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PNG Business News - June 01, 2021

Kina Bank appoints Chief of Staff, new executive role to drive transformation

Kina Bank is pleased to announce the appointment of Judith Ugava-Taunao as Chief of Staff reporting directly to the Chief Executive Officer. In this new senior leadership role, Judith will take a position on the Executive Committee, demonstrating Kina’s continued commitment to promoting PNG women into leadership roles. Judith joins Kina Bank with a distinguished career, having worked in international development, organisational transformation, and human resource development and leadership. For 18 years she has built a career that spans across international borders and sectors. Prior to joining Kina Bank, Judith was at Oil Search where she served as the Vice President, Change Management Lead and as the General Manager for OSL’s Citizen Development Program. “I am pleased to join the Kina Bank team at a time when the opportunity to introduce new and transformative change in the banking industry is upon us,” said Ms Ugava-Taunao. “It is exciting to consider Kina’s growth over the next five years and the drive to bring improved financial services to Papua New Guineans who want more out of their banks.” In her new role, Judith will be responsible for developing and delivering key strategic, business priorities. The appointment is critical to the success of the business, ensuring the bank delivers on its long-term aspirations. Judith adds significant strength to the executive team. Greg Pawson, Kina Bank’s Chief Executive Officer said: “I am delighted that Judith is joining the Kina Bank team. She has a tremendous amount of knowledge and experience that will benefit the Bank in its transformational journey. Judith’s appointment also demonstrates our continued commitment to promoting women into leadership roles. It’s an exciting time of growth and expansion for us and with Judith’s expertise in business development and change management, we have an exciting future ahead.”

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PNG Business News - May 31, 2021

Ok Tedi Mining Commences COVID-19 Vaccination Roll-Out

Ok Tedi Mining Limited (OTML) launched its COVID-19 Vaccination Roll-out on Friday 21st May in Tabubil, Western Province. The launching marked the first batch of 1,000 doses of the AstraZeneca vaccine which OTML received from the National Department of Health on Wednesday 19th May. OTML Managing Director and Chief Executive Officer Musje Werror with the Company’s senior management and employees, including its contractors, business partners, Tabubil Hospital staff, and teachers received their first dose of the vaccine. A total of 213 people were vaccinated during the launch while a further 150 people have already registered to be vaccinated this week. “The support we have received from everyone who made the decision to keep themselves, their families, colleagues and our operations safe from COVID-19 by getting their first dose of vaccine during the launch was very encouraging.” Mr Werror said. “However, there is still a long way to go to achieve herd immunity so that we can return to some level of normality.” Mr Werror said the Company is encouraging all its employees, contractors, public servants, town residents, business partners and teachers to receive the vaccine because it is important for the wellbeing of themselves, their families and the communities as well as the continuity of operations. He re-affirmed however, that the decision to be vaccinated remains voluntary. Tabubil Hospital Administrator Ms Margareth Samei said the significant number of people who received the vaccine during the launch was a reflection of the level of vaccine awareness her medical team had presented to front line workers such as teachers, bankers, shop attendants, security personnel, and health care workers in the last week. “The hospital has been working together with OTML to conduct awareness on the vaccine, and its health benefits which has helped people to make informed decisions before they get the jab. We will continue this awareness throughout the Company’s operations so that more people have the correct information on the vaccine,” she said. OTML Superintendent for Logistics Operations, Walimu Karo, who received the vaccine said he decided to get vaccinated to protect himself and his family from the virus. Ok Tedi Mining Limited “People overseas have taken the vaccine and they are beginning to lift restrictions such as allowing people into stadiums to watch rugby. That’s basically why I wanted to get the vaccine so that our lives can return to normal," Mr Karo said. Since the pandemic began in March last year, mining operations at the Ok Tedi mine have been suspended twice due to an escalation of COVID-19 positive cases.

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PNG Business News - May 26, 2021

Bank South Pacific Joins ASX

The Bank South Pacific Financial Group Ltd has had its application to join the Australian Securities Exchange (ASX) accepted. The bank will be listed on the ASX this week, according to Group Chief Executive Officer Robin Fleming, and shareholders will be able to transfer partial shares to the ASX. “We were listed on the PNGX (PNG Stock Exchange) in 2003 but because of the size of BSP, that market capitalisation was close to K5.6 billion,” he said. “And because of the size of BSP, it was difficult for shareholders to have larger partials of shares and actively trade their shareholdings. Being listed on the Australian Stock Exchange, shareholders can move their shares either in full or in parts to the ASX and, therefore, trade their shares far more easily on a very liquid stock exchange market. PNG resident shareholders still have to go through a process in making sure their compliant with the Internal Revenue Commission (IRC) and Bank of PNG guidelines in respect to exchange control as to how they deal with any share sales. But once they move to the Australian stock exchange, they then have the capability to trade their shares far more readily and in a far more accessible format than is the case for PNG. He added, “While we have a good shareholding base in PNG because of BSP’s success, the composition of BSPs investment and the portfolio of some of the superannuation funds which is very high, we’ve been successful. Our portfolio continues to increase and even if they want to trade more actively, it is constrained by the absence of liquidity in PNG.” Sir Kostas Constantinou, the bank's chairman, said it was a watershed moment for the bank, allowing it to collect money and grow more. “It gives us liquidity, it gives our shareholders liquidity so that they can buy and sell shares and trade on the Australian Stock Exchange,” he said.   Reference: The National (24 May 2021). BSP set to start trading on ASX

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PNG Business News - May 26, 2021

BSP Group Records Net Profit of K203 Million

In the first quarter of 2021, South Pacific Financial Group Ltd recorded a net profit of K203 million. According to the bank, this is a 2.6 per cent decrease from the first quarter of 2020, owing to a decrease in net insurance revenue and a rise in computing costs. Some highlights included net assets of K3.6 billion, a cost to income ratio of 40.3 per cent, a capital adequacy ratio of 25 per cent, a provision coverage ratio of 5.7 per cent, a market capitalisation of K5.6 billion, and earnings per share of 43 toea.  The last 12 months had been tough, according to Group Chairman Sir Kostas Constantinou, "but we did well with the profits that we achieved." “We have an excellent staff, everybody’s committed,” he said. “It is unfortunate with the Covid-19, but we progress forward now with the inoculation of our staff who are behind it. The intention is to do most of the branches. We have had problems through the Pacific, places like Samoa, Tonga which have been restricted because of tourism. The Cook Islands have opened up so we are yet to see what happens. In spite of this, Sir Kostas remained positive. “Good times are coming for Papua New Guinea with the recent announcements on the progress of some of the country’s resource projects,” he said. “We are fortunate that we have the Papua LNG project that has been successfully completed and is proceeding with Total who’s the lead partner doing the upstream and Exxon doing the downstream. These projects are K48 billion and right on our doorstep and there’s not a lot of countries in the world that have these types of projects.” The news about P'Nyang was also embraced, according to Sir Kostas.   Reference: The National (24 May 2021). Bank records first quarter profit of K203 million

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PNG Business News - May 24, 2021

Weir Minerals announces major order of Enduron® HPGR with IAMGOLD

Weir Minerals is proud to announce another major order of Enduron® HPGR in Gold application with our valued Customer IAMGOLD. An Enduron® HPGR with rolls measuring 2.4 m x 2.4 m (length : diameter) will be installed at IAMGOLD's Côté Gold Project. This will be the largest HPGR in Canada and the largest in the world in a gold hard rock application. Weir Minerals’ Enduron® HPGR unique design is perfectly suited to IAMGOLD’s Côté Gold operations to achieve industry-leading particle size reduction and with the lowest total operating costs. Enduron® HPGR is the market proven HPGR with the mechanical design to support efficient and durable skewing thanks to its unique bearing arrangement and control philosophy Enduron® HPGR has a unique roll diameter-width ratio which maximizes throughput at the desired product grind Enduron® HPGR self-adjusting cheek plates provide equal sealing distance as flanges at minimum costs Enduron® HPGR is the market leader in large format, high tonnage hard rock HPGR Tim Lundquist, HPGR Regional Sales Manager North America: “Our Enduron® HPGR design will create energy savings of up to 40% compared to an equivalent SABC comminution circuit, while also significantly reducing the need for downstream grinding media.  This power and grinding media savings will optimize total ownership cost and also account for a significant reduction in carbon emissions”. Weir Minerals prides itself in being close to its customers at all times. Our Weir Minerals Canada team and purpose-built facilities will be providing full HPGR service for the Côté Gold operations. For more information about Enduron® HPGR please visit enduronhpgr.weir

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PNG Business News - May 11, 2021

New Report Identifies Major Carbon Reduction Opportunities in Global Mining

  New analysis lays out the scale of the mining industry’s energy use and identifies ways it can be reduced using currently available technologies Materials such as copper, lithium and nickel play an essential role in the technologies like electric vehicles and renewables that will help the world meet its decarbonisation targets As demand for these metals increases, the mining industry must itself become more efficient and environmentally sustainable     The global mining industry must move away from legacy systems and processes if it is to meet the challenge of decarbonisation, according to a new report released today which calculates mining’s share of global energy consumption and identifies ways the industry can aid the transition to net zero emissions needed to limit temperatures in line with the Paris Agreement. The report, commissioned by the Weir Group plc, analyses mine energy data from over 40 published studies to give a comprehensive understanding of where energy is consumed in mining and minerals processing. It shows that the total amount of power used by the mining industry – which plays an essential role providing the metals used at the heart of the modern economy – is equal to c.3.5% of global energy use. The metals produced by mining are critical for enabling the global transition to low-carbon infrastructure. But without action, energy use in mining itself is set to trend higher in the coming years as demand increases for metals like copper, nickel and zinc. The report suggests there are technologies available today that could make a significant difference to this trend.  For example, it highlights that comminution – i.e. crushing and grinding processes – is the single biggest user of energy at mine sites, typically accounting for 25% of mining’s final energy consumption. This is equivalent to the power used by 221 million typical UK homes, or c.1% of total consumption globally. Comminution is therefore a natural target for the most impactful energy savings opportunities. Small improvements in comminution technologies can lead to relatively large savings in both energy consumption and greenhouse gas emissions. For example, a 5% incremental improvement in energy efficiency across comminution could result in greenhouse gas emissions reductions of more than 30m tonnes of CO2-e. The replacement of traditional comminution equipment with new grinding technology also reduces indirect emissions in the mining value chain, for example by removing the need for the manufacture of emission-intensive steel grinding balls. Of the remaining energy consumption by the mining industry, diesel in varied forms of mobile equipment accounts for 46%, electricity in mining (ventilation) 15% and “other electricity” 14%. Other significant opportunities identified by the report for reducing mining’s energy consumption include optimisation, big data and artificial intelligence. In addition, if zero emissions energy sources are deployed for mining equipment – e.g., renewable energy, energy storage and alternative fuels – then the industry may well be able to achieve zero emissions, leaving a relatively small role for offsets and carbon credits to play. The report comes as the mining industry is under ever-greater pressure to produce essential minerals that support some of the biggest global structural trends, from population growth to urbanisation and decarbonisation. Copper, nickel, steel and lithium are core components of electricity transmission and storage, electric vehicles and renewable energy infrastructure. The move to a decarbonised economy will result in increased primary consumption of these mined commodities, even after factoring for recycling, so it is important that mining itself becomes more sustainable. Download the independent Mining Energy Consumption 2021 report here: www.energysavingsinmining.com Commenting, Weir Group Chief Executive Jon Stanton said: “The mining industry is central to economic development globally, with critical minerals enabling the low-carbon transition required in the rest of the economy. But the environment in which it will operate in future will be very different from the past, requiring comprehensive change and investment. In short: mining needs to become more sustainable and efficient if it is to provide essential resources the world needs for decarbonisation while reducing its own environmental impact.This report is an important contribution to that debate which we hope will spark thoughtful conversations around the world on the way forward.” Alison Keogh, Chief Executive of the Coalition for Energy Efficient Comminution, said: “This report highlights both a challenge and an opportunity to revitalize cross-industry discussion and actions on decarbonisation and ESG solutions. We invite industry leaders to actively contribute and collaborate through mining-vendor-research partnerships and share knowledge. Together, we can accelerate improved energy, emissions and water footprint across industry faster.” Ricardo Garib, Weir Minerals Divisional President commented: “Weir Minerals is focused on making mining more efficient and sustainable by leading technology change in the industry. Our Enduron HPGRs are increasingly replacing conventional milling systems in comminution (crushing, screening and grinding) circuits because of their substantially lower energy consumption, finer rock reduction requiring less water downstream and potential for significant total cost of ownership reductions.” Stuart Hayton, Managing Director of Weir Minerals Netherlands, where the Enduron® HPGRs are designed and manufactured, added: “Not only do Enduron HPGRs require as much as 40% less energy than traditional alternatives, their wearable components last much longer and the maintenance time required to replace worn out parts is significantly lower. The estimated carbon saving of each Enduron HPGR in operation is equivalent to taking more than 3,600 petrol fuelled cars off the roads each year.” Notes: The report quantifies energy use in five commodities: copper, gold, iron ore, nickel and lithium. Bringing together mine energy use data from more than 40 published studies (each of which references dozens more studies) from 2007 to 2020 into a single narrative, the report aims to build a more comprehensive understanding of energy use in the mining industry. Using the current production rates of the commodities in question, and the energy intensities for each of the commodities, a total of 1,68 EJ/a (1,680,000,000,000,000,000 joules per year) has been calculated. This is approximately 0.5% of total final energy consumption globally. Published information indicates that the entire mining industry consumes approximately 12 EJ per year – or 3.5% of total final energy consumption globally. Assuming that present trends continue, there will be 250m electric vehicles on the road by 2030. To meet this demand, production of cobalt, lithium, graphite and nickel will need to be scaled up significantly. Current projections show that the current rate of decarbonisation globally is far below what is required to meet the goals of the Paris Agreement. A sustained decarbonisation rate of up to 7% per year, year on year should be sufficient to achieve the goal of a temperature increase of well below 2°C by 2100. For the mining industry, there are multiple ways to achieve decarbonisation including energy efficiency and fuel/energy switching. Many of these opportunities are starting to be explored by both the mining companies and the mining services providers, who see decarbonisation and energy reduction as a key way to reduce exposure to the risks of climate change.

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PNG Business News - April 29, 2021

South Pacific Brewery loses K21.46 million

According to South Pacific Brewery managing director Ed Weggemans, the national isolation strategy's ban on the selling of alcohol has resulted in a sales loss of K21.46 million. According to Weggemans, this amounted to an 85 per cent drop in the volume of sales in the closed channels, which would have provided K17.08 million in excise duty and K4.38 million in goods and services tax (GST). He said the company had lost another K1 million in services for water and gas, and that it had started a redundancy program in January that would result in a 20% reduction in employees. “The following compelling points tell the story of the impact and unintended consequences of the liquor restrictions,” Weggemans said. “Liquor restrictions are forcing consumers to the illicit trade; alcohol consumption continues while the Government loses out on income from this licit trade. “The loss of revenue from excise and GST from SP Brewery alone for the duration of the latest announced liquor restrictions is calculated shows that the channels that were closed accounted for 85 per cent of the projected sales volume in the past four weeks. “The volume lost would have generated K17,080,644 in excise duty and K4,383,528 in GST. “This loss of K21,464,172 is irreversible and will not be recovered when the outlets open again. “A further K1 million in utility revenue was lost (WaterPNG/PNG Power). “To right-size the organisation to the new volume levels, since January, SP Brewery has begun a redundancy programme which would see a reduction of our employees by 20 per cent. “This will have a ripple effect on many families in the community and we also anticipate that many other manufacturers/suppliers/customers are also downsizing their organisation to cut down on costs relative to productivity.” SP Brewery has 2,682 registered customers around the country, and the ban will force the closing of 2,228 of them, with 75% of them being small-to-medium-sized businesses (1,671 SMEs would be affected). Liquor bans, according to Weggemans, caused drinkers to turn to the black market, but alcohol intake persisted. “Home brew and steam can have devastating effects on the people of PNG as the production methods are extremely unsafe and the production process produces a product with an undefined alcoholic content that affects people’s health, which is a burden for the healthcare system in Papua New Guinea,” he said. “Illicit alcohol operators thrive during liquor restrictions as these present the ideal opportunity for uncontested sales.” According to Weggemans, the brewer recommends that the government: TAKEAWAY sales of alcohol in all major retail supermarkets; TRADING to occur every day except Sundays; OUTLETS to maintain Covid-19 protocols all the time.

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PNG Business News - April 21, 2021

Powering Papua New Guinea, Empowering Communities

 PNG Biomass is Oil Search’s renewable energy and sustainable tree farming business. Subject to a final investment decision, PNG Biomass will be Oil Search’s first targeted investment into the energy transition. Establishing a renewable energy and sustainable development project in the Markham Valley in Morobe Province is a strategic and sustainable diversification of the Company’s energy portfolio. Designed with a two-fold purpose, PNG Biomass will be powering PNG with domestic low-emission renewable energy and empowering communities by using an inclusive economic growth model. PNG Biomass leverages the strengths and experience of Oil Search in delivering world class infrastructure projects. By building capability in environmental, social and economic responsible energy investments, Oil Search helps offset carbon emissions, develop attractive growth options at an acceptable risk level, and opens pathways to new global partnerships and financing opportunities for both Company and country. The value created by PNG Biomass is shared between landowners, communities, women and youth, future generations, local and regional businesses, provincial and national government, and the Company itself. It is equally a sustainable investment for Oil Search and an investment in the people and prosperity of PNG. Powering Papua New Guinea As an integrated renewable energy project, PNG Biomass will offer biomass power, solar energy, and battery storage technology to generate clean, affordable and reliable energy for the Ramu Grid. This project demonstrates how modular, incremental, diversified and dispatchable energy can pave the way for a new power paradigm that diversifies the country’s energy mix, makes power supply reliable, and helps PNG transition to renewable energy by 2050. Delivering 30 megawatt of electricity to the Ramu Grid, the biomass power plant is integrated with 16,000 hectares of dedicated, sustainable forestry plantations in the Markham Valley established and maintained by local landowners and communities. PNG Biomass will also oversee construction, operation and dispatch of an adjacent 11 megawatt peak solar farm and battery energy storage system, both grant-funded and owned by PNG Power. Together, the biomass power plant and solar farm will provide the Ramu grid with up to 40MW of renewable energy with the battery storage providing firming and grid stabilisation services. By using renewable energy there will be significant carbon emission reductions as generation from diesel and heavy fuel oil (HFO) will be displaced. The battery storage technology will enable load-shifting of solar energy to the highest demand at peak hours and displace more diesel and HFO. As an integrated project there will be ancillary services benefits, including grid stabilization by providing baseload supply to the city of Lae – which represents about 90% of the Ramu Grid load. Sustainable development PNG Biomass delivers many benefits beyond electrification; it is designed to deliver sustainable development closely aligned with PNG development priorities and the Sustainable Development Goals. When fully operational, PNG Biomass will have 500 ongoing local jobs and driving the creation of 2,000 indirect jobs across the region. In 2020 some 300 full-time equivalent (FTE) jobs were created for local in the Markham Valley. The majority of jobs (280 FTE) is contracted directly to community members and landowners through Community Business Groups. With communities and landowners at the core of the project, they can realise the full potential of sustainable rural inclusive economic growth opportunities created by PNG Biomass. Throughout the Markham Valley, close relationships with communities have been built since 2011. Landowners participate actively in the Project by offering select areas of their land for the establishment of sustainable forestry plantations. Landowners come together in community-owned business groups to provide PNG Biomass with labour and services to prepare, plant and maintain plantations. This way PNG Biomass creates significant and diverse income streams for local communities. Agroforestry PNG Biomass encourages and supports women and youth to take advantage of business opportunities to generate substantial benefits and income streams. In particular the agroforestry practice commonly referred to by communities as ‘intercropping’ is popular. Markham Valley communities receive support to help them get started with growing small-scale and short-rotation cash crops in between the rows of trees on plantation land. A team from PNG Biomass regularly conducts intercropping training and field demonstration, focused on ensuring communities understand the basic requirements of weeding, distancing crops from trees and plough lines. In early 2019 a baseline assessment was conducted on intercropping practices across the Markham Valley. The results included that best harvests and incomes are generated from pumpkins, melons and cucumbers. Women reported single harvest incomes of around K3,000 from intercropping on areas smaller than half a hectare. With, at the time, around 400 families involved in small scale intercropping, each harvesting twice a year, they generated together an increase in household income of K2.4 million a year – a number that communities themselves claim to be conservative as they assert the overall intercropping income stream is substantially higher. With more land opening up, more and more local farmers are taking up this agroforestry practice.   Local entrepreneurs Entrepreneurs are also making most of opportunities arising; putting their forestry skills to work in the Markham Valley. Two former employees of PNG Biomass are leveraging the skills and experience they gained during their employment in the Company’s forestry division. Both have founded their own forestry businesses and are now suppliers of PNG Biomass, providing expert forestry services. Community business group development PNG Biomass provides ongoing support to landowners to organise themselves in formal community business groups. The Zif Faring Business Group, representing the business interest of communities around Chivasing village, provides employment opportunities for over sixty landowners contracting them to PNG Biomass. In June 2020, Zif Faring Business Group was also awarded a contract for the provision of transport and delivery services to PNG Biomass. Management of the Zif Faring Business Group subsequently decided to purchase an Isuzu truck to dedicate to the transport services under the contract. Native bee program Switpela Bi Hani was established in 2018 by PNG Biomass as a native stingless bee community development program aimed at helping communities establish a local market for bee products in the Markham Valley. Community training was provided by PNG Biomass in 2018 and 2019, with community members driving expansion themselves in 2020 due to limited options during the COVID-19 pandemic for the continuation of training by foreign bee experts. Community uptake is extremely good, with hundreds of local hives established and new bee-hive materials trialled. More and more communities are participating and together creating a thriving native bee industry. The beekeepers are predominantly subsistence farmers, family units, women groups, and small-scale entrepreneurs – some are involved already with PNG Biomass as tree farmers while others are non-tree farmers.

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PNG Business News - April 21, 2021

Kina Bank Posts Strong Growth in 2020 Despite COVID-19

Despite a challenging year amid the global Covid-19 pandemic, the Kina Bank Group has recorded strong economic growth for the 12 months to December 31, 2020. This was the message from Greg Pawson, Managing Director and Chief Executive Officer of Kina Bank. “We have delivered planned business growth across all of our existing businesses this year, despite the challenges presented by Covid-19. We also achieved the integration benefits critical to the ANZ PNG acquisition. In parallel, we completed a number of strategic initiatives that were market firsts; we launched a suite of new digital products and services; and we achieved significant growth in revenue from our existing digital channels. Our disciplined approach has delivered compelling growth for the year.” Not only that, but it has also achieved many milestones in PNG and the Pacific region and became the first bank in PNG to design and test an eKYC (electronic Know Your Customer) solution for digital account opening, with full biometric and digital document identification. It is now working with the regulator on a scalable in-market solution, according to a statement and market report released recently. Kina’s Funds Administration business continued to record growth in revenue. Profit increased to PGK8.3m representing nine (09) percent growth against the prior corresponding period. This is consistent with revenues arising from increased funds under administration and growth in member numbers compared to the prior year. Prudent management, innovation and strategic investments had seen significant progress made on a series of strategic initiatives that have successfully delivered growth for the business.  Some of the achievements of the bank during the period include: Announced the proposed acquisition of Westpac’s Pacific businesses in PNG and Fiji which is expected to complete by 30 September 2021 to become a larger scale regional bank. The acquisition is subject to regulatory approvals by the Bank of Papua New Guinea and the ICCC (Competition regulator).  Simplified the corporate structure and successfully conducted a 1:2 NonRenounceable Rights Issue (ANREO) ensuring strong capital adequacy for the Bank. This will position the company for further growth while creating capacity to take advantage of acquisition and growth opportunities that may arise.  Delivered the planned revenues from new channel income of PGK 18.8m from new channels successfully launched during the year. Introduced a flagship new customer offering, Prime, that includes fee free Visa cards, the lowest fixed rate home loan in PNG history, and a dedicated relationship advisor for expert customer advice for all business customers.   Invested significantly in cards fraud risk and compliance systems and processes, resulting in a 95% reduction in fraud losses. New capabilities include a fraud monitoring module, 3D Secure, SMS email and WhatsApp alerts.  Became the first commercial bank in the Pacific to implement VISA transaction controls online, giving customers greater choice on how their cards are used, further reducing the risk of fraud. Launched a market leading internet payment gateway that facilitates digital payments through multiple online channels for scheme cards and local bank cards issued by Kina Bank. The gateway enables payment partnerships direct to merchants or via intermediated e-commerce providers.  Kina Bank also signed a digital partnership with a local fintech company to deliver e-government services.  The Department of Lands and the Immigration and Citizenship Authority were onboarded in Q4. The partnership is a significant step forward in Kina's ambition to drive digitally enabled government services.  It also became the first bank in the Pacific to launch a Xero bankfeed API that will enable business customers to integrate their banking transaction data directly with the Xero platform, and opens up additional commercial partnership opportunities. In addition to doubling the number of merchant POS terminals in market, implemented a fully integrated solution between Pronto terminals and Kina POS machines, with best in-market performance and superior reliability. The Financial Results for the year were: Revenue up 53% on PCP to PGK 314.8m Non-interest income up 59% on PCP to PGK145.1m Return on equity 16.8% NPAT up 25% on PCP to PGK 76.0m Net interest income up 48% on PCP to PGK 169.7m Capital adequacy at 23.8% Net interest margin 7.5% • Earnings per share of AUD 11.7 cents or PGK 32.9 toea per share • Full year dividend AUD 10.0 cents or PGK 26.9 toea per share Net Interest Income increased by 48% to PGK 169.7m compared to the prior corresponding period. This was achieved through growth in the existing loan book, incorporation of the ANZ loans and deposit portfolio and business acquisition, and lower interest expense (against total deposits) compared to the prior year. Overall gross loan book growth was up 16% against the corresponding prior period.

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PNG Business News - April 21, 2021

Atlas Steel Introduces Modular Houses

‘It is a big year for Atlas Steel PNG, a local company, who is introducing Modular Houses – a new product to the PNG market during the second quarter of 2021. Business Development Manager Aliraza Agai said: ‘Modular Houses are a new addition to our Building Division which is already the largest supplier of steel buildings across PNG for the residential, educational, commercial & industrial sectors’. The main features of the Atlas Modular Houses are: Predictable Cost: A controlled and fixed pricing method is adopted at the beginning of the construction process allowing you to effectively know exactly what you are getting for your money. Assured Time Frame: The average time from commencement of works to handover is 10 weeks, which consists of six weeks factory construction and four weeks on-site completion. The benefit of modular construction is the ability to commence works on both the prefabricated modules in the factory and the footings and landscaping components on site at the same time. Best Design & Construction capabilities: Our experienced in-house design, engineering & construction team allow us to come up with creative and smart solutions to complex architectural forms and functional requirements. All structural elements of your house are designed using in-house design software and manufactured in our state-of-the-art factory using Computer Numerical Controlled (CNC) technology by our team of dedicated professionals. Top Quality Control: In Modular construction, majority of the works are carried out in a controlled factory environment. Our designers, engineers and tradespeople are at site, at all time, which results in a focused attention to detail and quality control throughout the entire construction process of your building.   As outlined by Ali, it’s a simple 5-step process to building your dream Modular home. Step 1: Consultation: This involves a meeting with our team to discuss the feasibility of the modular system for your home. Our creative and technical team will assess your requirements, your site and your needs related to the basic parameters as well as your selection of finishes, fixtures & fittings to form a design brief. Step  2: Design & Costing: Based on your requirements, designs and costings are prepared for your review and feedback. Once your comments are incorporated, Atlas Steel PNG draws out final drawings, designs and prices for your acceptance - which then culminates into a detailed contract. Step 3: Planning Approvals: The designs and drawings are then submitted to our panel of Professional Engineers for their approvals after which the documents and reports are submitted to the Building Board for necessary approvals. Step  4: Factory Construction: Factory construction involves manufacturing and assembly of all structural components of the house along with fit-outs to the required stage of completion before transport. This includes our quality FRAMECAD steel framing system, external & internal cladding both of which are manufactured using Galvanized & COLORBOND steel coils from New Zealand Steel. The interiors comprise of quality kitchens, bathrooms, floor coverings, electrical, plumbing, joinery and all painting works. While these works progress in the factory, foundation and earth works also commence at site to receive the modular house within the stipulated time frame. Step 5: Delivery & Site works: This involves craning & delivery of the pre-fabricated modules to the site along-with service connections for electrical and plumbing systems. Once the house is ready and all operational checks have been done, a formal hand-over of the house takes place.   “With Modular Homes added to our buildings division, we expect to get even busier this year. Classrooms are the next category that we plan to roll out and keeping in mind the demand that these Modular buildings are anticipated to create, we are already looking into expanding our fabrication and assembly facilities and recruiting more staff” Ali said. “The biggest challenge that a buyer faces today is to choose the right product. The market is flooded with poor quality, sub-standard building components. At the same time there is also a rise in imports of house and building structures from overseas. When a buyer takes delivery of an imported building, first of all, he does not get a share of the savings because the suppliers pocket all the savings. Secondly, because of poor quality control, most of the buildings begin to rust and leak causing both emotional and financial stress to the buyer. Thirdly, and most importantly, how will we be able to create a self-sufficient and sustainable domestic economy if we encourage such imports. Buying Atlas Steel PNG quality buildings locally helps keep the PNG Kina in PNG and provides work to our local work-force” Ali added. Having been in the PNG building and construction market for decades, Atlas Steel PNG understands the local needs and has spent time and resources to come up with suitable layouts and designs that amalgamate quality and style with affordable pricing. In addition to standard layouts Atlas Steel PNG also offer tailored solutions to clients, to build their dream homes and building structures. According to Ali, quality and cost continue to be the primary drivers across all divisions in Atlas Steel PNG, including the new Modular systems. In his final remarks Ali said: “Atlas Steel PNG is a local company and we are doing our bit to contribute to the local economy. Likewise, I encourage the Public and Private sectors to also emphasize on using PNG Made products to support domestic businesses and strengthen the local economy."

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PNG Business News - April 21, 2021

Innovative Flat Pack Engineering – 75 % Freight Reduction’

Ark Pacific has cleverly engineered its flat pack buildings to guarantee a minimum freight footprint for its clients.  Unlike competing products, six of Ark’s high quality flack pack units are equivalent to a single standard 20 foot shipping container when stacked together ready for transport.  Not only are freight costs drastically reduced (by up to 75 percent) but so too are carbon emissions.  Furthermore, the ease and speed with which the flat packed buildings can be transported to site is greatly improved. Land freight costs in particular, greatly add to the cost of building in PNG, especially in remote locations. Although Ark Pacific does not compete solely on price, the considerable freight savings associated with its flat pack systems enable it to be one of the lower cost building alternatives without compromising on quality.  A recent mining client was able to transport all of the flat pack componentry required for five office blocks, one ablution block and one crib room on just one semi-trailer truck – competing modular products would have required up to eight trucks. In addition to reducing freight costs and therefore the overall cost of construction projects, building with Ark Pacific flat packs also help reduce a client’s environmental footprint.  For example, one truck travelling between Lae and the Highlands obviously produces considerably less emissions than eight trucks.  Moreover, fewer trucks have less negative impact on unsophisticated road infrastructure, including many of the unsealed and rough roads servicing mining sites. Popular with its resource clients, Ark Pacific products also have the advantage of quick assembly utilising local and unskilled workforces.  A basic one-room accommodation unit can be installed in a single day.  To date, all of the thousands of Ark modules across PNG have been installed by local content.  Ark Pacific’s team of managers are available to oversee any construction project if required. With a 10 year presence in PNG, new resource client projects in 2021 include a Crusher Facility Office and Electrical & Instrumentation Building (both two-storey), as well as the project cited earlier.  Ark Pacific is also halfway through constructing a 750 person mining camp (16 x two-storey buildings; 54 ensuited rooms per building). Initially having specialised in camp accommodation and office complexes for the resource sector, Ark Pacific has recently refined and expanded its residential housing product range.  Durable and fit-for-purpose designs – ideal for community relocation projects as well as senior staff housing – are now available.  Ark Pacific reports that it is not experiencing any supply chain difficulties due to COVID-19.  Furthermore, given its reliance on local labour for installation (as opposed to expatriate personnel impacted by travel restrictions), clients have been able to commence their builds as soon as the flat packs arrive on site. To learn more about Ark Pacific, including how its flat pack systems can minimise your construction project’s freight footprint: www.arkpacific.net

Company

PNG Business News - April 08, 2021

Steamships Posts K789 Million Profit

For the fiscal year 2020, Steamships Trading Company posted a profit of K78.9 million. This represents a 57.7% increase from the company's financial year 2019 figures. Consort's better efficiency, along with small contributions from the other logistics companies, helped to offset a loss in Coral Sea Hotels and a weaker outcome for Pacific Palms Property, resulting in the results. The underlying results (before major items) improved by 17.2 per cent in 2019. Chairman G.L Cundle said that, despite the negative effects of COVID, 2020 saw a moderate boost in the group's results, despite the anticipated gains from the APEC Leaders summit not materializing, resource project developments stalling, and a change in government increasing instability. Cundle said the Office of the Prime Minister proclaimed a State of Emergency in Papua New Guinea a year ago because of the global COVID-19 virus pandemic, but the country is now suffering from the virus's effects. Although increased regulatory controls and a decline in demand for goods and services have undoubtedly had an impact on companies, he believes Steamships is well placed to resolve the difficulties raised by the pandemic. “The impact of the pandemic was mostly experienced by the hospitality sector, where Steamships hotel group, Coral Sea Hotels, was immediately and deeply impacted by border closures and restrictions on domestic travel,” he said. “Our logistics businesses quickly adjusted to the new operating constraints caused by the pandemic, and whilst all were impacted, the feared worst-case scenarios have not transpired. Property occupancy and rates have suffered as expatriates have left the country as business and aid agencies scaled back their operations. The impact of reduced occupancy and rental rates may impact the property market for several years.” According to Cundle, a growing budget deficit, which limits the government's ability to stimulate the economy, together with a lack of new resource ventures, would possibly weaken corporate expenditure trust in 2021. Steamships' companies continued to adapt rapidly in 2020, despite the twin pressures of a poor underlying market and the global ramifications of COVID-19, he added. “Management will remain vigilant in managing costs while being responsive to opportunities created by challenging market conditions,” he said, “As ever, and with PNG being both our home and only substantive place of business, Steamships will continue to contribute and participate in PNG’s economic and social development. We are well-positioned for recovery and our team will continue to grow Steamships and its contribution to PNG.”

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Company

PNG Business News - April 06, 2021

How PNG Companies Can Better Handle Procurement and Supply in 2021

The role of the procurement team in PNG will evolve and change in 2021.  These changes will come off the back of some unforeseen issues which may not of been as pertinent prior to the pandemic. Due to regulatory penalties, unprecedented disruption caused by COVID, an increase in raw materials, high demand in shipping and an increase to freight prices due to increased operational costs, many PNG based companies could face a number of complexities to procurement moving forward.  Companies in PNG and around the world will need to adapt to a more proactive approach to ensure supply chain and procurement disruption is minimised.  How can this be done? To minimise disruption, procurement teams should adapt a proactive approach by implementing supplier diversity, various freight & logistics partners, better supply chain management and improved foresight into the many potential issues of a post pandemic era.  As increases in freight are generally hard to avoid, procurement will need to implement these strategies in an effort to save money elsewhere.  The procurement and supply chain of businesses could very well see some challenging times ahead, all businesses should look at how effectively they can manage these issues to build a more resilient and agile supply chain. For more information visit: https://www.asiapac.biz

Company

PNG Business News - April 06, 2021

Changes in Leadership Positions at Ok Tedi Mining

Caption: From Top Left: Issac Kwetok, OTML’s new Deputy General Manager for Processing, Hillary Turnamur, now Manager Process Operations, Beverly Pasen (Manager Finance), David Laulau (Manager Mine Technical Services), Dexter Wagambie (Manager Kiunga Operations), and Rueben Lapin who is now Manager of Business Continuity. As part of its vision to grow national leaders, Ok Tedi Mining Ltd (OTML) has named many of its national employees to leadership roles within the company. The appointments, according to OTML's Managing Director and Chief Executive Officer Musje Werror, are in accordance with the company's Vision 2025, which was announced in late 2020. One of the Company's main goals is to nationalize its senior and executive management positions by 2025, and these appointments will help it achieve that goal. Isaac Kwetok, a qualified chemist from Telefomin in the Sandaun Province who is now the Deputy General Manager for Manufacturing, is one of the six nationals who have been selected. Kwetok joined OTML in 2003 and has worked in a variety of supervisory positions, the most recent of which was Manager Process Operations. Kwetok will now be in charge of Kiunga Operations, Manufacturing Operations, Processing Mechanical Maintenance, Process Stability, and Electrical Maintenance - Technical Services. Hillary Turnamur, who will serve as Manager – Process Operations, and Beverly Pasen, who will serve as Finance Manager, were also appointed. Turnamur has been with OTML since 2005 and previously served as the company's Kiunga Operations Manager, while Pasen served as the company's ICT Manager for the previous three years. Also appointed were David Laulau who has been named Manager Mine Technical Services, Rueben Lapin as the Manager Business Continuity, and Dexter Wagambie as Manager Kiunga Operations. Prior to their current positions, Laulau was the Bige Activities Manager at OTML, Lapin was the Mine Support Services Manager, and Wagambie was the Business Continuity Manager. “These are very important roles within OTML, and each of these individuals has had many years of management experience working at Ok Tedi, including other mines and industries within PNG and abroad,” Werror said. “These changes will provide these leaders with exposure to other areas of the business which is part of our leadership development program. I congratulate all of them and look forward to their contribution to make Ok Tedi the leading mining  company in PNG in the next 5 years as we continue to generate significant wealth for the people of  Western Province and Papua New Guinea.”

Company

PNG Business News - March 31, 2021

Oil Search Environmental Management Certified as ISO 14001 Compliant

Oil Search continues to place constructive environmental conservation at the forefront of its activities. To that end, it maintains an efficient environmental protection scheme that complies with the ISO 14001 global standard's specifications. The Company is dedicated to preserving and reducing environmental impact in the communities. Oil Search's oil and gas facilities are located in some of the world's most isolated and environmentally diverse locations. It is critical that its infrastructure and management processes are equipped to handle the threats that its operations pose to the natural environment. Leon Buskens, Oil Search Country Manager said, “This is an outstanding result for Oil Search. The ISO 14001 recertification provides assurance to our shareholders and other stakeholders of our commitment to safe and environmentally responsible operations.”  Over the course of five days, an analysis of the Company's Environment Management System (EMS) was performed through the Oil Search PNG Business Unit (BU). The audit looked into Oil Search's environmental inspection results, EMS training logs, and relevant contracts that included clauses requiring vendors to follow the company's environmental policies and procedures. The organization first obtained ISO 14001 certification in 2009 and has retained it for the last ten years. Oil Search is committed to recognizing and mitigating the detrimental effects its activities can have on workers and contractor personnel, local community residents, and the ecosystem as a responsible operator, as well as defining opportunities for quality development and optimizing productive business operations. Oil Search's contributions to water, pollution, biodiversity, land use, food care, education and security, and carbon mitigation are outlined in concrete strategies for Health, Welfare, Environment and Security, Social Responsibility, and Climate Change policies.  The company takes a cautious approach to address possibly harmful environmental and social effects on the broader economy and surrounding climate. This entails frequent consultation with communities on how the company's activities can affect them, as well as ensuring that their property, culture, wealth, and rights are safeguarded. Oil Search has set 2021 Key Success Indicators for waste management and greenhouse gas emissions reduction as part of its ongoing pledge to good environmental performance. This involves reducing onsite waste disposal and introducing greenhouse gas (GHG) reduction measures that lead to a GHG level reduction of more than 30% for all managed assets by 2030.

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