Ok Tedi Mining

The Ok Tedi mine is a major producer of copper concentrate for the world smelting market. Situated in the remote Star Mountains of PNG’s Western Province, it extracts and exports copper, gold and silver concentrate to customers throughout Europe and the Asia-Pacific region. Ok Tedi Mining Limited (OTML) operates the mine, which has had a major impact on one of the world’s most remote places.

The Ok Tedi mine started operations in 1984, and has become the single largest business contributor to the economies of both the Western Province and PNG. In 2007, OTML's export earnings were K4.6 billion, which represents approximately 32 per cent of PNG's total export earnings. The contributions of the mine to Western Province are not simply economic, however. Employment, education and trainng, infrastructure such as roads, airstrips, water and communications systems and health services have been established, facilitated by the mine.

In January 2002 BHP Billiton Ltd divested its 52 per cent shareholding in OTML by transfer of its shares to the Papua New Guinea Sustainable Development Program Limited (PNGSDPL). The OTML dividends paid to PNGSDPL are being used to generate sustainable development projects for the benefit of the people of the Western Province and Papua New Guinea.

OTML's shareholders are PNG Sustainable Development Progarm Limited, (52 per cent), Inmet Mining Ltd (18 per cent) and the PNG Government (30 per cent). The PNG Government holds equity directly (15 per cent) and on behalf of the Western Province (12.5 per cent) and landowners from the mine area (2.5 per cent).

The greatest challenge facing OTML is the management and mitigation of damage caused to the environment by the mining operations. The mine has had a major impact on the riverine ecosystems downstream, affecting the lives of the traditional subsistence inhabitants of local communities, and substantially altering the appearance and condition of the Ok Tedi and Fly Rivers. Environmental monitoring of and research into the Ok Tedi and Fly River systems has continued to be a significant focus at OTML in response to the well-documented impact of the mine on its environment. This research is set to continue beyond mine closure, which is forecast to occur in 2013.

OTML's headquarters are in the town of Tabubil. The mine site is located on Mount Fubilan, 18 kilometres from the PNG/Indonesian border. OTML also operates milling facilities at the mine site and shipping facilities at the port of Kiunga on the Fly River, 750 kilometres upstream from the Gulf of Papua.

OTML directly employs about 2,000 people. 95 per cent of these people are PNG nationals and 36 per cent are from the Western Province. In addition, businesses that work under contract to OTML employ approximately 1,500 people.

As well as the significant wealth that the mine has generated for the Western Province and PNG generally, OTML - through its economic activity, employment and infrastructure development, in particular - has created significant dependencies. In preparing for mine closure, OTML is working with Western Province communities and governments to plan for life after the mine..