SINGAPORE, June 24 (Reuters) - Barrick Gold Corp will lay off most staff at its Porgera gold mine in Papua New Guinea, the mine’s operator said on Wednesday, a signal that an impasse with the government over ownership is unlikely to be resolved swiftly.
Canada’s Barrick, the world’s second-biggest gold miner, was refused an extension of its expired lease on the mine in April, with the government citing unrest and pollution concerns.
It stopped production and put the mine in care and maintenance mode while challenging the lease decision in court, but on Wednesday flagged further job cuts and said 2,650 Papua New Guinea nationals would be retrenched by the end of July.
“The government had repeatedly refused to enter into meaningful discussions about the issue,” Barrick Niugini Ltd, which operates the mine as a joint venture between Barrick and China’s Zijin Mining Group Ltd, said in a statement.
“The fact that the mine is not operating and therefore not producing revenue had created a financially untenable situation.”
It said staff it had kept on in the hope of resolving the dispute would be cut at a cost of $52 million.
Barrick Chief Executive Mark Bristow said only essential personnel required for care and maintenance would remain. In January, he had told Reuters the mine had potential to be a top-tier asset.
A spokesman for PNG Prime Minister James Marape had no immediate response on Wednesday. He has previously said the government intends to operate the mine itself.
Barrick Niugini’s challenge to the lease extension is due in court on July 6.
Reporting by Tom Westbrook; Editing by Clarence Fernandez