Economy. Papua New Guinea press review

Prime Minister of Papua New Guinea (PNG) Hon. James Marape explained why the mining lease renewal sought by Barrick Niugini Limited (BNL) had been rejected, and why a special mining lease would now be issued to the Kumul Mineral Holdings Limited (KMHL). According to PNG Prime Minister, BNL’s lease expired on the 16th of Aug 2019, and on the recommendation of the Mining Advisory Council, it was not renewed. Then BNL and KMHL applied to the Mineral Resources Authority (MRA) for a new special mining lease. «[The MRA] decision was in favour of KMHL […] BNL has all rights to contest our process in court and it is in all parties’ interest to conclude the matter fast […] But if Barrick feels they want to be still at Porgera, then it is now up to them to meet KMHL to discuss how they could remain in Porgera under KMHL’s special mining lease, » Mr. Marape marked. Prime Minister also assured the landowners and the Enga government that they will benefit from the new arrangement. BNL has been operating at the Porgera mine since 2016. In turn, Opposition Leader Belden Namah called the Government’s move «devious, ill-advised, ill-timed and a fatal blow to investor confidence». Former PNG Prime Minister and currently Ialibu-Pangia (Southern Highlands Province) MP Peter O’Neill said that the decision would further destroy the country: «This government must be stopped from making more damage to the nation». [1]

Kumul Minerals Holdings Ltd (KMHL) Chairman and Acting Managing Director Peter Graham says that KMHL wants to engage Barrick Niugini Ltd (BNL) in an interim arrangement to restart the Porgera gold mine. According to Mr. Graham, they would also negotiate on a longer term deal, including having BNL as an equity participant and operator. Mr. Peter Graham also concerned «about the financial and social impacts of the mine closure on ex-employees and their families, SML landowners and the Porgera valley communities, Porgera Joint Venture, local businesses, and the national economy». [2]

Barrick (Niugini) Limited, majority owner and operator of the Porgera gold mine in Enga Province, intends to appeal the dismissal of its application for judicial review of the government’s decision earlier this year not to extend the Porgera special mining lease. [3] At the same time, PNG Prime Minister Hon. James Marape announced that the Government had granted a 20-year mining lease to Mayur Resources Ltd’s cement and lime project. The grant allowed construction to begin on the manufacturing facility located 25km North-West of Port Moresby. Mayur Resources Ltd. Managing Director Paul Mulder earlier said with a number of multi-billion-dollar resource and infrastructure projects in the pipeline in PNG, «we expect that the demand for cement, a key ingredient of concrete, will increase dramatically». PNG Mining Minister Johnson Tuke, agreed the project promised considerable upside for Papua New Guinea. Central Province Governor Robert Agarobe said the geographic location of the project raised its value well promising an overall better quality of life for the province. [4]

Anyway, PNG Prime Minister has made it absolutely clear that the people and country demand a good share of returns from its natural resources: «I will not apologise for this policy stance to anyone. That includes our investors. We welcome all investors to our country. They are entitled to a good return on their investment. But likewise, we too deserve our fair share». Mr. Marape said this during the Parliament session and gave an update on the status of some key projects currently on the table in the country, including current situation on Porgera Gold Mine, Wafi-Golpu, Papua LNG Project, P’nyang Gas project and Pasca Petroleum Project. « We are committed to completing negotiations on all these projects by the final quarter of 2020 […] We have analysed the financial models of all these projects and if we can negotiate a better deal, the country will receive significant financial benefits in the next 20 years, » Prime Minister said. According to Mr. Marape, the impact on the economy will be significant including more money to provincial governments and landowners, more revenue to national government, more investments in infrastructure, health, education and law and order and improvements in quality of lives of people, reduced reliance on borrowings or loans for financing budget and hence reduce debt, strong foreign reserves, stronger Kina, more jobs and income opportunities and increase foreign direct investment. [5]

Hon. James Marape also commended business houses in the country for adapting to the new normal of doing business amidst the COVID-19 pandemic. According to PNG Prime Minister, COVID-19 was expected to remain an issue till the end the year. Mr. Marape said that a lot of economies and countries around the world were adjusting to living with COVID-19 and finding the balance between the health of the country and its economy was important. [6]

Papua New Guinea has signed an agreement with an Australian firm to use hydro and geothermal resources to produce power for domestic and commercial use. On the 1st of September 2020 the US$40 billion (K136.6 billion) capital works agreement was signed with Fortescue Metals Group (Perth, Australia) in Port Moresby. PNG Prime Minister Hon. James Marape said that the deal secured a partnership that would develop the country’s hydropower resources to support green industrial options for domestic consumption and export to international markets. «COVID-19 has presented many challenges to my government and to our economy in 2020. However, I am greatly encouraged that despite these challenges, Papua New Guinea still represents significant investment potential for a major multinational like Fortescue, » Mr. Marape said. In turn, PNG State Enterprises Minister Sasindran Muthuvel said that «after extensive investigations of Papua New Guinea’s rivers and water resources, Fortescue has determined that there is great potential to generate sustainable energy for a series of environmentally-friendly industries». «Hydro-electric power is not a new technology for our country. We have been using our water resources to generate power since the late 1950s […] We have to be open-minded and consider each proposal not just as a business opportunity, but as an innovative investment that places PNG as a world leader in green sustainable industries […] This represents tens of billions of dollars in investment and thousands of jobs for our Papua New Guinea citizens, » said Mr. Muthuvel. [7]

PNG Works Minister Michael Nali says that more than 70% of roads in the country are in poor or failed conditions and needed K20 billion (US$5,76 billion) over 10 years to maintain. Mr. Nali told to the Parliament that reforms were necessary to address the state of roads. Mr. Michael Nali also says that Government’s immediate target is to see that 70% of the roads are improved and to connect the Highlands (Jiwaka, Eastern Highlands, Southern Highlands, Simbu, Western Highlands, Hela and Enga Provinces) and Momase (East Sepik, Madang, Morobe and Sandaun Provinces) Regions to Port Moresby by opening the Trans Island Highway. [8] [1]

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