Senator Margetts asked the Minister representing the Minister for Industry, Science and Tourism, upon notice, on 14 June 1996:

(1) (a) Was an agreement signed in London on 18 August 1995 by Lihir Gold Ltd and its financiers and insurers for a loan of $300 million; (b) was this loan syndicated by the Union Bank of Switzerland, ABN AMRO, Citibank, Dresdner Bank and the Government Authority AIDC Ltd; and (c) was the loan insured by EFIC, MIGA and the Canadian Agency EDC.

(2) As AIDC and EFIC were both party to this agreement on behalf of the Australian Government: (a) what are the terms of this agreement; (b) and can a copy of this agreement be provided.

(3) Can it be confirmed that one of the specific conditions is that the syndicated loan would only be disbursed after Lihir Gold Ltd has spent at least $400 million of its own funds on the project; (b) is it a fact that this expenditure was not due to occur until September/October 1996; and (c) can the Government guarantee that Lihir Gold Ltd has not spent any of the syndicated loan funds at this date.

(4) Is the Australian Government, EFIC or AIDC aware that United States (US) Government insurers Overseas Private Insurance Corporation (OPIC) refused to insure the Lihir Gold Ltd project on environmental grounds; if so, does this indicate that the Australian Government is prepared to accept lower environmental standards than the US Government.

(5) (a) Has Lihir Gold Ltd met the conditions set out in the loan agreement which pertain to environmental and social impacts of the project; (b) what is the nature of these conditions and what are the mechanisms for assessing and for reporting; (c) will the Minister publicly report on the adherence by Lihir Gold Ltd to the conditions; if not, why not; and (d) what action will be taken with regard to any breaches of conditions which may have occurred.

(6) (a) Since making the decision to insure the US$250 million in loans for the Lihir Gold Ltd project; (i) what investigations have AIDC, EFIC or the Australian Government undertaken to ensure that Lihir Gold Ltd is fulfilling the conditions of the loan agreement, and (ii) what have been the outcomes of these investigations; and (b) has Lihir Gold Ltd met all the conditions of the loan agreement.

(7) With reference to Cabinet's decision on 30 July 1995 to direct EFIC to insure loans to the value of US$250 million, and reports which indicated the Government would consider insuring a further US$500 million loan for the mining contract: (a) has the Australian Government, AIDC or EFIC been approached by any of the parties involved in the Lihir Gold Ltd project since making the initial decision, to insure or finance further components of the project; and (b) has the Australian Government, AIDC or EFIC made any decision or in-principle decision to further finance or insure loans pertaining to the project.

(8) (a) What loans and loan agreements have been made, or are in the process of being made, by EFIC or AIDC relating to international mining projects; and (b) what are the details as to the countries and purposes to which they relate.

Senator Parer —The Minister for Industry, Science and Tourism has provided the following answer to the honourable senator's question:

(1) (a) & (b) Lihir Gold Limited entered into a loan agreement dated 18 August 1995 with Union Bank of Switzerland, ABN AMRO Bank NV, AIDC Ltd, Citibank NA and Dresdner Australia Limited for a loan of up to US$300 million.

(c) Yes.

(2) (a) & (b) AIDC is not a party to any agreements in respect of Lihir Gold Ltd. Pursuant to section 9 of the AIDC Act 1970, as amended, AIDC is not subject to direction by or on behalf of the Commonwealth Government. AIDC Ltd, a subsidiary of the Australian Industry Development Corporation (AIDC), is not a Government Authority; it is a public company, 99.98% of the shares of which are held by AIDC. The terms of its agreement with Lihir Gold Ltd are classed as commercial in confidence. The Export Finance and Insurance Corporation (EFIC) is not a party to the loan agreement.

(3) As mentioned in (2) above the terms of the agreement between Lihir Gold Ltd and AIDC Ltd are classed as commercial in confidence. EFIC is not a party to the loan agreement.

(4) The Overseas Private Investment Corporation (OPIC) has not made public the grounds on which it chose not to proceed with consideration of insurance relating to the potential supply of US equipment to the Lihir project. These would normally be matters between the US Government's insurer and the project sponsors. As the then Minister, Senator Cook, advised in his reply to Senator Margetts on 28 November 1995, the Australian Government is not in a position to comment on the extent to which environmental or other grounds were relevant to the decisions of an agency of another government.

(5) (a) See (3) above.

(b), (c) & (d) The nature of the conditions set out in the loan agreement are classed as commercial in confidence and are a matter for the parties to the loan agreement.

(6) (a) (i) and (ii) & (b) The loan agreement is administered by the financiers who are parties to it. EFIC is not a party to the agreement. The financiers are required to advise EFIC of any event of default under the loan agreement, including any that might arise from non-compliance with loan conditions. EFIC has received no such advice. As mentioned in (3) above the terms of the loan agreement between Lihir Gold Ltd and AIDC Ltd are classed as commercial in confidence.

(7) (a) & (b) When giving approval to provide political risk insurance to the banking syndicate, Cabinet also approved the provision of up to US$110m of additional political risk insurance to support Australian companies bidding to provide contract mining services to Lihir. Within the terms of this approval, EFIC has issued policies totalling US$8.5m and anticipates being approached to issue further policies later this year.

In addition, EFIC has issued several export credit insurance policies (currently relating to exports of under A$100,000 in value) in the normal course of its business, covering the relevant Australian exporters for certain losses should they not be paid for goods and services which they sell to the project.

The issues of further approaches to AIDC Ltd for funding and the decisions (or in-principle decisions) relating to any such approaches are classed as commercial in confidence.

(8) (a) & (b) In the period since its establishment under the EFIC Act 1991, in respect of loans or loan agreements relating to international mining projects, EFIC has:

   approved (1991) and made a loan in relation to a coal washery in Vietnam; and

   approved (1996) a loan guarantee for conveyor equipment for a coal mine in Thailand. The loan has not yet been drawn down.

In addition to these loans, in 1995, EFIC provided political risk insurance to a company establishing a new gold mine at Tolukuma in Papua New Guinea.

EFIC is unable, for commercial in confidence reasons, to release details relating to loans and loan agreements which are in the process of being made.

Information regarding loans and loan agreements made by EFIC's predecessor organisations is set out in the annual reports of those organisations.

The issues of loans and loan agreements by AIDC Ltd relating to international mining projects, the countries and purposes are classed as commercial in confidence.