In response to the Jet A1 fuel supply shortages by Puma, Ok Tedi Mining Limited (OTML) has proactively stepped in to manage the procurement and distribution of Jet A1 fuel. This move comes as part of its commitment to support the nation and OTML’s needs during these challenging times.
With Puma no longer able to consistently supply the necessary quantities of Jet A1 to keep the nation flying, OTML has established a robust supply chain to ensure that Jet A1 is delivered efficiently and without disruption.
OTML has constructed these supply agreements to operate on a cost-recovery basis. This means that we are not seeking profit from these transactions, but rather focusing on ensuring that the JetA1 fuel is available for use by our major airlines whom OTML remain reliant upon for the safe transportation of its FIFO workforce to their home ports and ultimately to ensure that production remains uninterrupted at its mine site.
Key aspects of these supply agreements include:
- Prepayments made in Kina: All Jet A1 payments are made by the contracted parties in advance in Kina before the fuel is loaded overseas. This measure ensures that there is no financial burden placed on OTML so that it can maintain a steady cash flow and mitigate risk. Whilst OTML makes its payments in currencies other than Kina, the Bank of Papua New Guinea has been informed and approved this arrangement ensuring compliance with national regulations.
- Minimum Order Quantities: To ensure stable supply, minimum order quantities have been established. This assists in managing logistics efficiently and guaranteeing that there is enough fuel to meet demand.
- Long-Term Agreement: A 24-month agreement has been put in place to amortize fixed costs over a longer period. This long-term commitment ensures continuity and stability in the fuel supply chain.
OTML remains dedicated to supporting the nation through this period of fuel scarcity. Our swift actions to secure and distribute Jet A1 reflect our commitment to national welfare and economic stability. We will continue to work closely with all stakeholders to ensure a reliable and steady fuel supply, supporting the nation’s infrastructure and economy.