Barrick Gold Corp. (TSX: ABX) has suspended most operations at its Porgera mine in Papua New Guinea following the deaths of two employees during a violent outbreak in the surrounding region. The Toronto-based mining giant made the decision as local unrest, rooted in a tribal conflict, continues to destabilize the Enga province, where the mine is located.
The situation, which involves tribal warfare between rival clans, has reached a critical point, prompting both the government and the company to take extraordinary measures for the safety of their employees.
Barrick Gold announced that the Porgera mine would remain largely closed until Thursday, allowing the government time to restore law and order. In its statement, the company said the decision was driven by a commitment to protect its workforce, which includes over 3,300 local employees.
“Over the past 24 hours, a significant escalation in tribal fighting has impacted many of our local employees. Homes have been destroyed, family and friends injured or killed, and people have been unable to sleep while living in fear,” said James McTiernan, the mine’s general manager, in a statement.
The closure follows a violent clash near the mine that resulted in the deaths of two Barrick employees, part of a broader tribal conflict that has swept the Enga province. While the company did not provide details on the exact circumstances surrounding the deaths, it characterized the violence as stemming from a “tribal conflict,” part of a series of clashes that have destabilized the region for years.
Regional instability
According to multiple reports, the fighting involves members of the Sakar and Piande clans, two groups seeking control over local mining access, including illegal operations around the Porgera mine. What began as a localized dispute has escalated into a full-blown conflict, with estimates suggesting that at least 20 people have been killed, with some sources claiming the death toll could be as high as 50.
“Put simply, if you raise a weapon in a public place or to threaten another person, you will be shot,” Papua New Guinea’s police commissioner David Manning said, confirming that illegal miners and settlers have been terrorizing communities surrounding the mine. The fighting, he added, is no longer a dispute over mining access alone but has become a serious threat to public safety.
On Sunday, more than 300 shots were reportedly fired during an intense standoff between the two tribes after peace talks failed. This level of violence has alarmed both local authorities and international observers, prompting a state of emergency declaration from the Porgera government and a bolstered police presence in the region. The Papua New Guinea government has called for “lethal force” to bring the conflict under control, a stark indication of the severity of the unrest.
The Porgera mine has been a flashpoint for conflict for many years, a situation complicated by its central role in the economy of Papua New Guinea. Located in a remote part of Enga province, about 600 kilometers from the capital city of Port Moresby, the mine has produced more than 20 million ounces of gold since operations began, contributing roughly 10% of the country’s total annual exports.
Despite its economic importance, the mine has faced a range of issues, including disputes over land ownership, environmental degradation, and disagreements about how the profits should be distributed. These tensions reached a boiling point in 2020 when Barrick suspended operations after a breakdown in negotiations with the Papua New Guinea government over the division of the mine’s economic benefits.
After nearly four years of halted production, Barrick and the government reached an agreement late last year, with Barrick agreeing to cede a larger share of the mine’s profits to local stakeholders. Under the new terms, Barrick holds a 49% stake in the joint venture, while Papua New Guinea stakeholders, including landowners and the government, hold 51%. This agreement allowed production to resume in 2023, but the fragile peace that accompanied the deal has been shattered by the recent violence.
The tribal violence has attracted attention not only for its impact on the Porgera mine but also for the broader humanitarian crisis it has created in the region. Mate Bagossy, the United Nations’ humanitarian adviser for Papua New Guinea, expressed deep concern over the escalating conflict, noting that the death toll from the fighting could be far higher than initial reports suggest. “At least 20 have been confirmed dead, but it is likely up to 50 people have lost their lives,” he said, based on information gathered from local authorities and community members.
The conflict has displaced hundreds of families, many of whom have lost their homes and livelihoods. In an area where poverty is widespread and opportunities are limited, the Porgera mine has historically been a source of economic stability for many local communities. However, the recent outbreak of violence has severely disrupted this fragile balance, leaving many people in a state of fear and uncertainty.
Barrick Gold last traded at $27.36 on the TSX.
Information for this story was found via The Globe And Mail, Mining.com, and the sources mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
