The PNG SDP and the PNG government are fighting over control of a trust which uses money from the Ok Tedi mine to fund development projects (Credit: Audience submitted)

Source: PNG Mine Watch

Lawyers for Papua New Guinea's government have admitted the prime minister released "factually inaccurate" information about a court case in Singapore.

The case is part of a bitter struggle for control of a $1.4 billion development fund linked to the Ok Tedi mine, as well as the mine itself.

Last week, a media release from prime minister Peter O'Neill claimed the PNG Sustainable Development Fund (PNG SDP) withdrew money inappropriately from its Long Term Fund, which is set aside for after the mine closes.

But PNG SDP chairman Sir Mekere Morauta said a letter submitted to Singapore's Supreme Court by the PNG government's lawyers admitted the statements were misleading.

Ok Tedi mine

• BHP first began mining for gold in 1984.
• One of the world's largest copper deposits later found at the site.
• In the 1990s landowners sued over environmental damage from mining waste.
• As part of the settlement BHP placed its share in the hands PNG Sustainable Development Project
• Two-thirds of the money earned from Ok Tedi is paid into fund for use after mine closes.
• Remaining third goes to development projects across Papua New Guinea.
• In September 2013, the PNG government took over PNG SDP's majority share, giving it 100 per cent control.
• Government and landowners moved to extend mine's life until at least 2015

"The State recognises that some of the points presented in the last three paragraphs of the news release as reported by the PNG press are factually inaccurate and will be issuing clarifications in this regards shortly," said lawyers for the PNG government, according to the PNG SDP.

The paragraphs cited by the lawyer's letter allege the PNG SDP withdrew $7 million from the Long Term Fund to finance "general expenses", including $3.8 million for legal representation.

The government has not issued a public clarification.

The allegations against PNG SDP have been discussed in Parliament by the prime minister and attorney-general.

Sir Mekere said the PNG SDP will take action against the government for breaching Singapore's court rules by misrepresenting the Supreme Court's judgement.

"Those [2013] accounts have been audited and were found to be in order," he said.

"They were issued unqualified by the auditors, the respected international firm PriceWaterhouseCoopers, and I am confident the 2014 accounts will be the same."

The case in Singapore's Supreme Court is a counter claim to the PNG SDP's legal action, which seeks to block the government's removal of board members and its chairman.

A separate action has been lodged with the International Centre for Settlement of Investment Disputes in Washington DC.