– Promised to bring full strength of legal team to challenge cancellation of lease
BOX : China’s Ministry of Foreign Affairs says legitimate interests of Chinese firms have to be effectively protected.

About three months ago, the government of Papua New Guinea (PNG) refused to renew a 20-year mining lease for Zijin Mining Group, one of China’s largest state owned companies. Zijin is part of a joint venture with a local company, Barrick Niugini Limited (BNL) to operate coveted Porgera Mine which is an open pit and underground gold mine located in the Enga province of PNG. It is the second largest mine in Papua New Guinea and is regarded as one of the world’s top ten producing gold mines.

The Porgera Mine

Irrespective of the mine’s contribution to the national purse, Marape has made it clear that he places a higher value on his people as well as the protection of his country’s environment, hence his decision to cancel the 20 year-lease on the basis of environmental damage and the social unrest the operations caused. Many villagers protested the operations, stating that it has polluted the water and created other environmental and social problems, with minimal economic benefits for locals.

As for Zijin Mining Group and its partner, BNL, the duo is infuriated by the government’s decision. In the case of Zijin, it wrote the Prime Minister and made it pellucid that his actions put at risk, the relations Papua New Guinea enjoys with China which remains its largest creditor.

International news agency, Reuters had published an extract of the letter that was written to Marape by Chairman of Zijin’s Board, Chen Jinghe. The letter said, “As a Chinese enterprise, Zijin would like to contribute to the existing good economic, trade, cultural and inter-governmental relations between China and PNG. However, if Zijin’s investment in Porgera mine is not properly protected by the PNG government, I am afraid there will be significant negative impact on the bilateral relations between China and PNG.”

Prime Minister of Papua New Guinea, James Marape

China’s Ministry of Foreign Affairs also said in a statement seen by Reuters that the legitimate interests of Chinese firms have to be effectively protected. Should the government of Papua New Guinea fail to return the license to Zijin and its partner, both companies pledged to bring the full strength of their legal team to challenge the decision. BNL in particular, has also committed to going after any financial loss suffered during this time.

Kaieteur News would have reported on Sunday last that Zijin had purchased the cash-strapped Guyana Goldfields for a whopping C$323M and would soon be working on the Canadian firm’s Aurora Goldmine. The purchase would be integral to Zijin’s portfolio after losing the Papua New Guinea license.

Dongxing Securities Co., Ltd., a Chinese investment bank and brokerage firm had said that without the Porgera mine, Zijin’s 2020 gold production is expected to decline by 37 tons, or 9.3%. (https://www.caixinglobal.com/2...-mine-101548312.html).

Chairman of Zijin’s Board of Directors, Chen Jinghe

Following extensive research, Kaieteur News found and published in a Sunday news item that the Chinese stat- owned company that will be developing the Guyana Goldfields’ Aurora Mine, has a horrifying environmental track record.

Numerous international reports note that on July 3 and July 16, 2010, acid waste had escaped the company’s copper plant in China’s Fujian province and contaminated the Ting River. The accident was said to be the size of the BP deep-water oil spill, one of the largest in the history of the petroleum industry. The copper plant manager, deputy manager and head of environment were detained and subsequently sent to jail because the company waited nine days before revealing the incident.

In 2011, a court in the southeastern Fujian province ordered the Zijin Mining Group to pay a criminal fine of USD $4.6 million for the 2.4 million gallon toxic spill that contaminated the local river and poisoned 2,000 metric tons of fish, enough to feed 72,000 residents for a year. As a result of the spill, 210,000 residents of the area were without potable water and there were notable increases in cancer cases. (https://steelguru.com/steel/zi...t-copper-mine/203663)

In 2010, Reuters had published that a dam at a tin mine run by a Zijin subsidiary collapsed during heavy rains, burying a nearby village in the Guangdong province. The landslide of waste from the mine left 28 people dead or missing.

Reuters noted that Zijin had run into trouble with collapsed dams before. Late in 2006, a tailings dam breach at Zijin’s Shuiyindong mine in Guizhou province dumped cyanide-laced residue into a stream, and forced the mine to close for months.

Kaieteur News also found that a mining boom, thanks to the Chinese economy’s insatiable demand for metals, left the countryside studded with unsafe tailings dams that liquefy under pounding rains. In the worst such accident, 276 people were killed when a tailings dam at an iron mine gave way in Shanxi Province in September, 2008. A similar collapse the previous month in the same province killed 43 people, but was covered up ahead of the 2008 Olympic Games in Beijing.