PNG Signs Agreement with Fortescue Metals Group
by PNG Business News - August 11, 2021
Photo Credit: PNG Buzz / Papua New Guinea's State Enterprises Minister, Sasindran Muthuvel (left), Prime Minister James Marape (centre) and the chairman of Fortescue Metals Group of Australia, Andrew Forrest, sign an agreement in Port Moresby back in September 2020.
The Government of Papua New Guinea has signed a landmark agreement with one of the world's biggest companies to venture into 'green energy' in a partnership that is likely to revolutionise power generation and supply in the near future.
In another bold move to "Take Back PNG", the Government today signed the 'Deed of Agreement' with Australian company Fortescue Metals Group (FMG), the world's fourth largest producer of iron ore.
The instrument was signed by the Minister for State Enterprises Hon. William Duma and Founder/Owner of FMG Dr. Andrew Forrest; and witnessed and co-signed by Prime Minister Hon. James Marape and Fortescue Future Industries CEO Julie Suttleworth.
Prime Minister Marape called the signing "historic" as it paves the way for FMG through its industry company Fortescue Future Industries (FFI) and PNGFFI to explore and later look into developing renewable energy sources that will cover hydro, solar, wind and geothermal power.
He said this was the "most appropriate and relevant way to go" as the world moves toward green energy and tries to cut down its carbon footprint.
PM Marape added his Pangu-led government was keen on generating clean energy utilizing the country's natural resources - solar, wind, gas and geothermal hot springs.
FMG Owner Dr. Forrest is the second richest man in Australia with a net worth of A$27.25billion, according to the Australian Financial Review.
PM Marape thanked Dr. Forrest for his "personal choice" to invest in PNG in this frontier sector, calling him "a friend of PNG closer to home".
Through a virtual video link, Dr. Forrest explained his personal affinity to PNG in that he had lost an uncle in PNG during World War II, one other reason he has chosen to invest in the country.
Already the investor is eyeing sites in Gulf and West New Britian provinces to investigate and study hydropower and geothermal potentials respectively as it continues to explore other sites in PNG, especially geothermal, hydro and solar.
PM Marape said Dr. Forrest had revealed during one of their earlier meetings that his company is able to produce over 25 gigawatts (250 billion watts) of power from PNG in renewable 'green hydrogen and green ammonia' energy - sufficient for both domestic use and export to overseas markets.
The partnership is frontier-breaking and adds great value to the work the Marape Government is doing nationally in managing the country's natural resources better, and in the region and globally in reducing the impact of climate change through more environmentally-conscious projects.
With the recent set up of the National Energy Authority, such projects would be better streamlined and properly operated through the Ministry of Energy, the Prime Minister said.
PM Marape then invited Dr. Forrest to join him to advocate on green energy at the United Nations conference on climate change, COP26, later in the year.
The signing now allows the company to begin work on acquiring relevant licences to progress work.
Minister Duma said a timeframe of no more than three years was being looked at before the first project could be operated.
Today's signing event was spearheaded by the Ministry of State Enterprises and its body, Kumul Consolidated Holdings. It was witnessed by government representatives from relevant departments and state bodies.
Article Courtesy of the Department of Prime Minister & National Executive Council
PNG Business News - February 28, 2022
PM Marape thanks Warangoi landowners
Landowners in Warangoi, Pomio, East New Britain, have been informed that they would be paid K5 million for the use of their land and water for the Warangoi Hydro Power Project by James Marape. In Parliament, he provided this guarantee to Pomio MP, Hon. Elias Kapavore, who had inquired about the payment schedule. PM Marape promised landowners that they would be compensated the K5 million they requested for the usage of their land and water when he opened the K83 million 10 Megawatt Warangoi PNG Power Ltd (PPL) Hydro Power Project Major Rehabilitation Project in November. He praised landowners in Parliament today for enabling East New Britain to utilize their land and water for 30 years to produce power. PM Marape stated that he had discussed the matter further with the Minister of State-Owned Enterprises, Hon. It was in the KCH Work Plan for 2022, and it was written by William Duma and Kumul Consolidated Holdings (KCH). “That K5 million commitment is part of that work plan,” he said. “We could not find the money last year as it was not factored into the work plan, but based on that commitment, we came back and I am happy to announce that the K5 million is captured in this year’s work plan. “Within this month, or next month, the minister responsible (Duma), the KCH team and PNG Power will inform your (Pomio) team and they will do an official handover of that K5 million.” PM Marape commended the Warangoi landowners for their patience for more than 30 years. “They’ve shown goodwill to allow Warangoi Hydro to be functional and it is only fair that we honour them ASAP,” he said. Reference: PM James Marape News Page (23 February 2022). “PM Marape thanks Warangoi landowners”.
PNG Business News - May 04, 2021
Australia Supports Electrification for PNG
The Australian government has decided to contribute $US90 million (K315 million) to the Marape government's top-priority Edevu Transmission and Electrification program. The Edevu hydropower plant, which is based in Sogeri, is part of the Papua New Guinea Electrification Partnership, which seeks to reach 70 per cent electrification across the country by 2030 with the support of Australia, the United States, New Zealand, and Japan. Treasurer Ian Ling-Stuckey praised the announcement, calling it a major step forward for the Marape government's electrification efforts. “With only 13 per cent of the nation connected to power, this is a very important and ambitious project,” he said. “We know that the original announcement was made at the APEC meeting. This was a good announcement. But it is one thing to make big announcements and cut ribbons. “Support from our international friends and allies is critical, and I am grateful that Australia, through the Australian Infrastructure Financing Facility for the Pacific, is coming to the party.” Ling-Stuckey stated that the discovery would be on favourable terms, with a $US18 million grant portion (K65 million). The money will be on-loaned to PNG Power Ltd, pending NEC clearance. The Edevu project would have the required infrastructure to link modern hydropower generation to the Port Moresby Grid, allowing diesel generation to be replaced at a lower cost and with less environmental impact. It will also allow for the upgrade of substations to improve grid stability. PPL will now be able to purchase and mount smart meters in consumer premises as part of the funding. Taxes, duties, levies, and fees on supplies, utilities, and facilities available for the project would be exempted as part of the Marape government's contribution.
PNG Business News - April 29, 2021
Parliament Passes Energy Bill
The National Energy Authority Bill, 2020 was passed by the National Parliament with an overwhelming majority of 73 to 0. The National Energy Authority Bill was created to control renewable and non-renewable energy production, storage, delivery, and retailing. The Act will also cover the following functions: Governing the oil market by overseeing the implementation and implementation of rules, legislation, and policies. Levies, fines, tariffs, and other charges are received and collected. Responsibilities for energy research and development in order to put energy policy and legislation into practice The aim of the Act Administer the National Electrification System is to approve the corporate policies of subsidiary corporations and affiliates Administrate the National Electrification Trust Funds The Bill for an Act to Reform the Electricity Industry Act 2020 was also passed. The National Energy Authority 2020 and the Electricity Industry Act Amendment Bill 2020, according to Minister for Energy and Rural Infrastructure Saki Soloma, are the culmination of the work undertaken so far in restructuring the energy market. He said that the passed Act of Parliament would create energy and electricity industry legislation for the energy sector in general. According to him, the National Energy Authority Bill 2020 establishes a robust and equitable legislative framework, with fines imposed on those that violate the Act and regulations. He went on to say that the Electricity Industry Act (Amendment Bill) contained consequential changes to the Electricity Industry Act, allowing the National Energy Authority Act, which was passed by Parliament, to go into effect right away. The National Energy Authority Bill 2020 is based on the same model used for the establishment of stationary authorities such as the National Fisheries Authority, National Information and Communication Technology Authority, and others, according to the explanatory notice. It specifies that the National Energy Authority is a policy and regulatory agency, not a commercial institution, as stated in the Act. PNG Power Limited will no longer be an economic or technological authority and the NEA will conduct the licensing and technical functions that were formerly handled by PNG Power Limited.
PNG Business News - February 05, 2023
PNG Tourism Promotions Authority (TPA) and Bougainville TPA signs MOU
The Department of Commerce, Trade and Industry reached another milestone recently when it signed a Memorandum of Understanding (MoU) with the Papua New Guinea (PNG) Tourism and Promotions Authority (TPA). The MOU paves the way forward for both parties to continue bilateral partnership based on the understanding of tourism and promotions in Bougainville. The MOU was signed by the PNG TPA and the ABG Department of Commerce, Trade and Industry on the understanding relating to a joint partnership for the protection and preservation of tangible and intangible culture, development and promotion of tourism, contemporary culture and the arts and sustainable tourism in the autonomous region of Bougainville. ABG Vice President and Minister for Commerce Trade and Industry, Hon. Patrick Nisira (MHR) acknowledged the PNGTPA for its tremendous support so far since the first MoU was signed in 2016. The support has cemented many agreements already signed and has proven that Bougainville is truly a tourism destination that is worth investing time and money on. Mr. Nisira acknowledged the PNG TPA officers for their continuous negotiation with the Bougainville partners in pushing for significant income generating programmes to proceed in the region. “Standing here today it gives me great pleasure to witness and participate in this significant event that will go down in history books of this nation to be. We are here today to mark this important event on the signing of the MOU between my ministry and the department of national government and PNG Tourism Promotions Authority (PNG TPA).” This agreement adds value to our collective vision, ideas and consultations that the local tourism and cultural practitioners in both government and private sectors, he said. “As a way forward the agreement presents a realistic and workable approach to tourism development and its sustainability in the region.” “The MOU also sets out a framework for future development for tourism emphasizing on effective and determined and holistic approaches.” He said that the agreement generally outlines the pros and cons of tourism development in Bougainville and the framework and strategy of reaching the targeted goals and vision earmarked to reaching the overarching goals of economic building and development. Deputy Chief Secretary for Operations Anthony Koiri approved and signed the MOU on behalf of the Bougainville Public Service Chief Secretary who is on sick leave at the moment. The signing was witnessed by the staff of the PNG Tourism Promotions Authority (PNGTPA), Department of Commerce, Trade and Industry, senior officers and a small crowd at the Bel Isi park.
PNG Business News - February 05, 2023
PNGEITI POSITION ON PORGERA MINE LEGACY TAX ISSUES
The PNGEITI Head of Secretariat Mr. Lucas Alkan says all parties to the Pogera Mine must adhere to rules governing the extractive industry, particularly when dealing with fiscal matters that must be administered and observed according to law. His comments follow a news article on The National citing the Internal Revenue Commission (IRC) that unmet tax obligations of the Pogera mine stood in the way to expedite the mine re-opening process. Mr. Alkan says a workable and timely strategy that does not impinge on basic laws is a way forward. Below is the full comment on this issue. “The Papua New Guinea Extractive Industries Transparency Initiative (PNGEITI) commends The National newspaper for attempting to bring to light what appears to be the final outstanding issue (among others) in the Porgera Mine recommencement negotiations (more on this in footnote). We’ve noted from the reporting that taxation matters are legacy issues that appear to be standing in the way for the multi-million-kina Porgera Gold Mine to re-open. We have observed that the Government was on track to conclude negotiations and re-open the Mine by June last year, however this did not eventuate as anticipated. Attempts to reopening the Mine in the second half of last year was not feasible due to the national general elections and the formation of government. It appeared that all negotiations were concluded and a new Porgera Mining Agreement Framework was in place for the Mine to be re-opened in the first quarter of this year. Surprisingly, we learn that an old Porgera Tax liability dispute is standing in the way for the Mine to be re-opened. The early recommencement of the Mine, preferably within the first quarter of this year is critical for the country as the lead time required for mobilizing resources and the significant start-up capital needed to get the mine back into its full operating capacity would be a significant challenge. On this, we are aware there are also discussions going on with the developer and the government as to who is going to meet the startup cost but we understand Barrick Niugini Limited might meet the full cost of starting up the Mine and government would refund later but unsure as to whether this understanding has been reached or not yet. With regards to the current standoff, the EITI based on its global best practice principles is of the view that the existing law governing taxation matters must dictate or take precedence over any political intervention. We do not know the specifics of the on-going tax matter but understand that it is related to a tax dispute concerning the ‘old Porgera Mine’. If it is a significant amount of tax owed by Barrick to the Government based IRC’s audit in 2013 then it is a legal tax obligation that Barrick and its joint venture partners need to settle as required by law. We fail to understand as to why the old Porgera tax obligation/liability clause was inserted into the new Porgera Mining Framework Agreement making it a condition to resolve this legacy tax issue before reopening the Mine. If whatever was reported and commented by PM Marape recently is true then Barrick Niugini Limited and the State need to speed up the negotiation process and resolve this dispute immediately. Both parties should exercise good faith – Barrick Niugini Limited should not pull strings on this old Porgera tax liability matter and delay the re-opening of the Mine. It is understood the State (IRC) may not easily forego if there is a substantial amount of tax liability to be paid by the operator. Whatever the parties decide to do, they should resolve the tax liability issue through the due process of law but allow the Mine to re-open immediately under the New Porgera Framework Agreement. Political intervention is not recommended to resolve this dispute as this can undermine investor confidence, set bad precedence for the Government and create an uneven playing field for project developers. Barrack Niugini Limited should not put undue pressure on the State to resolve this matter politically in order to re-open the mine as it is not a best business practice. All stakeholders and the citizens have the right to know the specific issues or the nature of this tax liability issue between Barrick Niugini Limited (BNL) and the Internal Revenue Commission (IRC) as the continued delay in re-opening the Mine continues to have negative consequences on the economy. The prolonged delay has not only resulted in significant revenue loss to the Government (including the provincial and local level governments in the impacted resource area) but also loss of employment, business opportunities and spin-off benefits to the landowners and the wider communities. The shutting down of the Mine 3 years ago has had significant negative consequences on the economy including the current foreign exchange shortage that has constrained business operations in the other sectors of the economy. Porgera Mine had been a good source of foreign exchange inflows and its continued shutdown will definitely not going to contribute to the 4% economic growth (that was largely to be driven by the extractive sector) projected for by the World Bank for last year and the real GDP growth of 4% projected for this year in the 2023 National Budget. PNGEITI commends the transparent negotiation process to date that took substantial amount of time and effort to ensure the interests of all parties were reflected in those agreements. We encourage all parties to continue to respect and observe the laws of the land in this dispute resolution process to address the tax liability issue. We believe that a win-win situation for both parties (Government and Barrick) is to re-open the mine first and work together to resolve the outstanding tax liability dispute later going forward.
PNG Business News - February 02, 2023
Weir Minerals releases the 6th edition of the Warman® Slurry Pumping Handbook, the definitive resource for slurry pumps
Photo: The Warman Slurry Pumping Handbook is the definitive guide for most slurry pumping applications. Weir Minerals, manufacturer of the industry-leading Warman® slurry pump, has released the latest edition of their coveted Warman® Slurry Pumping Handbook. The 6th edition, compiled by the most trusted name in slurry pumps, features detailed engineering data required for most slurry pumping applications. Drawing on decades of Weir Minerals’ inhouse expertise in innovative engineering and slurry pumping technology, the new handbook has updated reference material based on new learnings, improved understanding and technological developments within the mining industry. With customers always in mind, the handbook aims to empower engineers to achieve optimal performance from their Warman® slurry pumps. An increased global focus on the environment, energy consumption and water conservation will influence slurry pump design and considerations – making this latest handbook an essential tool for all current and future pump engineers. “Pumping slurry has many challenges and I’m excited to publish our latest handbook, packed with fundamental theory, application advice, standard practices and latest Warman learnings from the field; all aimed to help our customers, present and future, deliver with excellence.” Marcus Lane, Director, Slurry Pumping Technology Group Weir Minerals are continually striving to shape the next generation of smart, efficient and sustainable solutions with cutting-edge science and innovation. The comprehensive handbook includes over 140 pages of detailed information, including performance charts, impeller design, part configuration, assembly and slurry considerations – fully supported by accurate technical renders and specifications. “The high quality of the reference material in this essential resource reflects the leading status of the Warman slurry pumps. As the industry leader, we have a responsibility to develop our future engineers; we will make the latest version of the Warman Slurry Pumping Handbook available not only to our customers, but also to the leading schools worldwide, so they can learn from the best in the industry.” John McNulty, Vice President Global Engineering & Technology. As part of Weir Minerals’ commitment to investing in STEM education and developing the next generation of engineers, copies of this essential resource will be gifted to the leading mining and engineering educational facilities around the world, including the winner of the 2022 Warman Design & Build competition, Deakin University in Australia.