Plans to move Newcrest out looms

Provincial assembly and landowners at helm

Ian D. Hetri

Sir Julius Chan

Sir Julius Chan. Photo by Raksy Heron

A planned radical stance backed by Governor of New Ireland Province, Sir Julius Chan and members of his provincial assembly, the chiefs and the local landowners to move Newcrest out of New Ireland Province is imminent.

“We are sick of the deceit, arrogance and incompetence you Newcrest have demonstrated since you took over Lihir” Sir Julius said.

Sir Julius said that his provincial government and the local land owners are taking necessary steps with relevant authorities to move Newcrest out of New Ireland Province.

Sir Julius stated the reason behind the move as being Newcrest not keeping its word to fund the Tax Credit Scheme (TCS) to implement developmental projects In New Ireland Province.

“In 2011 Newcrest told us they would provide K157 million over five years for the TCS.

Then earlier this year they told us there would be severe cuts in the TCS. We have waited for 18 years for the TCS to come onstream” Sir Julius said.

It is understood that Newcrest is not meeting its commitment to the province and the Governor and people of New Ireland are not happy.

Newcrest is believed to have asserted that The Bottom has Fallen out of the Price of Gold referring to the fall in prices of minerals in world market over the last few months.

Newcrest bought Lihir Gold in August 2010 at $US1200 per ounce. The price global gold price rose to $1400 per ounce in 2011 with Newcrest seeing a profit of $908 million. Then in 2012, the global gold price rose to $US1800 per ounce with the company making a profit of $A1.117 billion.

Between 2011 and 2013, Newcrest has seen a massive windfall. World gold price has since plummeted to $US1250 per ounce. Just $US250 above the purchase price in 2010 when Newcrest bought Lihir Gold.

Sir Julius also asserted that Newcrest is laying of hundreds of people to cut its workforce, particularly the expensive which are the expatriates.

“Newcrest does not need them anyway,, and this is a good opportunity to shed them” Sir Julius said.

Sir Julius also asserted that Newcrest has no money to keep to obligation to New Ireland. 

 

“They appear to have sufficient money to pay their executives not only large salaries but also outrageous bonuses, even in bad years. In 201o the top three executives in the company which Sir Julius named as Stephan Creese, Collin Moorhead and Deborah Sterling received $A75, 000 bonuses each in 2011. Then in 2012, even gold prices began to drop, they each got $A100, 000. And just two months ago, after Newcrest said the bottom has fallen out of the gold price, they each received the bonus of A$125, 000.

It is not only w are sceptical. The Australian Shareholders Association has said that it thinks this constitutes questionable practise” Sir Julius said. Sir Julius added that the industry can’t afford to pay 10% royalty.

“Our royalty rates are lowest in the world. African counties have raised their royalty rates to between 4% and 12% in the last few years. Even now, with gold trending down, Kenya just doubles the royalties to 5%. In the rest of the world, gold, copper, oil and gas range as high as 20%. We can do 5%. Newcrest can do it. They are here for the long term or we do not want them” Sir Julius concluded.