Harmony says Hidden Valley output unaffected by PNG violence

TOPSHOT - People run with merchandise as crowds leave shops with looted goods amid a state of unrest in Port Moresby on January 10, 2024. A festering pay dispute involving Papua New Guinea's security forces on January 10 sparked angry protests in the capital, where a crowd torched a police car outside the prime minister's office. By Wednesday afternoon pockets of unrest had spread through the capital Port Moresby, with video clips on social media showing crowds looting shops and stretched police scrambling to restore order. (Photo by Andrew KUTAN / AFP) (Photo by ANDREW KUTAN/AFP via Getty Images)

HARMONY Gold said production from its Hidden Valley mine in Papua New Guinea was unaffected by violence that erupted on the Pacific island nation this week.

The country’s prime minister James Marape declared a state of emergency on Thursday and suspended government and police officials after 16 people were killed during rioting, according to a report by Reuters.

A police and public sector protest on Wednesday over a pay cut that officials blamed on an administrative glitch descended into lawlessness, the newswire said.

Television footage showed thousands of people in the streets of the capital Port Moresby, many of them carrying what appeared to be looted merchandise as black smoke billowed over the city.

“The Harmony operations in Papua New Guinea have not been affected by these activities in any way,” said Harmony CEO Peter Steenkamp in an e-mailed response to questions. “We welcome the state of emergency that has been declared and the additional security that has been introduced to restore order,” he said.

Nine people were killed in the rioting in Port Moresby and seven were killed in Lae, in the north of the gold and copper-mining country, Australian state broadcaster ABC reported on Thursday, citing police.

Wafi-Golpu project

Harmony has long-term aspirations in Papua New Guinea as a joint venture partner in the Wafi Golpu copper/gold project. There are hopes a special mining lease (SML) can be signed this year after a memorandum was agreed with the government and then partner Newcrest (now Newmont) in April.

The events this week “is not expected to have any negative impact on the Wafi-Golpu permitting negotiations,” said Steenkamp.

Once the SML is in place, Harmony can take Wafi Golpu to its board and then to shareholders. Before that, Harmony will update its 2018 feasibility study in which it estimated total project capital of $5.38bn, down $1bn from a study in 2016.

In 2020, a Papua New Guinea court dismissed a stay order lodged by the then governor of Morobe province, where Wafi Golpu would be built, who claimed he should have been consulted on the MoU. After that, Wafi Golpu was sidelined amid political unrest in Papua New Guinea which included a period in which Marape was re-elected prime minister.

Marape’s campaign for re-election proved fraught and violent as he fought off predecessor and former party leader Peter O’Neill’s attempts to seize back power.

Tensions high

Marape said this week he had suspended Papua New Guinea’s chief of police and top bureaucrats in the finance and treasury departments while the government conducts a review into the cause of the riots.

“There was evidence of organised rioting that took place,” he told reporters, adding that the review would ensure “we secure democracy, we secure rule of law.”

Some 1,000 military personnel were on standby to ward off further unrest, he said.

The United States embassy in Port Moresby said police had returned to work, but that tensions remained high.

“The relative calm can change at a moment’s notice,” it said in a statement, adding it had received reports of violence in several other areas of the country.