|Friday, 9 December 2011|
BEYOND the boundaries of Barrick’s giant Porgera gold mine in Papua New Guinea, Mike Butler finds a new breed riding the resources boom.
Porgera gold mining town is as wild as it gets.
With public disorder and lawlessness the norm, it’s easy to see why the closest ex-pat workers want to get to it is through the steel mesh windscreens of the buses taking them through it to the mine each day.
But underneath the shambolic face of Porgera, local people are also benefiting from record gold prices.
MiningNews.net went into the legendary chaos of Porgera town to find three locals who are riding the resources boom in their own ways to help shape one of the wildest gold mining towns on Earth.
The company founder
When Jolson Kutato was a boy, he wore a grass skirt and his father used a stone axe.
Today, the 52-year-old is the head of one of the largest PNG-owned corporations, Ipili Porgera Investments.
With 14 subsidiary companies in logistics, mine catering, transport and property, as well as investments across PNG and in Australia, IPI is, in many ways, the unspoken success story of Porgera gold mine.
Created 20 years ago by villagers living around the mine, IPI is still 100%-owned by the original 2600 Porgeran shareholders who have seen the company grow into the most successful landowner-owned company in the country.
Last year it turned over more than $A60 million, had an asset base of around $36 million and was the country’s largest landowner-owned company by a country mile.
“The key to our success is transparency, trust and provision of good service,” Kutato says.
“We pay dividends and hold elections every year, as well as operate to corporate best practice.”
Kutato was one of a handful of men who initiated the share float to take advantage of the services the mine needed.
“The mine has caused a lot of problems but it has also created enormous opportunities for Porgerans and the growth of IPI is part of that,” he says.
When MNN visited IPI’s haulage arm IPI Mountain Transport, it had just signed a contract to haul 25 million litres of fuel for PNG’s new $10 billion ExxonMobil LNG project.
It is part of the company’s strategy for growth outside of the valley.
“It has to be,” Kutato says.
“The mine won’t be operating forever so it’s responsible for us to both diversify and create an asset that our shareholders will have after the mine has closed.”
Kutato’s leadership of the company has led him to become wealthy.
He owns more than 20 houses in the valley, along with a mind-boggling retinue of 16 wives (the traditional culture of the region is polygamous).
Three months prior, he had 32 – by far the most wives of any man in the valley – but he then divorced half in a mass rationalisation of his marital status.
While heading a highly successful company has its challenges, it was nothing compared to his labours outside of work.
“Wives? They were too difficult to manage,” he says.
“Things are much easier now.”
The political leader
As leader of the group paid millions each year to represent the 10,000 landowners affected by the mine, Mark Ekepa is one of the most influential men in the valley.
Ekepa’s world changed the day he shot his father in the head in a public argument over a mining compensation payment in 1996 and soon after he took control of the Porgera Land Owners Association.
The killing is never spoken about but has become part of the aura of the enigmatic man many simply call “the chairman”.
As he drives through the refugee camp-like communities clinging to the hillsides the mine is slowly consuming, many laud Ekepa as a hero.
“This is a David and Goliath struggle,” he says.
“We don’t want to close the mine but we do want all these people relocated.”
He has been particularly effective at embarrassing Barrick on the world stage.
Since 2007, he has made an annual pilgrimage to the company’s annual general meeting in Toronto, Canada, to protest Porgera’s environmental and human degradation.
In 2010, during a visit to the United Nations, he met the creator of Hollywood blockbuster Avatar, James Cameron.
The director told him the movie was based on “the struggles of people like yours”.
But while Ekepa has become a voice to a wider world, many closer to him harbour deep distrust, thanks to the financial secrecy of his organisation.
Despite receiving more than $2 million in royalties from the mine in 2010, the PLOA refuses to publish accounts to explain where the money goes.
The lack of transparency has fuelled suspicions Ekepa is lining his own pockets with the money meant to help his people.
On top of that, the transparency question allows Barrick a reason to refuse to negotiate with Ekepa’s association and cut individual deals with landowners.
As part the web of payments and agreements with the local people when the mine opened, the PLOA is bankrolled as a direct proportion of royalties from the mine.
In 2010, the PLOA received 4.2 million kina, around $A2 million.
Gold’s record rise over 2011 indicate this year’s payment will be substantially more.
However, when MNN visited, the PLOA was crying poor – a public notice freshly signed by the chairman had been posted, which declared applications for financial assistance would be rejected because of “a lack of funds”.
Over his time as chairman, Ekepa has accumulated property and business interests, as well as a reputation for buying new cars.
No doubt he has become a wealthy man.
Just how rich and at who’s expense, nobody quite knows.
The cowboy miner
Son Wabe is 29 years old.
He can’t read or write but on a good day he can earn what a local mine worker will earn in six months.
He is one of hundreds of illegal miners who enter Porgera’s tunnels and open pit to get at the gold.
While thousands of other villagers work over the mine’s tailings or pan for gold from its processing effluent, the big money is getting into Porgera’s main operations.
“On my best day I got 38,000 kina [around $A19,000] but on average it’s much less, more like 10 to 20 grams,” he says from the back of one of the 20 armoured shipping containers the town’s gold buyers operate out of.
While many enter the pit, Wabe specialises in working the mine’s tunnel network.
Equipped with chisels, hammers, bolt cutters and hacksaws, he and a team of eight will spend up to a week dodging security through the rabbit warren of main and branch tunnels.
“They try their best to chase us out but we know the layout of the mine well,” he says.
It’s dangerous work.
On a bad day, he’ll get caught, arrested and fined K2000 ($A1000).
On a very bad day, he won’t make it out alive.
“I’ve seen one of my teammates get killed,” he says.
“Security chased both of us and he fell off a cliff.
“I’ve been shot at and hit by rubber bullets.
“Yes, you do feel pain. It makes you run faster.”
For the mine’s managers, it presents a massive security and operational problem.
A couple of years ago, a tamper-proof high-security razor wire fence was built around the mine’s 20km perimeter in an attempt to stop people like Wabe.
It didn’t. Instead they burrow underneath its concrete base.
Once out, Wabe sells the gold and is drowning in cash.
With each gold buyer collecting an average of 200-300 grams of gold a day, the artisanal miners represent a massive cash injection into the town – between $A150,000 and $230,000 every day, based on current prices.
It also fuels the violence, drunkenness and chaos typical of gold rush towns.
Wabe feasts with his wife, three children and extended family, then goes drinking for days, sometimes weeks, at a time until the money runs out.
“The gold prices mean I’m getting paid much more than I did a year [ago] but I don’t save any of it,” he says.
“I know it’s illegal to enter the pit but I can’t leave it – I have already tasted the big amounts.
“I will now do it until I die or at least until I get too hurt to do it.
“I’m addicted. It’s in the blood.”
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