PNG Ok Tedi facing precarious future

3:43 pm on 27 July 2015

The long term future of the Ok Tedi mine in Papua New Guinea's Western Province is in doubt with drastic cutbacks on staff and a production shut down.

Staff staying on have been directed to work on maintenance.

The company has declared a force majeure event, saying the current dry conditions mean it cannot meet its obligations.

Ok Tedi Mining says the dry conditions, which are likely to continue into next year, mean it cannot ship its copper concentrate.

Ok Tedi mine, Papua New Guinea

Ok Tedi mine, Papua New Guinea Photo: Dev Policy

The company is also concerned at the impact of the low prices for copper and gold.

It is reducing expatriate staff by 30 percent and local staff by 15 percent, and is reviewing employment conditions for those that stay. Most contractors and labourers have been told there is no work in the near future.

It says the stood down workers and their families have to move out of the company housing that they are occupying.

The company is also closing the Government and the Tabubil International Schools.

The chief executive, Peter Graham, says in a statement, he realises many people will be shocked by this drastic action but he says it is necessary to ensure the long term viability of the company.

Peter Graham

Peter Graham Photo: RNZ / Johnny Blades