Canadian gold major Barrick will reduce power to the communities around Porgera, which currently receive free electricity from the mine, citing necessary cost reductions as the mine has been placed on care and maintenance amid a dispute with the Papua New Guinea government.

With effect from July 17, electrical power to Porgera communities will only be supplied between 18:00 in the evening and 06:00 in the morning, operator Barrick (Niuguini) Limited (BNL) announced on Thursday.

“BNL recognises this is a significant inconvenience to all community members, but regrettably the company has no other option than to continue to reduce costs in light of the government decision not to extend the Porgera special mining lease (SML), which forced the suspension of operations, and the consequent loss of operating revenue for the company,” it said in a statement.

BNL would try to maintain 24/7 power supply for Paiam Hospital and said it was working with other essential service providers to support alternative power supplies for the Porgera UrbanClinic, Paiam police station and Paiam courthouse.

BNL, which operates the mine as a JV between Barrick and China’s Zijin Mining, cautioned that further reductions in power supply were anticipated in the coming months.

Relations between Barrick and government have deteriorated since the rejection of the SML application in April.

Last week, BNL initiated proceedings before the World Bank’s International Centre for Settlement of Investment Disputes over the lease application. The company argues that the government’s decision to reject the application extension was in breach of its right to renewal.

Barrick (PD) Australia has also given notice to Papua New Guinea that a dispute has arisen under the bilateral investment treaty between Papua New Guinea and Australia. Barrick PD, as an investor, will seek to recover damages it had suffered and damages it may suffer in the future by virtue of the country’s “wrongful refusal” to grant an extension of the SML.

On June 24, Barrick announced to 2 650 workers at Porgera that they would be retrenched before the end of this month.