FIFTY-four million kina in compensation and relocation benefits will be paid by Lihir Gold Mining Limited (LGL) directly to parties to the Compensation & Relocation Agreement (CRA) of the Lihir Mining Project every year beginning next year.

This was revealed during the final week of the Compensation and Relocation Agreement (CRA) meeting last week on Lihir Island.

The figure is projected to amount to K2 billion in the next 20 years with five percent increases on base amounts every year, to cover for Consumer Price Index (CIP) movements.

The parties to the agreements are the eight tenements landowner groups, five relocated villages, Nimamar Local Level Government and Lihir Catholic and United Churches. The eight tenement landowner groups and the five relocated villages are:

  1. Putput plant site
2. Kapit pit and stockpile
3. Landolam pit
4. Kunaye Airpot
5. Londolovit Weir
6. Londolovit Quarry
7. Lakunbut Dam
8. Lakunbut relocation family group
9. Kapit relocation family group
10. Mining Easement
11. Putput relocation family group
12. Landolam Relocation family group
13. Londolovit Weri relocation family group

All 13 groups and the two churches have agreed in principle with LGL, to the negotiated benefits packages under the CRA process except for the Nimamar LLG, who still needs to sort out outstanding issues with the company.

As a start for 2020, each of the groups will receive base amounts of money ranging from K300,000 to K6 million. The funds will be paid in three different components for each group which are development 60%, investment 30% and cash 10%.

Several landowner leaders when asked about how they plan to use these funds, said that they had to discuss and plan properly with their people on specific projects. However, they said in terms of investment, they would invest in high impact investments that would yield good returns for their people.

Martin Simol who is the leader for Putput plant site and Landolam pit landowner group, said it was up to individual landowner groups to plan on how to use their money. However, he said investment for their children’s future was important aspect of his plans.

The CRA is an agreement on compensation benefits package between LGL and the different landowner groups. It used to be known as the ‘Integrated Benefits Packages’ (IBP).
Under the revised CRA arrangement, compensation will be paid by LGL directly to landowners for the use of resources such as water and land.

For the last 20 years payments used to be made through the Lihir Mine Area Landowner Association (LMALA), with anticipation that these funds would eventually be distributed to the individual landowner groups which was not the case.

In 2017, a review of the IBP compensation payment arrangements was conducted. Based on the findings of the review and in compliance with the Mining Act 1992, (which requires that mining companies pay compensation benefits directly to landowners) tenement holders demanded that benefits be paid directly to them instead of have the payments done through LMALA. This gave birth to the CRA process.