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PNG Business News - January 30, 2023
Dr Mellam leaves Chamber after 5 years
Photo credit: PNG Chamber of Mines and Petroleum - Dr Albert Mellam, PhD PNG Chamber of Mines and Petroleum today announced the departure of Dr Albert Mellam, PhD, as the Executive Director of the Chamber, having served in this role for the past 5 years. Dr Mellam is the first Papua New Guinean and second Director to head this peak industry body in its 34 years of existence. The first Director was Mr Greg Anderson, who served as its Founding Director and led the Chamber for 29 years. The President of the Chamber, Mr Anthony Smaré, expressed the gratitude of the Chamber membership for Dr Mellam’s service “We thank Dr Mellam for his service and his invaluable contributions especially in guiding the Chamber through a challenging period of its history. During his tenure as Executive Director, Dr Mellam undertook important organisational reforms to strengthen the Chamber’s operations. Dr Mellam made significant progress with expanding the Chamber’s relationship with stakeholders, and in forging a stronger relationships with government and other stakeholders with an interest in the resources sector in Papua New Guinea.” In thanking the Chamber, Dr Mellam said: “I served the Chamber at a challenging time in its history. Much of my efforts were centred around the ongoing dialogue with government on key policies and proposed legislative reforms in the Hydrocarbon and Mineral industry, and in managing the impacts of the COVID-19 pandemic. Many operating companies that are critically important to the economic wellbeing of our country were impacted, and every effort was made to ensure these companies remained operational during the pandemic. “There was no global experience to draw from in managing industry affairs during this pandemic”, said Dr Mellam. He noted that besides remaining operational many companies had assisted the government and the public through the provision of health and safety materials and equipment. Asked to reflect on his time as the Executive Director, Dr Mellam said: “The national economy is going through an ‘evolutionary phase’ that will impact the Mining, Petroleum, and Energy sectors. This is a natural process and requires the collective efforts of all stakeholders to ensure positive outcomes that benefit the nation and people of Papua New Guinea and keeping the investment climate attractive. It is healthy for the industry and for development of the country’s resources that these conversations are taking place.” Among the challenges that continue to be faced is a significant hiatus in exploration activity that has impacted prospects for petroleum and mining discoveries that could propel more dynamic economic development in the country, Dr Mellam said. He would also like to see the dialogue on the reopening of the Porgera Mine concluded soon and the mine re-open. "Many thousands of jobs and families were impacted by the closure of the Porgera mine and it is my hope that operations can recommence soon, as this will help boost the national economy and contribute to affairs and development aspirations of the local region." Dr Mellam said he is confident he has left the Chamber in a good position to progress its contribution as a Peak industry body. He expressed gratitude to industry members, the government, landowner groups, development partners, the business community, institutions of higher learning and research organisations, and private citizens for the partnership he has enjoyed during his time with the Chamber. Dr Mellam’s departure took effect on 20th January 2023. The Chamber is now under the stewardship of Pansy Taueni-Sialis, the incumbent Chief Operating Officer, until a new Executive Director is appointed.
PNG Business News - January 30, 2023
PAPUA NEW GUINEA TO HOST WORLD INDIGENOUS BUSINESS FORUM 2023
Photo credit: PNG Office of the Prime Minister Facebook Page Prime Minister Hon. James Marape announced recently (Wednesday, January 25, 2023) that Papua New Guinea will host the World Indigenous Business Forum (WIBF) in October this year, 2023. The WIBF is a forum where indigenous people from all over the world like the New Zealand Maoris, American Indians and Australian Aborigines converge for face-to-face conversations, envisioning, shared learning, mutual opportunity, investment possibilities and a social and economic purpose. It is a forum that specifically promotes indigenous businesses from all around the world. WIBF provides a platform for exchange of ideas, creation of partnerships and bringing investment to communities, entrepreneurs, and organisations. “I am happy to announce that the National Executive Council has approved for Papua New Guinea to host and co-fund WIBF this year. This will be the biggest event that we will host as a country after APEC 2018,” PM Marape said, “We have been supporting our local SMEs as a core policy of this Government and hosting of this event will not only highlight our support for the world indigenous business, but it will also provide an opportunity for our local business to build international networks, create partnerships and also look for markets among all the countries that will attend the forum. Our local entrepreneurs and SMEs will have the opportunity to showcase their products, share experiences, best practices and inspiration from successful businesses across the globe. “We want to use the opportunity to promote Papua New Guinea as an investment destination, a tourist destination, as a safe place to do business, open up opportunities for us to build networks to find export markets for our products to the world, and also help us to encourage indigenous businesses from all around the world to come and invest in PNG.” Over 600 indigenous businesses from all over the world and at least 400 indigenous Papua New Guinean businesses are expected to be part of WIBF 2023. “My Government plans to have a big indigenous business expo to run concurrently with the WIBF so that our indigenous businesses in Papua New Guinea can use the opportunity to promote their indigenous goods and services to the world. Our delegates to this forum will only be indigenous Papua New Guineans as that is the nature of WIBF. We expect this forum to also bring in up to K10 million into the country,” PM Marape said. The Ministry for International Trade & Investment will be the lead partner and a National Steering Committee that will be chaired by Vice-Minister for International Trade and Investment, Hon. Kessy Sawang, will be set up. The committee will comprise of relevant Government agencies and private sector including Tourism Promotion Authority, Department of Agriculture, Department of Foreign Affairs, Cocoa Board, Coffee Industry Corporation, SME Corporation and MSME Council. “I call on all our indigenous SMEs and large companies to prepare well and take full advantage of this one-off opportunity to market your products and services and our country to the delegations from around the world who will be coming to attend this forum. You must also canvas new business opportunities and forge partnerships to grow your businesses with new indigenous partners from around the world,” PM Marape said.
PNG Business News - January 30, 2023
PM MARAPE WELCOMES NEW NATIONAL TRADE LAW
Photo credit: PNG Office of the Prime Minister Facebook Page Prime Minister Hon. James Marape has welcomed passage of the landmark National Trade Bill 2023 by Parliament. The landmark bill, unanimously passed by Parliament last Thursday (January 19, 2023) after much debate, was introduced by Minister for International Trade and Investment Hon. Richard Maru. It adds to the growing number of important laws passed by the Marape Government since 2019. “I welcome passage of this very-important bill by Parliament after being introduced by Minister Maru,” PM Marape said. “It will facilitate the promotion and expansion of trade and investment in the country and do away with the bottlenecks of the past which have hindered, rather than progressed, exports of our raw materials to other countries. “One of the most-obvious bottlenecks has been continuous transfer of the trade functions between departments of Foreign Affairs and Trade and Industry – resulting in chaos and confusion. “Lack of properly-coordinated trade has seen smaller countries from the Pacific being able to export their taro, ginger and handicrafts to Australia and New Zealand while Papua New Guinea – which has over 80 per cent of the population and landmass – cannot get our agriculture and fisheries products into Australia and New Zealand markets “A competent and dedicated National Trade Office will be set up – under Department of International Trade and Investment - with a clear legal mandate to identify, negotiate and secure new and better market access for our goods and services.” The National Trade Office will: Provide leadership and police advice on implementation of the National Trade Policy 2017-2032 and trading matters across all sectors of the economy; Spearhead development and improvement of policy, negotiations, promotion and regulations of trade ad advise Government accordingly; Coordinate and maintain oversight across all sector on implementation of the policy; and Play an advisory role of oversight for regulatory and facilitating agencies of Government on trade-related issues.
PNG Business News - January 30, 2023
Feasibility Study on Bilateral Trade between PNG and Australia Set to Commence
Photo credit: International Trade and Investment Ministry of Papua New Guinea Facebook Page A full feasibility study on the bilateral trade between Papua New Guinea (PNG) and Australia will commence at the beginning of next month. This was announced by the Minister for International Trade and Investment, Honourable Richard Maru ahead of a PNG Australia Ministerial Meeting that is scheduled to be held next month. Minister Maru said, a full term of reference has been agreed to between the two countries and the Centre for International Economics (CIE) will deliver the study beginning February this year. “The study assesses the feasibility of a comprehensive bilateral FTA covering goods and services as well as other crosscutting issues such as investment and local content policies, competition policy, movement of people, sanitary and phytosanitary issues, and technical barriers to trade,” said Minister Maru. The trade relations between PNG and Australia have been under the PNG-Australia Trade and Economic Relations Agreement signed in the 1970s and recently under the South Pacific Regional Trade and Economic Corporation Agreement. “Despite Market access offered under these arrangements, for PNG, they have not served their purpose to increase PNG’s exports. Only one commodity group seems to enjoy increased market share in Australia which is gold, copper and other precious metals. Current statistics indicate that over 98.9% of PNG’s exports to Australia comes from the mining and petroleum sectors. Other commodities which are very critical for economic development, poverty alleviation and improving the living standards of ordinary Papua New Guineans see a declining market share in Australia although the demand or market in Australia seems to be increasing for these products which PNG can or is able to supply. A similar pattern is revealed for the services sector. Australia continues to enjoy significant services trade surplus in the PNG market whilst PNG experiences great difficulty to supply services connected to the temporary movement of natural persons and other services skill,” said Minister Maru. “Therefore, this study is very critical to assess how to make trade and investment between PNG and Australia work for the benefit of our people. The study will assess why PNG products especially from the agriculture and manufacturing sector continue to face stringent quarantine and other Non-Tariff barriers to trade making PNG products difficult to enter the Australian Market and make recommendations forward,” Minister Maru added. The study will cover amongst others; Assessing the prospects for the expansion of trade in goods and services across a range of sectors, particularly fisheries and agricultural products, through liberalisation of tariffs, consistent with WTO principles, and the removal of other impediments to trade. Identifying options to address barriers to investment in the PNG agricultural and seafood sectors and exports of these products; and Identifying the economic and strategic benefits that Australia and PNG could derive from mutual participation in a formal trade agreement or other trade instrument, including economic modelling on the potential two-way benefits and costs at the sector level that each country could derive A team from CIE will be in the country beginning February to do consultations with stakeholders and will deliver the final report by June 2023. “I look forward to the outcome of the study which will be implemented soon after the report is delivered. We hope to engage with the Australians for a bilateral trade agreement, a trade agreement that addresses issues that hinders PNG exports and one that is beneficial to PNG similar to the Economic Partnership Agreement with the European Union,” said Minister Maru.
PNG Business News - January 30, 2023
Filipino Rice Investors Choose Gabadi for Rice Nucleus Estate Model Farm
Photo credit: International Trade and Investment Ministry of Papua New Guinea Facebook Page The team of rice investors from the Republic of the Philippines who arrived on Monday have chosen Gabadi in the Kairuku District of Central Province as the most ideal location for large-scale rice investment in Papua New Guinea (PNG), under the nucleus estate concept. They want to establish a 800-hectare estate rice model farm and train and support local village out grower farmers under family owned or rice-cooperative farmers from Brown River to Vanapa and to Gabadi all the way to Bereina. The Filipino investors’ plan for this Rice Nucleus Estate Model Farm is to set up rice demonstration blocks, a rice processing plant and farmer training facilities for out growers. “We want to train the local farmers to be better rice farmers and we will buy all the rice that they produce. We will bring our science and technology and invest in mechanized large-scale commercial rice farming in PNG,” said former Philippines Department of Agriculture Secretary, Dr. Emmanuel Pinol. The land they are interested in to set up the 800-hectare model rice farm with all the processing facilities is the recently acquired Manumanu State land which was recently acquired by the Government through KCHL for K34 million. The local people at Gabadi have vigorously opposed the establishment of the Military Barracks and welcomed the visit of the National Government and the Filipino Rice investors when they visited yesterday. They indicated full support for the rice industry development including the use of the Manumanu land for the rice model farm so they can also benefit from the cultivation of rice as their major cash crop in the Kairuku District. “We need large-scale jobs and wealth creation opportunities,” said the Ukaukana village Councillor of the Kairuku LLG, Victor Maggio. Minister Maru said the undeveloped land will not generate any return to the State for the K34 million it spent to buy the land. “The development of over 100, 000 hectares of rice in Kairuku District will replace over K800 million in rice imports annually with the proposed Gabadi model farm being the catalyst. We will need only one year for the Government to recoup the K34 million it spent to acquire the Manumanu land purely on economic returns,” said Minister Maru. “We must make use of thousands of hectares of unused State land all over the country to generate revenue and create employment and wealth for our citizens. The Manumanu land is one of such land,” Minister Maru said. The Filipino delegation led by Dr. Pinol and consisting of scientists, engineers, economists, financiers, as well as an award-winning farmer were convinced that Gabadi is the ideal location for them to farm rice. After conducting some rapid field tests, Dr Pinol said that Gabadi and the surrounding areas have the right mixture of silty loam and clay in their soils, a lot of available water, abundance of flat land and good climate. They collected soil samples from Brown River, Vanapa and Gabadi and were so impressed will be agronomic conditions for rice growing in PNG. “In the Philippines, on average, rice yield per hectare is only 4 tons whilst in Papua New Guinea, around Central Province you could easily have an average yield of up to 8 hectares of rice per ton making PNG one of the most ideal countries to grow rice anywhere in the world,” said Dr. Pinol. “PNG can be a major rice exporter to the world in the future if it fully develops its rice potential,” he added. From initial estimates from the trip yesterday, the Brown River area could mobilize 10,000 hectares for rice, Vanapa up to 40,000 hectares of logged out land flat land and Gabadi and outwards to Bereina and beyond another 100,000 hectares. “Combined with Rigo District the Central Province could easily grow and feed the entire country with rice, if we use mechanized farming methods, drone irrigation and solar power to provide electricity. Papua New Guinea only needs 100,000 hectares of rice farms to produce the 400,000 tonnes of rice we consume annually,” said Minister Maru. The Filipino delegation also met with Prime Minister, Hon. James Marape yesterday and briefed him on their trip to the Central Province and their bold decision to build a model rice farm in Gabadi this year. “If agreement is reached between the National Government, who owns the Manumanu land at Gabadi, the Central Provincial Government, the Kairiku District Development Authority, the Hiri Koiari District Development Authority and the local impact communities, the project can begin this year,” said Minister Maru. Minister Maru asked the Philippines delegation to formally communicate their interest to the Government so he can formally put to them the process we can jointly follow to bring the project into reality. “It will certainly start with a full feasibility study with a 10-year rice development plan, fully costed with financial modelling to assess the scientific, technical, environmental and financial viability of the project. This includes ascertaining the capital investments that is required to be made,” Minister Maru said. Minister Maru said the Marape-Rosso Government is keen to be a shareholder in the project together with the Central Provincial Government and the respective DDAs and LLGs. “The National Government must also take a decision to free up the Manumanu land for this agriculture project to help our country finally after 47 years to start on such a project of national significance that has the potential to supply our country our entire country and help us replace the K800 million we spend annually on rice import,” said Minister Maru. “It will only help us create thousands of new jobs for rice farmers and business opportunities for our families. The Philippines has a dual interest in investing in rice in Papua New Guinea. It is an exciting investment opportunity for them while the investment is also needed to their own food security. They will export the surplus rice back to the Philippines. They do not have the land to grow enough rice to feed their own people, whose staple diet is rice,” Minister Maru said. “The Gabadi Model Farm is such a high priority of the Marape-Rosso Government so I will request the investor to fast track the completion of the feasibility studies so we can put a detailed submission to the NEC to approve this project in the coming months in close consultation with the respective DDA’s, the Department of Agriculture, the Central Provincial Government and the Prime Minister and the National Government. The Central Province commercial rice industry will be developed as a Special Economic Zone project so the Government can provide the project all the support it needs both in fiscal incentives and infrastructure support including extending the power lines down to Gabadi, where the proposed model farm will be established,” said Minister Maru. “This large-scale rice development opportunity with our Philippines investors presents the best opportunity our country has had since Independence to replace our rice imports of K800 million annually and propel PNG into being a net rice exporter to the world so grab this opportunity with both hands and run with it,” said Minister Maru.
PNG Business News - January 30, 2023
Minister Maru Invites Indonesia to Host First PNG-Indonesia Trade Meeting
Photo credit: International Trade and Investment Ministry of Papua New Guinea Facebook Page Minister for International Trade and Investment, Hon. Richard Maru has invited Indonesia through its Ambassador to Papua New Guinea, His Excellency Adriana Supandy to host the first ever historical PNG-Indonesia Trade Meeting this year in Jayapura, Indonesia. “I want the first historic Trade Meeting between our two countries to happen this year in Jayapura in March,” said Minister Maru during his meeting with Ambassador Supandy on Friday last week. “If Indonesia agrees to have the Trade Meeting, then we can put together an agenda for the meeting and also put together a technical working committee to organize the meeting. Our Trade Team will not only be made up of Government Departments and Agencies but also representatives from East Sepik, West Sepik and Western Province,” said Minister Maru. Minister Maru said he will meet with the Indonesian Trade Minister in his follow-up trip to Jakarta after the Trade Meeting to have their first bilateral meeting, mainly to discuss Indonesia President Joko Widodo’s visit to Papua New Guinea (PNG) this year and hold initial talks on working together to develop a framework to negotiate a bilateral trade agreement between PNG and Indonesia. “We don’t want President Widodo to come for just another visit, we want him to come with the private sector of Indonesia to hold first Indonesian Trade Fair in Port Moresby where big companies of Indonesia can come and promote their products, including their banks. President Widodo can open the Trade Fair as part of the program for his visit. That is one agenda that I want to discuss with the Indonesian Trade Minister and the Indonesian Chamber of Commerce and their Private Sector,” said Minister Maru. “Many Papua New Guineans do not know what products Indonesia produces and one way through which they can know is when they walk through an Indonesian Trade Fair. We want to start marketing Indonesian goods here and of course our goods to Indonesia,” said Minister Maru. Minister Maru also added that PNG and Indonesia needed to quickly look at opening flights and shipping services between the two countries, and also look at having a sports relationship to build people to people relationship in addition to our students going to study in Indonesian Universities and Colleges. “When I first took office last year, I made a bold statement that Indonesia will be the highest trade priority of Papua New Guinea in this term of parliament. My Ministry and Department will work to translate my statement to concrete and tangible actions and results,” said Minister Maru.
Paul Oeka - January 30, 2023
MARU: PRIORITISING SEZs VITAL FOR ECONOMIC GROWTH
Photo: Minister for Trade and International Investment, Hon. Richard Maru Special Economic Zones are a launching pad for economic development in the country, and the current government has taken a decisive stance under the leadership of current Prime Minister James Marape by setting up and legislating 18 SEZs in 2019. This policy was the brainchild of PM Marape right after taking office in a successful vote of no confidence against the former Peoples National Congress (PNC)-led government. The remainder of that period leading up to the 2022 general election was spent on identifying the different SEZs around the country. In this fact-finding mission to identify suitable land available for massive agroeconomic projects, 18 potential agricultural hubs were identified across the country in certain provinces. These 18 economic zones include Kokopo Tourism Zone, Tokua Airport City SEZ and Gazelle Agro SEZ (East New Britain), Sepik Plains SEZ (East Sepik), Vanimo Free Trade Zone (Sandaun), Central Province Rice Zone, Baiyer Agriculture Zone (Western Highlands), Karamui Agriculture Zone (Simbu); Middle Ramu Economic Zone and PMIZ (Madang), Western Province SEZ, Labu SEZ, Nadzab Airport City SEZ and Lae- Nadzab SEZ (Morobe), Ihu SEZ (Gulf), and Manus Special Economic Region. At the same time, a new ministry responsible for this massive initiative to transform the economic landscape of the country was established as the Ministry of International Trade and Investment. It is currently held and led by MP for Yangoru-Saissia Richard Maru. Minister Maru announced last December that Papua New Guinea’s new journey to achieve economic independence and transformation has begun. Enough talk of SEZs has already been done and it was time for “action and implementation”. "We want to start bringing investors to start establishing the SEZs by 2023 so we can create jobs for our people and transform our economy. Our over-dependency on the resource sector has left us where we are now – the highest level of unemployment, the highest level of deficit, the highest level of national debt, and the highest level of lawlessness,” he said. “A draft master plan will be presented in April (2023) when PNG hosts its very first SEZ Summit in Port Moresby, where all SEZ experts from around the world will come together to share their stories and experience on how their countries used SEZs as a vehicle for economic growth.” “These experts will be allowed to comment and put their input in the draft master plan before it is finalized and presented to the Government for approval and implementation,” said Minister Maru. As the initial idea to legislate and formulate its framework is all good, much is left to accomplish in the actual implementation phase, he said. “This is a new policy directed under the new government and we cannot compare this to past government policies such as the controversial Pacific Marine Industrial Zone (PMIZ) in Madang and the Konebada Petroleum Park in Central.” The only difference this current government will make is by using the five-year mandate to develop these 18- SEZs to accommodate agro-economic projects that will directly substitute imports and enable the export of any surpluses to our Pacific neighbors under the Pacific Islands Forum (PIF) and Melanesian Spearhead Group (MSG) trade agreements and treaties, Mr. Maru said. The onus of developing and realizing the full potential of these SEZs depends on the support of host provincial governments and district development authorities (DDAs) concerned, he added. The counterpart funding put in by Provincial Governments and DDAs to support SEZs in their areas would be reimbursed as announced by PM Marape. The projects will benefit the host provinces in increased internal revenue, employment, transfer of technical knowledge and skills, and other local SME spin-off benefits. Therefore, if Papua New Guinea is to become fully economically independent by 2050, prioritizing and developing these SEZs is the way forward, Mr. Maru said. The Ministry of Trade and International Relations should check on the status of the proposed land that is to be developed under the SEZs and facilitate and transfer all titles to the respective SEZs to take custody of each of the selected 18 sites. They would be independently assessed, valued, and demarcated for these purposes, and to consider as state leases to add onto the meager 3 percent of alienated land under state ownership, Mr. Maru said. The Prime Minister's announcement of purchasing land to expand towns, cities, and district boundaries is the right direction that can also include the SEZs, he added. “The long-term effect of these developments would enormously benefit Papua New Guineans in various other ways in many years going forward.”
Paul Oeka - January 30, 2023
Country’s Leading Cocoa Producing District to limit foreign middlemen in the buying process
Photo credit: Paga Hill Estate The Yangoru-Saussia District in the East Sepik Province is undergoing a phase of significant and progressive transformation as local farmers will benefit from a direct cash injection that will see a new revolution in cocoa production. Currently, the Cocoa Board has reported that the district produced 9,000 metric tons of cocoa in 2022, the highest in the country. East Sepik produces 15,000 metric tons of cocoa in total, counting its the other six districts. Given these overwhelming statistics, farmers have become victims of middlemen who facilitate the exports of dry cocoa beans. Just recently, a landmark board decision by the Yangoru Saussia District Development Authority (DDA) was made in a meeting in which they agreed to part ways with all the middlemen. Yangoru Saussia DDA Chairman and local MP and Minister for International Trade and Investment Richard Maru said foreign middlemen who have been buying and exporting cocoa in the district are the ones who benefit the most financially from the hard labour of local farmers. “So now we are working to create and implement solutions to cut off any interference from foreigners in the buying process from these foreign parties for local farmers to enjoy the benefits of their labour,” he said. MP Maru added that the landmark decision regarding cocoa and vanilla was made also during the DDA meeting, based entirely on the survey carried out and fully funded in all 96 council wards of the district. "Our District is the first in the province and possibly the country to undertake a first-ever detailed agriculture survey with particular focus on cocoa and vanilla production,” Mr. Maru said. “Yangoru Saussia is currently producing 60 percent of East Sepik cocoa, as per the cocoa board’s statistics. East Yangoru alone produces over 50 percent of the district's cocoa and 30 percent of the province’s cocoa,” he added. “Under the current business arrangement, foreign middleman export companies are still the winners from the toil and sweat of our farmers. Our decisions regarding cocoa have been to cut off the foreign middleman and to transfer the saved margin to our farmers through value-added increase prices," Maru reiterated. According to the resolutions passed, YSDDA will invest K500,000 into Ninire Agro Investment Ltd (NAIL), a business arm and a subsidiary company of the district. The company will then be in partnership with Innovative Agro Industries (IAI) and possibly with Kumul Consolidated Holdings (KCH) and will start buying cocoa from local farmers. The people of Yangoru Saussia will also be eligible to buy shares in the company in which the board has already nominated the founding directors and will be managed by Innovative Agro Industries. “YSDDA will also invest K500,000 to replace all wood fire cocoa fermenters so that solar dry quality cocoa beans can be introduced which will be able to fetch premium prices,” Mr. Maru said. “To start, we will control and focus more on quality, which is to remove wood-fired fermenters and maintain the 100 percent organic stallholder farmers' production status. The next stage will be to process our own high-quality Sepik fresh chocolates and other by-products from our own cocoa,” the minister stated. “In 2020, the national government had given each district K2 million in Covid-19 funding with guidelines that 50 percent of this funding will be spent on agricultural activities, 25 percent on Water Sanitation and Hygiene (WASH), and the other 25 percent on SMEs,” he added. “The YSSDDA board had resolved that the agricultural component of K1 million will all be invested in cocoa to increase production, improve quality, cut off foreign middlemen, and improve prices and full ownership by our people.” “We are expecting our increase in cocoa production to 18,000 metric tons per year, which will increase earnings from the current K55 million to over K100 million per year going directly to local farmers," Mr. Maru said. According to data collected from one of PNGs biggest food manufacturing companies, Paradise Foods has been using only 2000 metric tons of cocoa per year to produce the Queen Emma Chocolate brand. This gives way for a potential shift to downstream processing for the Yangoru Saussia District with their proposed production target of 18,000 metric tons of the best quality soar dried cocoa annually. Meanwhile, the agricultural survey that was carried out in the district also revealed statistics on its vanilla production. The findings showed that vanilla has about 6,918 farmers who produce 83 metric tons of sun-dried and cured vanilla beans, which produce a revenue of K25 million per year. “For cocoa and vanilla alone, Yangoru Saussia generates over K80 million per year. We aim to double that production and increase earnings to over K100 million for cocoa and K50 million for vanilla per year. As mentioned, this is the first ever cocoa and vanilla research and survey undertaken by a provincial district,” the minister said. The reports and recommendations highlighted in the survey will be used for planning in partnership with UNFAO (United Nations Food and Agriculture Organization), private sector investors, and other stakeholders to improve the cocoa industry in Yangoru Saussia and East Sepik Province,” Maru said. The YSDDA has also agreed to make key interventions – a district cocoa and vanilla policy, farmer mobilization, memoranda with key stakeholders, central processing and marketing center with capacity building of farmers and extension officers, and an agriculture resource and service hub to support and coordinate the systems to be implemented. “Apart from investment in helping to build more nurseries in the district to produce cocoa seedlings, we will be embarking on a new program to improve the production of yields per hectare for individual farmers working through the cocoa co-operative society network in our district. We want to focus on increasing the yield per hectare," the minister. “East Sepik Province once had K5 million internal revenue, but it had increased to K15 million and is still climbing. How are we climbing when we have no mine? We are climbing on the back of cocoa and other agricultural produce,” Maru said. The people of Yangoru Saussia district now must increase cocoa production by replacing old senile trees and planting new cocoa plots to see the investment in its business arm Ninire Agro's progress, he said.
Paul Oeka - January 30, 2023
KPHL HOSTS GOLF TOURNEY TO SUPPORT COUNTRY’S CANCER CENTER
Photo: Luke Liria speaking at the official charity golf Launch Kumul Petroleum Holdings Limited (KPHL) is once again hosting its inaugural ANGAU Cancer Charity Golf tournament for the third year in partnership with Morobe Provincial Health Authority in Lae next month to support The National Cancer Treatment Center at Lae’s Angau Hospital. Luke Liria, Executive Director for KPHL’s Corporate Affairs, said proceeds raised from the Golf Challenge would help with procuring the necessary chemotherapy drugs and other consumables and equipment used in the treatment of cancer. “We at KPHL are more than happy to be once again hosting this event. It is great that we have received such a significant level of interest from other corporate business houses to join us in supporting this very worthy cause.” “The board of KPHL has approved this charity golf challenge to be held annually to support and help the cancer treatment center at Angau to relieve the shortage of drugs that are needed for treatment at the center. We will coordinate directly with the Morobe Provincial Health Authority and Angau's Cancer unit to support the supply of critical drugs," Mr. Liria said. In 2020 KPHL signed a memorandum of understanding with the Morobe Provincial Health Authority, which assigns an amount of K15 million to support and improve cancer services at Angau. The funding will be used to purchase the required element for the cobalt-60 Unit for radiotherapy treatment at the cancer center. “I am appealing to business houses to support the golf tournament by participating and fielding teams. I would like to thank all teams who have agreed to participate, especially those companies who have pledged to make additional contributions, and those who have kindly donated a range of very worthwhile prizes,” Liria mentioned. Leading up to the event, fantastic cooperation has ensued between the management of the Lae Golf Club and the KPHL working committee. They have been kept busy organizing all the smaller details that ensure the success of the upcoming event, such as having a St John Ambulance on site and standby, safety precautions, photography, and media coverage. Meantime, the guest speaker for the event will be someone from the Angau Cancer treatment center, who will explain the nature of the services provided and the social problems that they are addressing. This is to ensure that all event participants are aware of how the proceeds for the Cancer Charity Golf Challenge would be used. In previous years KPHL has also held golf challenges and donated the proceeds from these events to charity organizations such as Life PNG Care (NGO), which operates in Port Moresby, and various other NGOs that support underprivileged and disabled children in the National Capital District, Southern Highlands, Western Highlands, and Enga provinces.
Paul Oeka - January 30, 2023
BULOLO MP QUESTIONS LAWS ON ALLUVIAL MINING
Photo: Sam Basil Junior. credit: Sam Basil Junior Facebook Page The alluvial mining sector is a fast-growing sector in Papua New Guinea, with more than 80,000 alluvial miners engaged in the sector, which also generates a significant amount of export receipts in millions of kina to the PNG economy annually. The Bulolo area in Morobe has been known for its alluvial mining activities since the colonial era. This area is still active today, but it has been found that certain individuals who are not locals and landowners in the area have been granted licenses to carry out alluvial mining in the Wau Bulolo area. These concerns have been raised and forwarded to the Wau Bulolo MP Sam Basil Jnr, who in turn raised it on the floor of Parliament last week with Mining Minister Ano Pala. Basil Jnr questioned the laws surrounding the alluvial mining sector, particularly on why Landowners' rights were overlooked and not prioritized and urged the Mining Minister to clarify why locals are not being protected. "This is in regard to the need to amend the Mining Act of 1992, particularly relating to the protection of landowner rights, especially in the sector of alluvial mining. If the mining department has not started work on amending the Mining Act yet, does it have any plans to push for an alluvial mining act that will protect Landowner rights over other citizens?" Mr. Basil Jnr said. Mr. Pala said his department is working to amend certain sections of the alluvial mining laws to give more access and opportunities to locals. The minister also stated that currently there is confusion surrounding this law and the amendments that will be made will qualify who should conduct alluvial mining and where it should be conducted. "Under the law that is in place now, it states that only Landowners can operate in alluvial gold mining, but there are instances where exploration licenses have been issued to other parties who are not landowners to conduct alluvial mining operations," Mr. Pala said. The mining minister said there is a lot of confusion relating to alluvial mining since the laws relating to it are from the colonial era. He gave assurance that the process of amending these laws is in progress and will come through with amendments to the Mining Act. Mr. Pala said these confusions surrounding the laws relating to alluvial mining will be sorted out shortly. "I agree that there are some adjustments that need to be made because only nationals are allowed to do alluvial gold mining. But unfortunately, the current law also states that someone can get an exploration license to operate alluvial mining over the area in which you have the legal right and that is now the area of concern that the mining department is looking to amend and sort out," he said. As of November 2020, more than 100 leaseholders have registered with the Morobe Alluvial Mining Limited created by the former Morobe Governor Ginson Saonu to participate in projects in the areas of Wau and Bulolo. Before these, in a report in August last year by the Post Courier, Justin Parker, CEO of Golden Valley Enterprise, a mining and metals company that specializes in buying and smelting gold, also expressed his concern about the lack of Government intervention in this sector. He stated there was a huge need to mechanize alluvial mining in PNG and the Government must take responsibility in supporting the sector because there are families in rural settings that mostly benefit from it. Alluvial mining is a legally recognized economic activity and is readily seen in all provinces of the country. Leases are held only by naturalized citizens, who must be the owner of the land over which the lease falls, and gold is the mineral usually mined alluvially across PNG.
Paul Oeka - January 30, 2023
IMPOSED BAN ON POULTRY CREATES CONFUSION WITH EXPORTERS
Papua New Guinea has ceased issuing import permits for Australian and Asian raw poultry in a trade move some viewed as political maneuvering. A blanket ban was imposed on the importation of frozen chickens into the country to protect the billion-kina local poultry industry. PNG's Agriculture Minister Aiye Tambua announced that the ban will take effect at the end of January. He said that protecting the poultry industry from imported diseases is the main reason for the decision. While authorities have made no official announcement, multiple industry sources said PNG customers had been told permits would not be issued for Asian and Australian chicken from January 6. It will not affect orders placed before the ban date, the government said. A letter from PNG’s National Agriculture Quarantine and Inspection Authority (NAQIA) obtained by the media mainly stated that importers should “refrain from importation” of chicken products. “The general public including importers and exporters are thereby informed that effective of 6 January 2023, NAQIA will cease issuance of import permit [sic] to import fresh, frozen and chilled chicken products,” the letter stated. On the downside, PNG imports nearly K200 million worth of frozen chickens annually. To meet the demand for this favorite protein, the Agriculture Minister has admitted that the importation ban will make consumers pay more at the counter, but he’s confident the two major producers of frozen chickens in the country will fill the demand gap. He also stated that protecting the billion-kina local poultry industry is important. Minister Tambua says Niugini Tablebirds and Zenag had given guarantees to increase production, which will create more than 2,000 job opportunities for Papua New Guineans. He further said that the ban will influence thousands of Papua New Guineans to venture into this poultry business to meet the demand, creating more income in the small to medium business space. In relation, a lot of confusion has raised from the imposed ban as some importers have pointed out that the unofficial trade ban came after a push by The Poultry Industry Association (PIA) of PNG before Christmas, which claimed that uncooked chicken from Australia and Asia contained “exotic poultry diseases” and was “illegal”. The said claims were made in a full-page advert in one of the country’s major daily newspapers, The National. The letter by NAQIA to importers also repeated the accusations, saying: “The Poultry Industry Association (PIA) has raised concerns to the government through the Minister of Agriculture on biosecurity risks.” Meanwhile, in a historic address to PNG’s parliament recently, Australian Prime Minister Mr. Anthony Albanese said he wanted the two nations to work closely to unlock prosperity. He also mentioned the Australian Government’s intent to improve and to assist with PNG’s biosecurity measures. “Our government also stands ready to assist PNG to improve your biosecurity regime to enable your farmers and producers to access international markets,” Albanese said. Australia is PNG’s biggest trade partner with bilateral trade of over $6 billion in 2020, according to Australia’s Department of Foreign Affairs and Trade. The value of chicken exports to PNG was about $23 million in 2021.
PNG Business News - January 23, 2023
K92 Mining Reports Strong 2023 Operational Guidance and Expansion of Exploration Activities
Photo credit: K92 Mining Inc K92 Mining Inc is pleased to provide its operational outlook for 2023. The Company expects gold equivalent production of 120,000-140,000 ounces, while also delivering low-cost production with an estimated cash cost of $620-$680 per ounce gold and AISC of $1,180-$1,300 per ounce gold. Cash cost and AISC per ounce have increased from 2022, driven predominantly by accelerating sustaining capital and development expenditures related to the Stage 3 and Stage 4 Expansions approved on December 6, 2022 (see December 6, 2022 press release: K92 Mining Announces Extension to Mining Lease 150 and Approval of the Kainantu Gold Mine Stage 3 and Stage 4 Expansions ), in addition to sustaining capital items that were planned to arrive in 2022 and are now arriving on-site in 2023 due to supply chain related delays. The Stage 3 and 4 Expansions are expected to transform the Kainantu Gold Mine into a Tier 1 mine, through significantly increased production and economies of scale. The Stage 4 PEA Case outlines peak annual production of 500,192 ounces AuEq in 2027, life of mine average AISC of $687/oz (co-product) or $444/oz net of by-product credits, and self-funding from mine cash flow at $1,600/oz Au. For exploration, 2023 is forecasted to have a significant increase in both near-mine and regional activities with forecasted expenditures of $13-16 million. Since 2020, the drill fleet has more than doubled to 11 drill rigs currently operating, with the number of drills planned to increase to 13 in 2023. Importantly, surface and underground exploration activities will continue to focus on resource growth at Kora, Judd, Kora South, Judd South, Kora Deeps, Judd Deeps and Northern Deeps vein systems, and the A1 copper-gold porphyry targets. In terms of growth capital, the tender process commenced in late-2022 for the Stage 3 and 4 Expansions. Upon completion of the tender process, timing of growth capital items that will be incurred this year will be established to provide 2023 guidance. John Lewins, K92 Chief Executive Officer and Director, stated, “In 2022, Kainantu once again took a major step forward, achieving its sixth consecutive year of production growth, including multiple records such as ore tonnes processed, ore tonnes mined, total tonnes mined and underground development. Importantly, Kainantu finished 2022 strong, achieving multiple quarterly records in the fourth quarter. In 2023, we look to continue to build on this positive operational momentum while also focusing on investing in the long-term future of Kainantu via the Stage 3 and 4 Expansions, which was approved in December 2022 following the renewal of the Mining License for a further 10 years through until the end of 2034. This will transform the Kainantu Gold Mine into a Tier 1 mine. As part of our guidance, we have incorporated contingency for supply chain related impacts as the global economy recovers from lingering effects of the COVID-19 pandemic environment, particularly in relation to suppliers in Asia. Based on our expectations of supply chain impact timing and stope sequencing, we expect the second half of 2023 to be our strongest in terms of production. We are also very excited about exploration in 2023, and are pleased to be expanding our activities, through increasing the number of drill rigs from 11 currently operating to 13. The number of highly prospective drill targets at Kainantu is very large and has grown considerably over the past 18 months through surface exploration work. Our surface drilling plans to target Kora South, Judd South, Judd and the A1 Copper-Gold Porphyry Target, with underground drilling targeting, Kora, Judd, Kora South, Judd South, Kora Deeps, Judd Deeps and Northern Deeps. Other targets identified may be drilled in 2023 and we look to provide exploration updates in due course.” Article courtesy of K92 Mining
PNG Business News - January 20, 2023
Barrick Gold CEO Urges PNG Parties to Complete Porgera Mine Reopening Negotiations by Q1 2023
Photo: Barrick Gold Corporation Chief Executive Officer Mark Bristow Barrick Gold Corporation Chief Executive Officer Mark Bristow has urged all PNG parties involved in the Porgera Mine reopening negotiations to complete the process by the end of the first quarter 2023. Bristow was in country as part of his quarterly visits to all Barrick owned and operated mines. In Port Moresby, Bristow met with Prime Minister James Marape, Mining Minister Sir Ano Pala, State Owned Enterprise Minister William Duma, Internal Security Minister Peter Tsiamalili Jr, Vice Minister of State Negotiations Jimmy Maladina, State Solicitor Daniel Rolpagarea and State Negotiation Team Chairman Dairi Vele. He also travelled to Porgera to meet with landowner and community leaders. This is Bristow’s 17th visit to PNG since joining Barrick as CEO in 2019. “The Porgera Mine has been closed for almost three years without good reason. When I visited the mine again yesterday, the landowners and community pleaded for the restart of the mine so that the local economy could be revived and put an end to their suffering. Despite the partnership with the State that we have built, it is unfortunate that certain critical issues remain to be resolved to enable the restart of the mine.” Mr. Bristow said. Porgera was placed under care and maintenance in April 2020. “Delaying the restart of Porgera is not in any stakeholder’s interest, especially the people of Porgera and PNG who have been deprived of the economic benefits of the mine for too long. It would be remiss of us to ignore the impact that the mine closure has had on the residents of Porgera Valley, local and national businesses, and the country’s economy as a whole. Barrick is ready to start the process of reopening the mine. What is needed is equal urgency on the part of all other parties to resolve the remaining issues,” Bristow said. While awaiting the restart of the mine, Bristow also urged government authorities to take necessary actions to restore essential government services to Porgera. Since the national elections of July last year, communities have been unable to access health, judicial, education and banking services in the Porgera Valley due to tribal conflicts, warlordism and ongoing law and order issues. Bristow was pleased with the news of the Ceasefire Agreement signed between the two warring clans this week in Wabag, and commended the Porgera Crisis Management team for their work in ensuring this important agreement was signed. Bristow agreed with the women’s group in Porgera that more action still needs to be taken by Government Authorities and local leaders to ensure security and normalcy returns to the district.
Paul Oeka - January 19, 2023
Minister for Agriculture implements price incentive for copra
Photo: Minister for Agriculture Aiya Tambua. Credit: Aiya Tambua LinkedIn Page Minister for Agriculture Aiya Tambua has announced the new price support for copra or coconut farmers in the country. Mr Tambua said brown coconut will now be bought at a price of K2, which is an increase of K1.1, while white coconut will be bought at K2.50, he said when visiting Madang province recently. The Agriculture Minister's visit to Madang began with a visit to the Stewart Coconut Research in the North Coast area of the province. He was briefed on the ongoing work of the coconut research centre and how the Government could assist with its reports and recommendations through the Department of Agriculture. Following his visit to the research centre Minister Tambua visited various coconut plantations in the area to have a close observation of the commodity. He was then shown to a local coconut nursery where he highlighted the announcement of the Copra Price Support Package. "In the past years, Copra was bought for 90 toea for brown coconuts, but now the government has stepped in and brought the price up to K2, which is a big relief for all your local coconut farmers. White coconut, which was bought at a price of K1.50 before, will now be bought at a price of K2.” “The current Government wants to ensure that people in the rural areas and villages must be able to earn money from their land," Minister Tambua announced. On a national scale, Madang used to be one of the leading coconut-producing provinces. However, over the years mechanisms to support farmers and expand the industry declined. The province has now been challenged to plant more coconut trees and be competitive in the industry. The Madang Governor, Ramsey Pariwa, said more support will be given to ensure that Madang's coconut industry is revived and developed. "We will start making sure that Agriculture becomes a huge priority here in Madang in this new year and the following years to come," Governor Pariwa said. The coconut industry contributes to the PNG national economy through the provision of employment and income for rural households and the generation of revenue from exporting copra, crude coconut oil (CNO), copra meal and virgin coconut oil (VCO) to overseas markets. According to the National Population Census, about 564,328 households are engaged in coconut activities in PNG to either generate income and/or as food to sustain their livelihoods. This represents 35% of the total households in PNG or an estimated 2.6 million people of the total population. The Agriculture Minister also presented the Coconut Industries Corporation K1 million to begin the implementation of the Copra Price Support Programme. He also encouraged the Coconut Industries Board and Management to implement the Coconut Industry Strategic Plan 2016-2025 to the best of their abilities. He stated that he will work as a team with the corporation to access appropriate National Government and donor funding for the successful implementation of the new pathway for the coconut industry in the coming years.
PNG Business News - January 19, 2023
CONNECT PNG PROGRAM LIKELY TO BE DELIVERED BY 2040
The National Government continues to embark on prioritizing its "Connect PNG Economic Road Transport Infrastructure Development Programme 2020-2040" with its delivery target set for 2040. This means by 2040, PNG will have access to 100 per cent road connectivity, connecting more than six million people to massive services and economic opportunities. The program provides a strategic pathway for implementing the National corridor development plan which covers 20 years. Within these 20 years, the Government will improve critical road networks comprised of the strategic national, sub-national and new missing link roads. This ensures and elevates physical access and connectivity for economic growth, productive investments, job creation, and poverty reduction in all regions and provinces. Minister for Works and Highways Solan Mirisim is adamant to drive the program with strong funding support from the Government, its donor agencies and development partners. To fully implement and guide the program the Government passed Connect PNG (Funding and Implementation Arrangements) Act 2021, which commenced on February 1, 2022, and is now operational and in progress. The key provision of the Act empowers the Government to commit a guaranteed long-term total funding of K20 billion commitment towards the program, with an annual national budget allocation forecast of 6.5 per cent (1.4 billion). The funding will involve combined GoPNG-CSO Partnership Policy financing commitments and pledges from loans, grants, and private financing at the lowest reasonable cost. The overall implementation program will develop, expand, rebuild, and sustain a road network of 16,200 km of strategic roads on a rolling 20-year program in 3-year phases. Phase one commenced already in 2022 and will be completed in 2027 targeting four high-priority spending areas, which will cover almost 8,000 km with an expected budget funding of K7.44 billion. The four high-priority spending areas include; Strategic Economic Highways, Construction of Missing Links, Building of Provincial and District Economic Roads, and the National Bridge Development and upgrade Program. Phase two of the program is expected to commence in 2028 and ends in 2034 with a projected funding commitment of K6.7 billion covering upgrading and expanding works, while phase three commences in 2035 and ends in 2040 with a projected funding commitment of K5.3 billion. It is understood that the program's future benefits and impacts are not guaranteed due to several critical challenges identified such as underfunding, procurement delays, social issues, inflationary risks, political risks, and natural events, which can potentially affect and have an impact on the implementation of phase one of the program. However, the Government has undertaken necessary actions to address this going forward so that the Connect PNG Program remains focused to deliver its targets and goals. Meantime, beginning of this year 2023, the Department of Works and Highways (DOWH) will be consistent with the Connect PNG Act 2022, regarding the carry-over of ongoing contractual commitments that total up to K6 billion.
Paul Oeka - January 19, 2023
Eastern Highlands launches its own SME Policy
Photo: Simon Sia and PNG SME Corp Delegates As the Government has placed more emphasis on Micro, Small & Medium Enterprises (MSMEs) and Small & Medium-Sized Enterprises in the country, Eastern Highlands Province launched its SME policy over the festive period. Governor for Eastern Highlands Simon Sia and delegates from the PNG SME corporation launched the SME policy in the provincial capital of Goroka. Small to Medium Enterprise Corporation Managing Director Petrus Ralda clarified and confirmed that Eastern Highlands Province is the first in the country to have its own SME policy. He stated that this is in line with the National SME policy framework and congratulated the Eastern Highland Province SME coordination team for implementing the Provincial SME policy. Mr Ralda further said that the SME Corporation is ready to work with the Eastern Highlands Provincial Government and SME coordination team to provide the necessary support. The official launch of the policy was well attended by more than 400 SME business owners in the province and also SME owners from the neighbouring Chimbu province who were present to witness and also showcase their various products and services. The EHP SME Policy is focused and developed upon a product of a hectic provincial consultation and discussions covering a wide range of areas including issues that needed urgent attention. The provincial SME coordination team stated that the SME movement in the province is growing rapidly, and an increasing number of SMEs are initiating business concepts, especially in agriculture and getting themselves registered through IPA Online Registration. The launch of the provincial SME policy provided an avenue and opportunity for SME owners to meet, greet and most importantly showcase their products and services as well as network with each other. Speaking at the launch, Governor Simon Sia, who was a prominent and well-known business figure in the Highlands region before entering politics, challenged all SME owners and aspiring entrepreneurs to set goals for their businesses and work harder towards achieving them. Governor Sia further urged all Eastern Highlanders to venture more into agricultural business activities to sustain themselves. The provincial SME policy has set out the foundation for SME growth, entrepreneurship and economic development in the province. Business services will be offered to assist and provide nourishment to small business owners, in rural areas so that it helps small people in bigger business environments.
PNG Business News - January 19, 2023
Confidence improves despite high inflation
Photo: BSP Group GM for Corporate Banking, Peter Beswick “Business and consumer confidence continued to improve during the final quarter of 2022, with anecdotal evidence across a broad section of our retailers and hotel operators experiencing record pre and post-Christmas sales activity”, said BSP Group GM for Corporate Banking, Peter Beswick. In giving his insight in the 2022 BSP Quarter 4 Pacific Economic and Market Insights Report, Mr. Beswick said, “increased business and leisure travel has seen hotel occupancies reach pre-COVID levels, with many hotel and accommodation facilities near full occupancy.” Mr. Beswick said for its Corporate Banking Customers BSP is projecting that demand velocity will continue throughout 2023. “Inflation on the other hand remains the primary concern for BPNG, businesses and consumers,” according to Mr. Beswick. On 12th December, 2022, BPNG increased the Cash Reserve Requirement to reduce market liquidity, as a further measure to counter imported inflation. On 3rd January, 2023, BPNG signalled a further increase in interest rates, with its third lift in the Kina Facility Rate by 25 basis points to 3.50%. This is likely to dampen investment and consumer spending. The report also highlighted that strong demand and ongoing supply issues, continue to boost goods’ price inflation. Key inflation drivers remain unchanged with elevated price levels ascribed to supply-chain disruptions, logistics costs and fuel prices. “Foreign Currency Reserves have hit multi-year highs at USD3.6 billion, delivering strong coverage for Government Foreign Currency loan repayment obligations and BPNG intervention for importers throughout 2023,” Mr. Beswick added. Back to investor confidence, Mr. Beswick said Papua LNG is a “go”, with Final Investment Decision (FID) expected late 2023 and this will deliver significant opportunities through local content for landowner and PNG companies, direct or through Joint Ventures with global engineering procurement and construction contractors. At end 2022, a number of tender packages were released to the market in the lead-up to FID. Papua LNG, Government infrastructure projects (Ports & Roads) plus our delayed resource opportunities — Porgera, Wafi-Golpu, Pnyang, and Twinza — are leading multiple customers to build people and resource capacity. Mr. Beswick concluded that “while there is a shortage of skilled and unskilled labour globally, our customers are focusing on looking after their best people. Retention strategies are now critical. Article courtesy of BSP
PNG Business News - January 19, 2023
Accelerate Foreign Direct Investments (FDIs) in 2023 to sustain PNG’s economic recovery
Photo: BSP Acting Group Chief Executive Officer Ronesh Dayal Papua New Guinea's economy through the course of 2022, has experienced higher levels of activity post the COVID-19 period. To maintain this shift in momentum, government needs to accelerate foreign direct investment (FDI) in 2023. According to the 2022 BSP Quarter 4 Pacific Economic and Market Insights Report, the Pacific region’s economies collectively grew by 5.3% in 2022, mainly driven by growth in PNG’s mineral sector and Fiji’s tourism sector. In 2023, all Pacific economies are expected to post positive GDP growth, with regional growth of 4.8% as the recovery in some countries stabilizes. BSP Acting Group Chief Executive Officer Ronesh Dayal said, “with the reopening of borders across the Pacific, we have seen marked improvement in economic activity across the Group compared to the COVID-19 period.” PNG’s economy grew by 4.6% in 2022, led by higher oil and gas production, as developers sought to capitalise on high prices. Production is expected to normalise in 2023, leading to a lower growth forecast of 4.0%. Non-resource sector GDP is estimated to have grown by 4.5% in 2022, and 4.6% is forecast for 2023. Whereas, resource sector GDP is forecasted to grow by 1.2% in 2023. Given PNG’s reliance on imports, the country was prone to the effects of heightened global inflation, driven largely by imported inflation for crude oil and foods. Though global inflation is expected to subside in 2023, we do not expect that this will immediately translate to lower prices for PNG consumers. Monetary policy tools including the Kina Facility Rate (KFR) and the Cash Reserve Requirement (CRR) have been used to tighten money supply and combat inflation. The KFR was increased to 3.50% in January 2023 and the CRR has increased steadily from 7% to 10% (pre-COVID levels) by the end of 2022. When speaking on the potential upsides for the PNG economy, Mr. Dayal added “In early 2023, we need to see tangible foreign direct investment (FDI) commitments particularly from the extractive sector, before we see PNG’s economic recovery commence,” and stressed that PNG needs FDIs in 2023 to consolidate its growth trajectory and achieve a sustainable recovery. Regarding the financial sectors role in the economic growth expected for PNG, Mr. Dayal added “differentiating industry corporate income tax rates, like those seen for commercial banks in PNG, can be particularly damaging for emerging economies such as PNG. Such tax policies are detrimental to the proper functioning of market forces and conflicts with modern economic theory.” “The tax rate increase to 45% on commercial banks comes at a time when other locally-grown financial institutions are looking to obtain commercial banking licenses. The timing is unfortunate and will act as a deterrent for the much needed expansion of the financial sector and investments in PNG,” he concluded. Article courtesy of BSP
PNG Business News - January 19, 2023
Santos Achieves Record Annual Production and Sales Revenue in 2022
Photo: Santos Managing Director and Chief Executive Officer Kevin Gallagher. Photo credit: Attila Csaszar Santos Managing Director and Chief Executive Officer Kevin Gallagher said Santos delivered record annual production and sales revenue in 2022, as strong base business performance positioned the company to benefit from higher commodity prices. Free cash flow of around US$3.6 billion was also a record and reduced gearing to approximately 18.7 per cent at the end of the year. This strong free cash flow positions the company to provide higher returns to shareholders and in December, we announced a further US$350 million increase in the on-market share buyback to up to US$700 million. “Our increased LNG position in Papua New Guinea following the Oil Search merger has driven our record performance. The LNG business is expected to remain strong with energy security being a top priority for our trading partners in the region,” Mr Gallagher said. “We remain committed to supplying the domestic market at reasonable prices. Average realised price for east coast domestic gas for the quarter was US$7.74/GJ, less than half the average realised price for LNG. “Given the strong customer demand for our product now and into the future, we will seek to backfill and sustain our core assets to deliver the critical fuels the world needs into the 2040s. But we will also seek to decarbonise these critical fuels, in-line with our emissions reductions targets, and produce clean fuels as customer demand evolves.” Official press release can be found HERE
PNG Business News - January 19, 2023
PM Marape says Australia is for the first time addressing outstanding issues with PNG
Photo: Prime Ministers Albanese and Marape at Commander’s Beach at Moem Barracks in Wewak .- PM’s Office Media Prime Minister Hon. James Marape says for the first time in 47 years of Independence for Papua New Guinea from Australia, an Australian Government and Prime Minister are addressing all outstanding issues between both countries. He said this recently (Tuesday, January 17, 2023) when commenting on the visit by Australian Prime Minister, Hon. Anthony Albanese, last Thursday (January 12, 2023) and Friday (January 13, 2023). “We do not want the moment of the visit of PM Albanese to be wasted,” PM Marape said. “There have been many bilateral meetings and visits, but this one was historic, in that he also addressed our Parliament. “Australia is committed to addressing all the outstanding issues with us. I have already written a letter to PM Albanese thanking his for the visit and the issues that he raised. “If you listened to his speech, he talked about increasing the trade relationships between our two countries, including in agriculture and food production. PM Albanese also talked about increased people-to-people relationships, addressing visa issues, exchange programmes between our police and military, public service, interventions in health and infrastructure, among others. “This visit was not about requesting money. We never requested any money from Australia or did they make a commitment to help us with money. “This visit was all about the outstanding bilaterals we have with them. We want to finetune and improve this relationship to one that will anchor Australia and PNG going forward. “Our upcoming meeting between Australia and PNG Ministers in February will consolidate this and move things forward. We want to achieve results and do not want this to be another round of wasted bilateral visits.” PM Marape added: “The relationship between our two countries is no ordinary relationship. “Australia and PNG have a strong foundational relationship from our colonial shared history up to today.” In Parliament recently, PM Marape thanked all MPs for allowing PM Albanese to address Parliament last Thursday. He said he would present a full report on PM Albanese’s visit later to Parliament. “I thank everyone for allowing the guest of our country, Australian Prime Minister Hon. Anthony Albanese, to have a presence in our Parliament and address our people,” PM Marape said. “A big thank you to all MPs, from the Speaker down, for allowing him to be in our Parliament last Thursday. “On Friday, he visited Wewak where he paid his respect to the late Grand Chief Sir Michael Thomas Somare, as well as visited one or two other places. “We had an official farewell and sendoff in Wewak, and he made a transition out of Port Moresby (back to Australia).”
PNG Business News - January 17, 2023
Minister Maru Welcomes Australian Government’s Commitment to Work with PNG on SEZs
Photo credit: International Trade and Investment Ministry of Papua New Guinea Minister for International Trade and Investment, Hon. Richard Maru welcomed Australian Government’s Commitment to work with Papua New Guinea on the development of Special Economic Zones (SEZs). Minister Maru in his meeting today with the Australian High Commissioner to PNG, His Excellency Jon Philp said that he wanted to particularly work with the Australian Government and investors in the Manus Special Economic Region and the Western Province SEZ. Minister Maru also said that he wanted to work with the Australian Government and investors to look into the development of feed industry, cotton industry, cattle industry and the chicken industry of PNG. “We need to have more competition across all industries and new industries to replace imports, create jobs and create wealth for our citizens. I am committed to assist Australian investors to take care of issues like the land issues if they are keen to invest in these industries that are of great importance to PNG,” said Minister Maru. Minister Maru also requested the Australian Government to help PNG fund the development of hybrid electricity systems, especially solar farms, mainly at areas that were using expensive diesel generators, especially in provinces like Manus, New Ireland and East and West Sepik Provinces. “We cannot attract investors and grow and develop our economy without cheap and reliable energy. Apart from law and order, cheap and reliable energy is key to economic growth,” said Minister Maru. Minister Maru also added that Carbon Credit was one of the areas that Australia could help PNG with. “This can be our next biggest industry with the world heading towards total decarbonization by 2050,” said Minister Maru.
PNG Business News - January 16, 2023
Mining Act of 1992 to Undergo Adjustments to Address Alluvial Mining and Exploration Activities
Photo: Minister for Mining Ano Pala The Mining Act of 1992 is set to undergo adjustments to address sensitive areas and unclear areas such as alluvial mining and exploration activities. This was announced by Minister for Mining, Ano Pala, in response to questions raised by Member for Bulolo, Sam Basil Jr, in Parliament. Mr. Basil highlighted the need to amend the Mining Act of 1992, particularly with regards to protecting landowners' rights, especially in relation to alluvial mining. He asked, "If the Mining Department has not started work to amend the Mining Act 1992, does the Mining Department have any plans to push for an Alluvial Mining Act, one which will protect landowners rights over other citizens?” Minister Pala reassured that the Mining Department has already made appropriate changes to the law to safeguard landowners. Under the current law, only landowners are permitted to operate alluvial gold mines. However, he acknowledged that there are instances where exploration licenses are issued for land where alluvial operations are taking place. He stated, "That is the area that we need to sort out. We are in the process of introducing a Mining Amendment Act to address the sensitive areas or unclear areas like alluvial mining and exploration activities.” This announcement is a positive step towards addressing the concerns of landowners and ensuring that their rights are protected. The proposed Mining Amendment Act will provide clarity and certainty for all stakeholders involved in the mining industry. It is important to note that mineral resources are a vital component of a country's economy, and their extraction and utilization should be carried out in a sustainable manner that takes into account the rights and well-being of all affected parties.
PNG Business News - January 16, 2023
Australia and Papua New Guinea Look to Boost Two-Way Trade
Photo credit: Papua New Guinea's Prime Minister James Marape and his Australian counterpart Anthony Albanese Australia's Prime Minister Anthony Albanese has announced plans to increase two-way trade with Papua New Guinea (PNG) in areas such as coffee, cocoa, fisheries, and tourism. In a speech to Parliament, Albanese stated that the Australian and PNG governments should work together to "unlock a new generation of prosperity" and build on the current $24 billion of direct investment from the Australian private sector in PNG. Albanese acknowledged that PNG is looking to expand its exports of more processed goods and varied agricultural products, and sees this as an area where the Australian business community can play a key role. He also stated that the Australian government is willing to assist PNG in improving its bio-security measures to allow for greater exports of processed goods and agricultural products. Furthermore, the Prime Minister sees opportunities for PNG to expand its green economy, and that Australian companies are interested in exploring opportunities in this area, including in hydro and hydrogen production. He said "I know a number of Australian companies are keen to explore what can be done in this area, including in hydro and hydrogen production, for example. Together, I am confident we can ensure that the rich natural resources of PNG are made to deliver good jobs, lasting investment and sustainable development for your nation." PNG Prime Minister James Marape, in response, emphasized the importance of stronger economic ties to ensure a safer Indo-Pacific region. He said "Our focus on ramping up trade, free flow of exports and our people to Australia will be a main issue of discussion with the Australian leadership we are so privileged to have today. This is not just a social conversation, it is deep economic strategy of our nation." This announcement highlights the potential for increased collaboration between Australia and PNG in various sectors, and the willingness of both governments to work towards a prosperous and sustainable future for both nations. The focus on expanding trade and investment in agriculture, bio-security, and green economy are promising steps towards achieving this goal.
Paul Oeka - January 13, 2023
Barrick Niugini Limited Clarifies its stance on Porgera's current progress
Photo: Barrick CEO and President Mark Bristow addressing PJV Town Hall meeting at Porgera Mine site during a quaterly visit in 2022 Barrick Niugini Limited (BNL) has clarified in a media statement that the Porgera Mine remains and is progressing in a care and maintenance mode of operation and that the current defined rehiring process of the skilled workforce is only to assist with ongoing maintenance work carried out in the mine. A protest was held in Porgera on Friday (6th January) claiming that Barrick's current recruitment process was improperly overlooking unemployed locals within the Special Mining Lease area. Barrick Niugini Limited has completely opposed these claims. Since the closure of the mine, Porgera was placed into care and maintenance operations in April 2020, BNL has invested more than K1 billion in maintaining its integrity in the hope and expectation that the various structural and regulatory conditions for its reopening can be satisfied to allow for its reopening. While these conditions have not yet been satisfied, BNL has approved limited maintenance work on plant infrastructure and the repairing of mobile equipment, with rehabilitation work on the open pit and underground sections of the mine. The ongoing maintenance at the mining site requires highly skilled and experienced work personnel to ensure that operational readiness is maintained, the company said in a statement. “BNLs recruitment policy is based on transparency and best practice and gives first preference to skilled and experienced workers with the best-recorded performances who are based in Porgera,” it said. Due to a limited pool of local workers that need the necessary requirements for the current ongoing work, Barrick highlighted that they had to rehire a small number of skilled workers from beyond Porgera and within Enga and PNG. Most of these workers are on short-term contracts. BNL claims that certain individuals have been creating false exploitations of employment by unskilled youth in Porgera and spreading baseless claims and rumours of inappropriate hiring practices by the company. “The current maintenance work at the Porgera Mine, however, requires specific skill sets so that safety and other important requirement are properly compiled. As with any other professional organisation, BNL has stated and made a firm stance that it would not recruit a person with unsatisfactory employment or community history,” it said. Once the mine restarts the new Porgera will commence the “historically successful” job-ready programme for the benefit of youths in Porgera, the company added. Job Ready Program provides the best avenue for inexperienced local youth to enter the mining workforce and has produced skilled miners who are now employed at Porgera as well as other mines in PNG and abroad. It is also the responsibility of local leaders to work with the Government and other stakeholders to invest in training and other opportunities for the youths in Porgera. BNL has made its stance clear that any threat to the Porgera mine assets or employees and contractors will be immediately referred to the relevant authorities.