PNG Kina Continues to Fall Against US Dollar

by PNG Business News - May 10, 2021

The PNG Kina is expected to continue falling against the US dollar.

The Kina traded steady in the first quarter of 2021, according to the BSP's Pacific and Economic Market Insight survey, thus depreciating 2.4 per cent year on year against the US dollar, from 0.2920 to 0.2850.

Rohan George, BSP Group General Manager – Treasury, said, “The US Dollar rallied against most currencies, as higher than expected economic and employment growth created inflationary concerns and fueled speculation that the US Federal Reserve would tighten monetary policy earlier than markets had initially expected.”

Business liquidity dwindled in the first quarter of 2021, with market volatility down 8.3% in March and 5.2 per cent for the quarter.

Despite strengthening signs in the global economy, George predicted that foreign exchange market turnover would remain sluggish in April and May, with decreased foreign exchange inflows in April.

This follows the two-week closing of the OTML COVID-19 phase alignment and Barrick's lack of foreign currency supply to the industry.

He predicts an uptick in half-yearly and end-of-quarter flows next month, as well as a reduction in pending foreign exchange order bottleneck problems.

“To manage reduced FX liquidity, businesses should place FX orders (with correct paperwork), as soon as possible, ensuring orders are cash-backed while awaiting execution, and that tax clearance certificates are current and reflect the expected FX order execution time.”

BSP Group CEO Robin Fleming agreed, saying, “The Government’s commitment to recommission operations of Porgera mine is a positive move that will also bring foreign exchange into the country and boost local and domestic economic activity.”



Related Articles

Company

PNG Business News - March 18, 2021

Kina Bank supports KTF education program for second year

Kina Bank has pledged support for the second consecutive year to the FODE education program administered by the Kokoda Track Foundation at the Motu Koita FODE centre in Port Moresby. The bank is funding the FODE program and providing mentoring by bank staff to students enrolled at the centre. The one-on-one mentoring program offers students the opportunity to connect with young and seasoned professionals across the bank who provide coaching, and help with their studies, assessments and to prepare for exams. Building on the success of last year, students have direct personal access to a mentor who can guide them on their path to success and help them reach their goals. "Our partnership with Kina Bank is that in every sense of the word. From vital financial support, to their innovative volunteer mentoring program and all of the 'small' ways they assist our work in between, we are proud to partner with Kina Bank and are delighted to continue developing our partnership this year," said KTF CEO, Dr Genevieve Nelson. "In these challenging times, we are poised to deliver a full year of learning to our students, committed to the safety of our students and staff. We are fortunate to have an incredible partner like Kina Bank by our side on this education journey." Kokoda Track Foundation reported to have enrolled 150, an increase in numbers from 2020. “Continuing the partnership with the Foundation for Motu Koita FODE was an easy decision for us, building further on the success of the previous year and to see through some of the students in grades 10 and 11 mentored last year,” said Greg Pawson Kina Bank Chief Executive Officer. “The bank is committed to helping create the workforce of the future by supporting the learning and development of young people in Papua New Guinea. Initiatives such as the Motu Koita FODE program gives a second chance to young people to attain high school certification and progress to higher education and eventually transition into employment with skills and qualifications. At Kina Bank we’re committed to supporting our communities.”

Business

PNG Business News - March 29, 2021

ICCC Evaluating Kina Banks Acquisition of Westpac

Kina Securities Ltd (KSL) has sent an application to the Independent Consumer Competition Commission (ICCC) for approval of its proposed acquisition of Westpac's Pacific company. Through the authorisation process, ICCC will determine the acquisition's competition consequences and public gains, according to Commissioner and Chief Executive Officer Paulus Ain. This will be achieved by a public review process in which the ICCC will accept comments from stakeholders and the general public before reaching a definitive judgment about whether or not to approve the acquisition under the ICCC Act. “The process that ICCC will conduct is very transparent and it is very important for the people of this country, especially from the finance and banking sector, to get themselves involved,” Ain said. “The process has now started and we are formally inviting the people in the finance and banking sector, other commentators, interested parties and the public to the process on assessment. We are looking forward to seeing a lot of submissions come in and this process starts effectively today (Friday).” KSL is awaiting ICCC approval to purchase 89.91 per cent of Westpac PNG Ltd. The proposed acquisition has reached the threshold needed under section 81 of the ICCC Act for mandatory notification and obtaining ICCC approval to continue with the acquisition, according to the ICCC. The authorisation process, according to Ain, has no bearing on the ICCC's decision on who buys. “This is something that ICCC does not or is not required by law to do this,” he said. “It’s outside of the ICCC’s role.”

Company

PNG Business News - March 16, 2021

KAML Makes A Profit of K3.3 Million

  The Kina Asset Management Ltd (KAML) made a net profit of K3.32 million for the year ended December 31, 2020, thanks to a 6.2 per cent investment return. The achievement was made amid the Covid-19 pandemic and continuing geopolitical conflicts, according to KAML chairman Sir Rabbie Namaliu. Sir Rabbie praised KAML's investment strategy's diversification for providing a substantial measure of stability in a tumultuous year. He said, “Asset allocation was maintained close to the preferred portfolio asset weights of 40 per cent domestic/60 per cent international, the latter being held in Australian stocks and global indexed funds. For KAML, this meant overall capital losses were more than offset by dividend and interest income and strong foreign exchange gains. Bank of South Pacific, KAML’s core domestic shareholding, comprising nearly 20 per cent of the portfolio, generated a return of 13.3m per cent for the year. Credit Corporation also performed strongly.” Sir Rabbie, on the other hand, reported that Oil Quest and Kina Securities had experienced major reversals. “Oil Search, badly affected by the pandemic-related fall in the global demand for oil, reported a negative return for the fund of -39.6 per cent,” he said. “Offshore, the recovery in Australia was less strong than in other markets, notably the United States. The year ended with modest overall capital losses on the Australian component of the portfolio, but the strength of the Australian dollar and a series of gradual reductions in the PGK/USD trading band by the Bank of PNG, more than offset this.” Sir Rabbie reported that the net tangible asset backing per share was K1.59 as of December 31. “However, KAML’s price of K0.90 per share represented a substantial discount to the underlying value of the company,” he said. 


Recent Articles

Mining

PNG Business News - September 16, 2021

Engaging the global crowd to design the electric mine of the future

Today, the Electric Mine Consortium (EMC) launched the ‘Electric Mine Simulation’ crowd challenge in partnership with the OZ Minerals Think & Act Differently ideas incubator and Unearthed. OZ Minerals, IGO, South 32, Blackstone Minerals, Evolution Mining, Barminco and Goldfields have committed to significantly reducing their carbon footprint. These seven mining companies along with a number of partner companies, have come together to form the Electric Mine Consortium, a collaborative group seeking to accelerate progress towards a fully electrified zero carbon and zero particulates mine.  Electrification of mine sites is a critical step change needed for the mining industry to achieve a zero carbon future. Switching to electric and renewable energy represents a transformational shift that will change the way mines are designed. This challenge is about using simulation to understand the impacts of electrification on mine design and through this challenge the EMC is looking to find innovators that can help do this.  The eight-week online challenge invites companies and individuals from around the world to propose an approach to designing an open architecture, mine design simulation platform that can initially be used to compare a fully electric underground mine with its traditional diesel powered equivalent. Brett Triffett, Transformation Technologist, from OZ Minerals explained, “there is a great opportunity to use whole-of-mine simulations that integrate all of the dependent systems so we can understand the holistic value in transitioning from diesel to electric solutions in underground mines.  We would like to be able to quickly build and test different mine designs and compare things like productivity, costs, emissions and energy requirements. We think that eventually this capability could be expanded to include the entire mining value chain. We have invited the crowd to propose solutions because we are not currently aware of a platform that meets this brief.  What we have learned from running previous crowd challenges is that there are often people from outside our industry who have ideas or technology that can be applied to mining. These people are often unknown to us and in many cases they are unfamiliar with our industry.  By participating in a crowd challenge, innovators can access a new market and be supported in developing new products and business models.”. A selected cohort from from this challenge will join the Think & Act Differently incubator and be supported in developing a demonstration of their solution.  The incubator program is a supportive environment that includes; funding, mentoring, opportunities for collaboration, capability uplift and exposure to mining data and mining operations from across the EMC members.

Company

PNG Business News - September 15, 2021

Weir Minerals strengthens its partnership with international technology group, Andritz

Weir Minerals and Andritz have signed an agreement at MINExpo 2021 expanding their shared commitment and strategic cooperation to supply equipment for processing tailings in the mining industry. The foundations of this agreement have been built on a shared understanding and vision to enable the sustainable and efficient delivery of the natural resources essential to create a better future for the world. Since 2018, Weir Minerals’ and Andritz’s partnership has seen them collaborate on joint tailings projects. This shared history as partners – a collaboration made stronger by the quality of individuals on both teams – has reinforced their abiding belief that together, both Weir Minerals and Andritz are stronger. This shared success has led both Weir Minerals and Andritz to renew their on-going commitment and announce they’ll be expanding their offer to all regions around the globe.   Utilising Andritz’s proven separation and dewatering technologies, Weir Minerals has strengthened its whole-of-mine capabilities, showcasing market-leading products from extraction to comminution, mill circuit and tailings management. ‘Weir Minerals has been providing tailings solutions for decades; we have dedicated research facilities – the Weir Technical Centre in Melbourne, Australia and the Sustainable Mining Centre in Venlo, Netherlands – that are challenging conventional ways of thinking about tailings, while also developing practical, innovative and sustainable solutions that will reduce operating costs and improve safety,’ Ricardo Garib, Weir Minerals Division President said. ‘Decreasing ore grades mean that mines are producing more tailings than ever before. One of the challenges with tailings management is that there cannot be a one-size-fits-all approach; each mine requires a tailored solution that carefully considers the minerals being processed, as well as the site’s climatic and geological conditions. Weir Minerals prides itself on having both the expertise and equipment that allows us to partner with miners everywhere to plan and implement tailings solutions based on their operations’ unique challenges and this agreement with Andritz enhances those capabilities,’ he said. ‘Andritz has a long history working across a range of different industries. We are very proud of the work we’ve done with Weir Minerals; together, we’re excited about continuing to provide a joint offering of sustainable and value-added tailings solutions. Both companies bring a different expertise and know-how to the partnership; we complement one another and ultimately it’s our customers who’ll benefit,’ Steve Huff, President Andritz Separation said. Tailings management forms an important element of Weir Minerals’ broader integrated solutions approach, which considers problems and challenges from all perspective and draws on a range of experts – process engineers, design engineers, product experts and materials scientists, among others – to identify potential challenges and opportunities and provide tailored solutions. ‘This latest agreement enhances our overall tailings offering and enables us to provide our customers with a complete tailings solution. Under the brand name IsoDry, we will continue to offer customers a range of mechanical separation technologies, such as thickeners, filter presses, centrifuges, and vacuum belt filters,’ Charlie Stone, Weir Minerals VP Sales and Business Development-Mill Circuit said. Weir Minerals has strengthened its tailings team to support the market and ensure that it can provide innovative solutions based on each customer’s specific requirements. The agreement provides the opportunity for potential future collaboration on technology, harnessing Andritz’s market-leading separation technology in conjunction with Weir Minerals’ minerals and tailings processing technology. Many of these products – Warman® pumps to transport fluid tailings, GEHO® pumps to handle paste, Cavex® hydrocyclones to dewater tailings and the Multiflo® range of dewatering solutions – have been integral to helping miners manage their waste for generations. Weir Minerals and Andritz have also reiterated their shared commitment to sustainability; it is an essential part of both their business and corporate strategies. Both companies have outlined ambitious plans to reduce their carbon emissions, while their approach to ESG initiatives extends to all aspects of their organisations.  ‘Shareholders and stakeholders are rightfully demanding more sustainable mining practices and tailings management is an area where there’s a lot of scope for improvement. Weir Minerals wants to play a central role in changing how the industry thinks about and manages tailings. Ultimately, we believe that sustainable solutions are not only environmentally beneficial, but also reduce operating costs and minimise risk,’ David Almond, Weir Minerals Global Director, Product Management Process said.  ‘Weir strives to make our customers more sustainable and efficient; it’s core to our purpose and at the heart of what we do. We believe that embedding sustainability throughout our organisation protects and creates long-term value for our stakeholders and secures the long-term future of Weir. Our approach to tailings management is an extension of our broader corporate strategy. There is scope to make long-lasting, impactful change in how the mining sector thinks about and manages tailings and Weir is proud to be one of the industry leaders,’ Jon Stanton, Weir Group Chief Executive said. 

Business

PNG Business News - September 15, 2021

STAKEHOLDERS VIEWS CRITICAL FOR BETTER RESOURCE GOVERNANCE: ALKAN

Head of the PNGEITI Mr Lucas Alkan last week in Wabag at the opening of the consultation. The Head of the PNG Extractive Industries Transparency Initiative (EITI) Mr. Lucas Alkan has issued a strong challenge to stakeholders in the extractive industries to embrace and promote the work of EITI in Papua New Guinea to derive best value from the industry. Mr. Alkan spoke of this last week in Wabag when he opened the upper highlands regional consultation on a proposed law to transition the PNGEITI into a statutory authority.  “PNG EITI is a government driven initiative to promote transparency and accountability in the PNG mining and petroleum space which has been driving the PNG economy for a sustained period of time. “But there is this misconception about proceeds from mining and petroleum activities not being translated well into development on the ground and this sentiment is shared by many at both the provincial and national level. “What PNGEITI is doing is to shed light on the leakages on revenues and proceeds from the mining and petroleum activities with the ultimate aim of improving governance in the mining and petroleum sectors using international best practice standards to see the desired development outcome from this important sector. “Seven years into PNGEITI implementation in PNG, we’ve now seen the need to make the PNGEITI administrative body, the PNGEITI into a statutory body to see more improvement in the EITI reports to enhance good governance in the sector to derive the best development outcome.   “We’ve covered two regions; the New Guinea Islands and Momase regions and we are now conducting consultations in Enga and Eastern Highalnds to cover the big highlands region. “I encourage the best knowledge and views from all stakeholders from the stakeholders in these consultations so that we give birth to a law that truly reflects the genuine views of all stakeholders for better development outcomes. A State Technical working group comprising the Department of Petroleum, State Solicitor, Internal Revenue Commission, Department of Personnel Management, Department of Treasury, the National Economic Fiscal Commission and Department of Finance were in the Enga capital, Wabag for a four days consultation for the Upper Highlands region” “PNGEITI has been in operations since 2014 effected by a NEC decision and now we are moving into the next step in anchoring this extractive industry reporting process into PNG’s legal and administrative system. PNGEITI published 7 reports detailing activities taking placing inn the PNG mining and petroleum space,” Mr. Alkan said.   Article Courtesy of PNG Extractive Industries Transparency Initiative

Join Papua New Guinea's

Business Community

Be the "First" to get our exclusive Digital Magazine & Weekly Newsletter.