrick stopped production at Porgera and sued PNG’s government after it refused to extend the mine’s lease in April because of community unrest and pollution concerns. A prolonged shutdown could jeopardize the mine’s future, Barrick Chief Executive Officer Mark Bristow has said.

In its release, BNL said it “will take steps to challenge the purported grant” on Aug. 25 of a 20-year mine lease to Kumul.

A Barrick spokeswoman declined comment on what those steps would entail.

The Canadian miner in July served a dispute notice to the PNG government and said it would seek international arbitration to resolve the impasse.

A spokesman for Marape did not confirm whether the lease was granted to Kumul in a text message exchange with Reuters on Friday.

The Prime Minister said in a statement earlier in the week that the government wants to reopen the mine, but that the lease had reverted to the state. He has previously said the government wished to operate the mine itself.

The Porgera joint venture is owned by Barrick and China’s Zijin Mining Group, each with 47.5%, with the remainder owned by local landowners and the Enga provincial government.

Reporting by Jeff Lewis; Additional reporting by Tom Westbrook in Singapore; Editing by Alex Richardson and Paul Simao