Key EventsOk Tedi has been operating for over 30 years.
Key events in the history of the Ok Tedi operation
A government patrol team made first contact with the Min people of the Star Mountains. A patrol leader noticed signs of copper mineralisation and collected samples for analysis.
Mt. Fubilan copper-gold deposit was discovered.
Geologists from Kennecott Copper Corporation issued a prospecting authority over the area. Within a year the company confirmed that a deposit existed at Mt. Fubilan.
A diamond-drilling program to define ore reserves was carried out, and the results were favourable. Kennecott and the PNG Government could not, however, reach agreement on how to develop a mining project.
A government patrol team conducted a census of the Star Mountains and recorded five small and isolated hamlets (before Finalbin split from Bultem) with a population of 694.
Kennecott withdrew from the project. The Ok Tedi Development Corporation (OTDC) was commissioned by the government to complete further investigations and confirm Kennecott’s findings.
An Australian company, the Broken Hill Proprietary Company Limited (BHP), entered into negotiations with the PNG government. In the same year, the government passed the Mining (Ok Tedi Agreement) Act, and an international consortium was formed to assess the feasibility of developing a gold and copper mining operation.
The Department of Minerals and Energy contracted a consultant anthropologist to record the resources, land tenure and ownership in the Ok Tedi project area.
A ten-volume feasibility study was prepared and presented to the PNG government.
February: The national government approved the consortium’s proposal for the project and exercised its option to take up a 20% shareholding. June: The Mining (Ok Tedi Supplemental Agreement) Act was passed. October: Work commenced on the Ningerum to Tabubil pioneer road.
27 February: Ok Tedi Mining Limited (OTML) was incorporated to develop and operate the Ok Tedi project. Principle Mining Act leases SML1 and LMP1, and Land Act leases Tabubil Township Portion 1, and Ok Menga Portion 3 were granted to OTML. April: Construction commenced and proved to be a major engineering undertaking given the remote location and the unstable terrain. The mine development project took almost eight years and cost US$1.4 billion.
A prolonged drought in mid – to late – 1982 delayed construction, but dry conditions aided the development of the road. The Kiunga to Tabubil Highway was completed in April. Two Hercules C130 aircraft freighted fuel and supplies from Madang, as shipping on the Fly River was not possible because of low water levels. A lease payment census recorded a population of 696 in the Mine villages and 379 in the Ningerum LMP catchment.
January: A massive landslide destroyed the foundations of the Ok Ma tailings dam during construction. Mine tailings could not be safely stored at the Ok Ma site. May: Gold production commenced, and tailings were deposited into an interim tailing storage (ITS) facility.
Copper production commenced. The Sixth Supplemental Agreement sanctioned riverine disposal of tailings and run-of-mine waste rock.
The government set the maximum sediment level that OTML could contribute to the river system. OTML were required to monitor sediment effects. August: Vancouver (Northern Dumps) landslide deposited massive amounts of material into Sulphide Creek, Ok Gilor and Ok Mabiong, before entering the Ok Tedi just above Bultem Village.
The first dividend was paid.
Payments in excess of Kina 4.3 million were made to communities for lost and damaged gardens along the Ok Tedi.
An ownership restructure was announced: BHP’s shareholding changed from 30% to 60%, the State retained 20%, and Inmet Mining Corporation held 20%.
Ten-year production milestone was achieved.
Restated Eighth Supplemental Agreement set up a general compensation scheme. First company tax was paid.
First general compensation payments were made. The ‘mine waste management project’ was established to investigate options for mitigating environmental impacts. A Heads of Agreement for special benefits were signed between OTML, the State and the lower Ok Tedi communities.
The government approved the proposed dredging trial in the lower Ok Tedi area. An El Niño drought forced a shutdown of the Mill in August. About 65% of staff were sent home on dry weather leave.
Operations resumed in March. Dredging trials commenced following rains and higher river levels. The State acquired an additional 10% shareholding to be held for the benefit of the people of the Western Province: 8% is contributed by BHP and 2% by Inmet. Payment by the State was to be effected from future dividends on the 10% acquired. The State agreed to hold 2.5% of its total equity (now 30%) for the benefit of the mine area landowners and 2.5% for the benefit of the people of the Western Province.
The results of the mine waste management project risk assessment were published in August. The State directed the dredging trial to continue.
The State engaged the World Bank to review the findings of the mine waste management project. BHP indicated to shareholders its intention to exit OTML. The State announced the community consultation process to decide the future of the mine given its environmental impacts.
The community consultation process resulted in consent being given for the mine to continue, and for Community Mine Continuation Agreements (CMCA) to be established with mine-affected landowners. The Mining (Ok Tedi Mine Continuation (Ninth Supplemental) Agreement) Act 2001 was passed by the PNG Parliament. It set out the basis for mine continuation and BHP’s withdrawal. OTML’s Environmental Regime was adopted by the State as a part of the Ninth Supplemental Agreement.
BHP completed its withdrawal from OTML with its equity transferred to PNGSDPL. The State approved the full-time employment of a dredge in the lower Ok Tedi in conjunction with social and environmental monitoring programs.
Twenty-year production milestone was achieved.
OTML environmental monitoring detected chemical impacts from increasing copper in the river system. OTML informed the State and affected communities of the new environmental data and began investigating options for mitigating predicted ARD.
OTML celebrated 25 years of the Ok Tedi project. The State approved the Mine Waste Tailings Project (MWTP), whereby sulphur in tailings would be significantly reduced, and the resultant pyrite concentrate (PCon) would be safely stored at Bige.
A CMCA review produces a revised agreement between OTML and 145 villages and extends the mine life to 2013.
The mine waste management program, including the tailings pyrite plant (TPP) and the pyrite concentrate pipeline, goes online.
February: A census of the mine area recorded a total population of 23,071 with 7,721 in Tabubil, 4,785 in the Mine villages and 10,565 in various settlements. The State approves OTML’s purchase of Inmet’s equity in OTML for consideration of a net smelter return and a cash payment.
OTML buys out the shares of Inmet Mining Corporation.
A Tenth Supplemental Agreement was passed by Government that gave effect to 100% State ownership of OTML. A significant organisational restructure was completed, with all employees made redundant and their entitlements paid out. Employees were rehired under a new staffing structure. Mine Closure was extended to mid – 2025 after a Mine Continuation Feasibility Study was approved by the State.
August: El Nino event caused a temporary suspension of mining operations.
March: Mining resumed after the El Nino weather event.
July: 33% equity in OTML was transferred to the CMCA Communities, Mine Villages and the Fly River Provincial Government.