ACHIEVING STANDARD ZERO in Papua New Guinea CASM

ACHIEVING STANDARD ZERO in Papua New Guinea CASM – Ulaanbaatar, Mongolia - 2007

Papua New Guinea

Mining Projects

Overview of Small Scale Mining Sector • • Estimated 50, 000 miners countrywide 4. 5 tonnes (145, 000 oz) gold produced each year Kina 180 million (US$ 60 million) Average income per miner is K 3600 (US$1080) PNG average income is K 994 (US$300) Mining improves income - reduces poverty Approx. 400, 000 benefit (PNG multiplier=8)

• PNG unique. It does not face many of the issues in many other countries • 97% of land is still owned by indigenous people. 3% by Government. • 75% population are rural • Small scale mining is well regulated as a consequence of the country’s mining history, development of its mining law and very strong customary ownership rights to land.

STANDARD ZERO • 5 COMPONENTS – Social Development – Economic Development – Labour Development – Environment Development – Trading

SOCIAL DEVELOPMENT • Fair Trade is well developed in the Coffee Industry (organic). Delivers exception value to growers • ASM is individual or family groups • Concept of Community Mining is unknown • Legislative frameworks exist for a producer organisation e. g. Association, Cooperative or company • Organisation Constitution defines the rules.

ECONOMIC DEVELOMENT Organisation must have professional management reporting to and directed by Board Capacity is generally weak – Training is required Various programs (JSDF) improving productivity and environmental performance

LABOUR DEVELOPMENT • PNG does not have slave or child labour • Mining is conducted as a family business • PNG has 850 different languages and almost as many different cultures. The treatment of women varies between tribal groups. • The views of women are increasing being heard

LABOUR DEVELOPMENT • ASM has high incident accidents and deaths • Training and awareness programs on OH& S • Formal Social Security do not exist • Cultural support systems looks after everyone in the Community

ENVIRONMENTAL • JSDF has developed a set of Environmental Guidelines for ASM • Techniques are being introduced to reduce the environmental impacts. Generally impact is small • Local cultural values restrict impacts

TRADING • Gold trading is essentially unregulated • Free market prevails – many gold buyers • Free to sell gold to who offers the best price • Central Banks generally set country rules • Changing the rules will be the greatest help for ASM

TRADING • Gold price is fixed in London AM and PM for London Good Delivery Bars • Local prices are discounted for refining costs and cost of delivery to London (Loco price) and then the % of contained gold • Premium (? ) or better price will only be achieved by collectively selling larger lots to refiners or jewelers

The Future • PNG is well advanced in achieving Standard Zero • The challenge is to have the miners recognize that a collective organisation will delivery additional benefits and better prices. • PNG is in the position to implement a pilot project to sort out these issues.

Faces of PNG