In the midst of Papua New Guinea’s state of emergency, there was a change at the top of Ok Tedi Mining Limited (OTML). Business Advantage PNG asks Musje Werror, OTML’s newly appointed Managing Director and CEO, about his vision for the future of PNG’s largest mine.
Business Advantage PNG: What are you most looking forward to in your new role?
Musje Werror (MW): It is an honour and privilege to be appointed to this very important role to head a company that has been contributing significantly to the development of Papua New Guinea.
I am humbled by this opportunity and I thank the Prime Minister, James Marape, as the Trustee Shareholder for Ok Tedi, our Chairman Sir Moi Avei and Directors of the OTML Board and the former Managing Director/CEO Peter Graham for having the confidence in me.
Ok Tedi has been a major contributor to the economy of PNG including providing foreign currency (USD) into the domestic market.
The company has also contributed significantly to the social development of our country when you consider the thousands of people that the mine continues to employ, the hundreds of young apprentices and graduates that we have trained, and the contribution we have made to health and education in Western Province. Ok Tedi is a success story and I am fully committed to continuing this great journey.
‘I want Ok Tedi to be the model PNG miner that all our stakeholders can be proud of.’
Undeniably, Ok Tedi has had an impact on the environment and the lifestyle of the communities associated with the mine. I want to focus on making sure the positives outweigh the negatives by maximising the benefits generated for our stakeholders to sustain the future of the Province. I want Ok Tedi to be the model PNG miner that all our stakeholders can be proud of.
BAPNG: What do you expect your main challenges and opportunities to be?
MW: Critical to us delivering increased production and cash generation from 2023 is the commissioning of the 800-million-kina Crusher Replacement Project (CRP) in September and the removal of the old crusher by the end of 2020 to allow mining to commence on the East Wall in 2021.
Any significant delay of the CRP will begin to erode value; hence we are ensuring that this project is completed on time. The other major project which has also already commenced is the removal of 20 million tonnes of debris from Centre Pit to be able to access that ore by mid-2022.
The mid-term challenge for the business is to identify opportunities to extend mine life beyond the currently forecast 2028. Our exploration program has identified potential underground prospects and we will be proving up these resources over the next two years. The time period however is closing fast as it will take a number of years to develop an underground mine if proven to be feasible.
I will ensure the company continues to maintain strong performance to deliver dividends to our shareholders – State of PNG (67 per cent), Mineral Resources Ok Tedi No.2 (12 per cent), Mineral Resources CMCA Holdings Ltd (12 per cent), and Mineral Resources Star Mountain Ltd (9 per cent).
BAPNG: From what you have observed, what are the prospects for more Papua New Guineans taking senior roles in PNG’s resources sector? Apart from your own appointment, how is Ok Tedi Mining leading the way?
MW: The prospects are great for more Papua New Guineans to occupy senior roles in the PNG resources sector.
PNG has had a long history of mining going back more than 100 years. We have some of the most highly skilled mining engineers, geologists and technical experts working in the country and abroad. I am proud that Ok Tedi has contributed to developing some of these professionals.
Currently at Ok Tedi, we have successful national managers in operations and support areas with over 50 per cent of our manager and executive positions filled by national employees.
My strategy for OTML is to have the remaining manager positions localised over the next few years. Overall, OTML already has a 96 per cent national workforce and filling all the manager positions by national employees will be an achievement not only for Ok Tedi but also for the country.
We will still require the international experience of expatriates who will provide support, guidance and training for our national managers.
BAPNG: Ok Tedi has recently welcomed new shareholders in the form of local landowner companies. What positive benefits do you expect will flow from this move?
MW: Let me commend the PNG Government for recognising the Western Province communities by providing 33 per cent free equity in OTML. This is unprecedented and has changed the relationship between the people of Western Province and Ok Tedi. They are no longer simply interested parties but are now shareholders receiving dividends through the three entities of Mineral Resources Ok Tedi No.2, Mineral Resources CMCA Holdings Ltd, and Mineral Resources Star Mountain Ltd.
‘There has been minimal impact on our markets and exports, and we don’t expect this to change in the coming months.’
Over the next eight years, the people of Western Province are going to receive an estimated K27 billion in total benefits from Ok Tedi.
We will continue to look at ways to maximise opportunities for the people through our social and economic programs and ensure the benefits are converted into tangible outcomes in health, education, infrastructure, human resource development and income generating activities with the implementation of the WestAgro Plan under the Ok Tedi Development Foundation.
BAPNG: How is COVID-19 affecting the market for OTML’s exports?
MW: Fortunately, there has been minimal impact on our markets and exports, and we don’t expect this to change in the coming months.
We enjoy long term relationships with our customers, and we value their continued support. In April and May, we recorded two of our best producing months and expect a similar result this month (June).
Achieving these results has been challenging given the disrupted travel arrangements and their impact on our workforce. I would like to recognise the Ok Tedi employees and our business partners for their dedication.
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