Contrary to recent claims, Ok Tedi Mining Limited (“OTML”)
has not amassed K800 million in corporate debt.
The Minster for State Enterprises, Hon. William Duma, CMG,
MP said this in response to a statement by the Member for
Ialibu-Pangia and Peoples National Congress (PNC) Party
Leader, Hon. Peter O’Neill, MP alleging that OTML had
incurred the massive debt to support the Government as a
milking ‘milking cow’ for Prime Minister, Hon. James Marape,
MP.
Minister Duma said the claims by Hon. Peter O’Neill, MP were
not based on facts but based on assumptions which only
serve to discredit the good work OTML is doing.
The Minister said OTML utilizes a structured financing facility
up to K582 million, to specifically fund long-term capital assets
such as the Processing Asset Renewal,
which includes replacing aging milling infrastructure and the
Kiunga dewatering and ship loading facilities, as well as
Power Generation. This initiative underscores OTML’s
commitment to reinvigorating processes to achieve
operational efficiency, which in turn enables extending the
mine life of its operations.
“Decisions on significant investment in upgrading
infrastructure is based on the mine life. OTML will continue to
invest into infrastructure development which support its
extended mine life, using a combination of debt and free cash
flow as a prudent measure of both managing its balance sheet
and expediting investment to
secure the mine,” said the Minister.
He added: “The financing facility is structured as a standard
corporate loan, attracting competitive commercial interest
rates with principal and interest repayment terms.”
In addition to the structured financing facility, OTML maintains
an available working capital overdraft facility of K200 million
which is drawn as and when required, to manage its cash flow
and mitigate any risks in its revenue stream.
“OTML’s operation in a difficult geographic location with
complex logistical challenge placing the company in a
susceptible position under extreme climatic conditions.
The overdraft facility is used tO manage the cash flow under
such situation to sustain operations,'” said Minister Duma.
Additionally, the Minister refuted the claim that OTML was
being used by the Government of the day to address the fuel
shortage issues in the country. The decision to set up a
separate fuel supply chain is independent of any
Government’s influence to manage operational risks
associated with the fuel supply disruption caused by Puma
Energy.
“Due to the fuel shortage issue, OTML initiated purchasing its
own fuel to mitigate the impacts of flight cancellations on its
Fly-In-Fly-Out workforce that were using commercial airlines
to go to destinations not serviced by OTML Charter planes.”
“Since Puma were so belligerent, this forced our SOE’s to look
at alternatives and to work together for the betterment of PNG.
This is a positive initiative which OTML should be commended
for rather than be ridiculed for political convenience.”
“And OTML has the foreign exchange capacity to be a conduit
to assist for Jet A1 on Prepaid commercial arrangements,
which is a bonus for PNG. There is no burden
on OTML,” said Minister Duma.
Meanwhile OTML Board Chairman, Jeffrey Innes, said the
Company operates independently and applies a high standard
of governance.
“The OTML Board considers the appropriate mix of debt and
cash when making decisions on future investment into the
operations, and adheres to stringent regulatory guidelines in
determining dividends, which are based on available profits
and free cash flows. These dividends play a crucial role in
supporting the country’s economy, funding initiatives in
education, healthcare, road networks, electrification. The
company remains committed to contributing meaningfully to
national development through these dividends,” said Mr Innes.
The OTML Managing Director and Chief Executive Officer, Mr.
Kedi llimbit, said the Company anticipates a robust
performance in 2024, buoyed by an increase in global
commodity prices observed this calendar year. The company
expects significant revenue growth due to substantial
improvements in production in the first half of
this year, assuming current price levels are sustained.
“Looking ahead, we remain focused on maximizing
operational efficiencies and capitalizing on the current
commodity prices. Our strategic investments and prudent
financial management will continue to drive sustainable
growth and value creation for our stakeholders,” said Mr
Ilimbit.
Minister Duma said that based upon reports provided to him,
OTML is forecasting to generate US$1.4 billion in revenue for
- This reflects the efforts of restoring, resetting and
reinvigorating the business during the last 16 months since
the major changes at both the Board and management levels
of OTML.
Minister Duma reiterated that the Marape Government led by
Prime Minister James Marape has no say and does not have
any great control or influence over OTML as OTML is owned
by the affected landowners, the Fly River Provincial
Government, and Kumul Minerals Holdings Ltd, and decisions
made by the Board and management of OTML are based
purely upon commercial considerations and in the
interests only of the Shareholders.
