OK Tedi Mining Limited has been dogged by misadventure. No one foresaw the hazards of building a mine so inaccessible, cursed by such a wretched climate, with an annual rainfall of eight to nine metres. Construct engineers Bechtel Morrison and Knudsen were appointed project managers. Some of their specialist personnel were posted in from Saudi Arabia. One Ok Tedi site manager recalled ruefully: “Both countries are above sea level. That’s all they have in common.”
Some ground surveys were conducted inexcusably, by helicopter. Staff turnover was 150% per year. Construction costs went far over budget. The Fly River, up which all fuel, equipment and supplies were brought to within 240 kilometres of the mine site, dried up in an unprecedented drought. A costly airlift was mounted. The valley chosen for disposal of tailings disappeared in a landslide, and a bulk cargo of cyanide for gold extraction was lost overboard in the mouth of the Fly River delta.
Falling world prices and other difficulties have since lowered everyone’s expectations. Seven supplementary agreements have been added to the original. What the government believed would be another Panguna may now never pay its way. The government cannot readily sell its equity, not only because the project is marginal, but because the consortium is not a publicly-listed company. This article is taken from Optima magazine published by the Anglo American and De Beers group of companies.
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