PNG Ok Tedi facing precarious future

11:16 am on 28 July 2015

A Papua New Guinea commentator says the Government is facing a serious blow to its revenue with a shut down at the OK Tedi mine.

Ok Tedi mine, Papua New Guinea

Ok Tedi mine, Papua New Guinea Photo: Dev Policy

The long term future of the mine in Western Province is in doubt after major staff cuts and production stopped.

The state-owned company is blaming dry conditions and the slump in the prices of gold and copper.

Martyn Namorong says the effect of the closure is compounded by the hosting of the recent Pacific Games which cost the country more than 400 million US dollars.

"There are calls for a supplementary budget to be introduced and I think the shutting down of OK TEDI's operations will be a really big blow to the Papua New Guinea economy in relation to the procurement contracts that businesses get from dealing with Ok Tedi. But also in terms of funding of the national budget."

Mr Namorong says revenue from the Ok Tedi mine has been contributing about a quarter of the national budget.