Photo: From right to left Dr Kishti Sen Senior Economist of ANZ, middle IRC Commissioner Sam Koim and Dirctor Corporate Affairs Total E&P PNG Limited Richard Kassman

The Port Moresby Chamber of Commerce and Industry (POM CCI) in conjunction with Deloitte PNG had its Annual Budget Breakfast meeting to discuss the 2023 National Government Budget at the Crown Hotel on the 1st of December 2022, present for the occasion were various financial institutions, government institutions and business houses.

The meeting started off with a comprehensive presentation on the 2023 National Budget by Andrew Harris Tax Partner of Deloitte PNG followed by ANZ's Senior Economist Dr Kishti Sen on the general macroeconomic outlook on PNG and concluded by a panel of discussions by the IRC commissioner Sam Koim, and Director Corporate Affairs Total E&P PNG Limited Richard Kassman. 

Mr. Andrew Harris from his detailed presentation on the 2023 budget emphasized that commercial banks will be heavily taxed come 2023 from the new increase in tax charge from the revenue collection. The positive effect is that the budget is catered for the small ordinary Papua New Guinea to benefit from vital government services and the rolling out of SME funds for business opportunities,  connecting feeder roads for remote areas of Papua New Guinea to have access to markets. 

From the panel of discussion Mr. Andrew Harris stated that the Connect PNG Economic Road Transport Development Program, portrayed through the budget was a real demonstration off its efforts to improve the lives of the people however the real issue lies with implementation of its efforts.

"There needs to be collaboration with the various government authorities for real infrastructure projects to be carried out as targeted with the budget to show for its results. "

Dr. Kishti Sen also commented that the budget growth model suggests that operations for the Porgera gold mine to commence in the second quarter 2023 is an uncertainty implying its implications of various stakeholders’ engagement and its new start of operations might take a longer time for the mine to operate to bring in revenue for the country. 

The Breakfast ended on a high note with the commissioner admitting to major changes in the Internal Revenue Commission's tax regime to help improve the business communities, especially in taxation. 

Photo credit: ADB

The Asian Development Bank (ADB) has approved a $250 million policy-based loan to help Papua New Guinea’s (PNG) state-owned enterprises (SOEs) deliver high-quality, affordable services through Subprogram 3 of the ADB-supported SOE Reform Program.

Subprogram 3 supports PNG’s efforts to improve the operational performance and financial sustainability of SOEs and strengthen service delivery. The final subprogram has helped further improve performance and created space for the private sector in critical services such as telecommunications.

“This policy-based program has helped PNG strengthen its legislative and policy frameworks for SOEs, enhanced governance and transparency, and improved the financial position of SOEs in key sectors such as energy, water supply, and aviation,” said ADB Financial Management Specialist for the Pacific Matthew Rees. “We are very happy to see the program delivering results. Supported by recent reforms, SOE Kumul Consolidated Holdings paid the government a dividend of 80 million PNG kina ($22.9 million) this year for the first time since 2015.”

The program is being delivered in close coordination with the Australian and New Zealand governments.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region. 

Photo: Hon. Kerenga Kua - Minister for Petroleum

The second day of the 16th PNG Mining and Petroleum Investment Conference and Exhibition had its focus on project updates from some of PNGs biggest resource companies.

Operator of the multi-billion Kina PNG LNG project, ExxonMobil PNGs Scott Sandlin, Senior Vice President of Production – focused his update on the progression of the project, with efforts focused on long-term economic development.

Nationally-owned Ok Tedi Mining Limited meanwhile is expected to generate over K19 billion in benefits for Papua New Guinea, over the course of the next 11 years, with OTMLs General Commercial Manager Cameron Clark saying “The outlook for Ok Tedi is a positive one. The Company has tripled its value in the last 6 years and extended mine life by 7 years. This has been made possible by a combination of technical improvements, cost improvement, accelerated mining rates and internal investment in key strategic projects”

Simberi St Barbara has been given the permit for sulphides expansion which adds at least another 10 years of mine life from 2024 - 25 when oxides are depleted. The sulphide expansion is under a strategic review by operator St Barbara Limited. Simberi is pursuing cocoa and fisheries (with partners) as its best opportunities for sustainable development.

With K92 looking at a major expansion of their Kainantu Operations, CEO John Lewins was pleased to acknowledge the announcement by Minister for Mining Hon. Ano Pala on the renewal and 10 year extension of their Mining License.

“And I think we have now formed a good partnership, a combination between the government and yourself and as of yesterday when I signed the document, your shareholders will celebrate. And today when I make this announcement, my shareholders, papua new guinea, 10 million people, will celebrate, because everybody down the line will benefit.”

“These decisions we make at the highest level, has an impact right at the grassroots."

Hon Ano Pala - Minister for Mining

John Lewins, K92 Chief Executive Officer and Director, stated, “ The extension of the Mining Lease by the Government of Papua New Guinea and the approval of the Stage 3 and 4 Expansions by the Board of Directors of K92 are major milestones for the Kainantu Gold Mine, Papua New Guinea, our communities, investors and many other stakeholders.

On day one of the conference, Chamber President Mr Anthony Smaré had stated China is also a significant buyer of our LNG production from the PNG LNG, and it will likely be a major buyer of gas from the new LNG developments – Papua LNG, Pnyang, and Pasca. 

Paul Mulder, Managing Director of Mayur Resources, when speaking of the next wave of projects, stated the growth of the industry, has allowed for an expansion in the products that organizations like his can provide, with Mayur focusing on developing a processing plant near the vicinity of the current PNG LNG, which can cater for additional construction needs.

State representatives play an extremely important role as stakeholders in all existing and upcoming resource projects in Papua New Guinea, and with the shift toward focus on national content, presentations by both Minister for Mining Hon. Ano Pala and Hon Kerenga Kua – Minister for Petroleum, National Content and the government policies around it, would guide the direction of future aspirations.

Recently elected to office, New Mining Minister Ano Pala says he will be working closely with all stakeholders in the sector. He took the opportunity to announce the reopening of Porgera, Wafi Golpu and Frieda River after negotiations.

Petroleum Minister Kerenga Kua says PNG’s petroleum sector is in a robust state with 94 active licenses. With 58 prospecting licenses and 10 PDLs, Kua believes this is a good starting point for Papua New Guinea, heading into the future.

Photo credit: K92 Mining

K92 Mining is pleased to announce that the Government of Papua New Guinea has granted an extension of Mining Lease 150 for the Kainantu Gold Mine in Papua New Guinea for a period of 10 years to June 13, 2034.

Concurrent with this announcement, K92’s Board of Directors have approved the Stage 3 and Stage 4 Expansions (collectively the “ Expansions ”), increasing the annual processing throughput to 1.2 mtpa and 1.7 mtpa, respectively. This represents a 140% increase and 240% increase, respectively, from the Stage 2A processing capacity of 500,000 tonnes per annum. The current Stage 2A Expansion run-rate throughput has already been achieved, with the last major process plant upgrade, the installation of flotation cells to double rougher capacity expected in early 2023.

The Expansions are expected to be transformational for Kainantu, as demonstrated in the Integrated Development Plan (“ IDP ”) Stage 4 PEA Case, outlining a peak annual production of 500,192 oz AuEq in 2027, a life of mine average all-in sustaining cost of $687/oz (co-product) or $444/oz net of by-product credits. Importantly, the growth capital cost of US$187 million, sustaining capital cost until operating both process plants of approximately US$60 million per annum, and life of mine sustaining capital cost of US$429 million are expected to be self-funded from mine cash flow at US$1,600/oz Au (see press release dated September 12, 2022 - K92 Mining Inc Announces Robust Kainantu Gold Mine Integrated Development Plan ). Tendering for long-lead time items for the expansion has already commenced.

John Lewins, K92 Chief Executive Officer and Director, stated, “ The extension of the Mining Lease by the Government of Papua New Guinea and the approval of the Stage 3 and 4 Expansions by the Board of Directors of K92 are major milestones for the Kainantu Gold Mine, Papua New Guinea, our communities, investors and many other stakeholders.

When we acquired the Kainantu Gold Mine in 2015, it was under care and maintenance and had a designed throughput of 150,000 tpa – the Stage 4 Expansion targets throughput of 1.7 million tonnes per annum, a more than 11-fold increase. The throughput increase, as outlined in the IDP Stage 4 PEA Case, transforms Kainantu into a Tier 1 mine, with peak production of 500,192 oz AuEq in 2027, low life of mine average all-in sustaining costs of $687/oz (co-product) or $444/oz net of by-product credits and capital self-funded from mine cash flow. The boost to the economy of Papua New Guinea, in terms of jobs, exports, royalties and income tax will be very significant. We also plan to expand our community programs as we expand the mine so that the benefits to our community continue to grow as the mine grows.

Beyond the mine expansion, as we approach 2023, we are very excited about our exploration programs at Kainantu. We plan to expand the number of drill rigs in 2023 from the 11 currently operating, with a focus on resource expansion of our vein fields and porphyries. ”

Photo: OTML General Manager and Chief Financial Officer Cameron Clark speaking at the PNG Mining and Petroleum Investment Conference

The Ok Tedi Mine will generate over PGK19 Billion in dividends for the benefit of Papua New Guinea over the next 11 years, says Ok Tedi Mining Ltd (OTML) General Manager Commercial and Chief Financial Officer Cameron Clark.

Mr Clark said this today when speaking at the PNG Mining and Petroleum Investment Conference in Sydney, Australia.

He said although the mine has been impacted by high fuel cost, and the expected low grade ore transition in 2022, OTML remains profitable and is committed to delivering for its shareholders.

“The outlook for Ok Tedi is a positive one. The Company has tripled its value in the last 6 years and extended mine life by 7 years. This has been made possible by a combination of technical improvements, cost improvement, accelerated mining rates and internal investment in key strategic projects,” Mr. Clark said.

He put this amount into context by saying dividends over the next 11 years will exceed what has been paid in the last 35 years making the period ahead a very important one.

He added that along with taxes, royalties and compensation payments approximating PGK 7 Billion, the overall benefit generated by Ok Tedi in the future is expected to approach PGK 30 Billion. 

We have solid plans in place, and therefore execution of those plans remains the key to ensuring this value is realised he said.

He also said that the Company continues in its efforts to extend mine life beyond 2033, having spent more than PGK350 Million on exploration in recent years.

He added that “We have a 2039 mine life case however this case reduces NPV by 30% and causes additional environmental impact and therefore requires further work before it can be considered a viable option.

Photo: President of the PNG Chamber of Mines and Petroleum Mr Anthony Smaré

President of the PNG Chamber of Mines and Petroleum Mr Anthony Smaré in his opening address to delegates at the 16th PNG Mining and Petroleum Investment Conference and Exhibition says international investment has had a catalysing impact on PNG’s economic development.

The chamber is excited that after three long years, we now have an opportunity to unite the different arenas, in business, government, investors, and the companies that have been part of the national building scope in PNG.

Over one thousand financiers, exploration companies, government officials, landowners and business leaders attended the first day of the 16th conference in Sydney.

It’s been three years of uncertainty, but the stakeholders are happy to be back face-to-face in real-time.

Papua New Guinea’s message to the world is the country has five major projects coming up including the Papua LNG Project, Wafi-Golpu, Pasca, and the reopening of Porgera and P’nyang.  

In a packed room, Key note speaker, Prime Minister James Marape reassured investors of PNG as a potential, while pushing for partnerships in development on the ground.

“We are a mineral and petroleum nation. We know how to give incentives, embrace and protect investors, and allow investors to make a fair and profitable return on their investments;”

The next wave or first waves of responsible investments, or I would rather say ‘responsive investments’, are our big five projects that my government has worked on the last three years where deep in my planning office we label them as “PPPPW”.

They are Papua LNG, Pogera Gold Mine, P’nyang LNG, Pasca Gas Condensate and Wafi-Golpu mining project. We are in ‘deep waters’ in as far as various stages of those projects in as far as agreements and developments are concerned. There is no stopping or turning back and we look forward to substantial concrete progress and project agreement closures and progress to project development.

In my humble opinion these projects developed from 2023 to 2032 will be the impetuous, the next responsive wave responsible for my country’s economy to be catapulted surpassing the K200 billion economy I envisioned on May 30th, 2019, when I made my maiden ‘Take Back PNG and richest black Christian nation’ speech.

Prime Minister Marape says PNG is expecting positive future projections for growth and stands to reach a 200-billion-kina economy, but it must include local involvement.

“You take my gas and you take my people with you, we will support everything you do, it wasn’t a literal statement to taking my people with you, but for the betterment of their life.” Said Mr Marape.

Prime Minister James Mapare - keynote Address at the 16th PNG Mining and Petroleum Investment Conference

Chamber President Anthony Smare’ says PNG’s resource growth is over K30 million and is expected to grow exponentially.

“ As I discussed with PM Marape yesterday, his government is now at a unique juncture in our nation’s history. It is the first time that our country is on the cusp of delivering not one, but four major resource projects of over $30 billion.  Papua LNG with its $12 billion capital cost, Pnyang at $10 billion, the reopening of Porgera, and Wafi Golpu Copper-Gold project at $6 billion or potentially higher.   Add the Pasca gas project at $2 billion and one can understand why negotiating all these deals at the same time has placed the government negotiation machinery under significant strain.”

Mr Smaré reiterated with gratitude, Australia’s continued support as a development partner to PNG, but highlighted that future investments projects could also include other global economies like China.

“China is a very important partner of our country. It plays a significant role in our economy currently.  It has interests in a number of our mining projects – a quarter of Porgera through Zijin Mining, and the majority interest in the Ramu Nickel-Cobalt mine through MMC. China is a buyer of much of our current minerals output.   China is also a significant buyer of our LNG production from the PNG LNG, and it will likely be a major buyer of gas from our new LNG developments – Papua LNG, Pnyang, and Pasca.”

Pat Conroy Australian Minister for International Development and the Pacific, while speaking at the conference said Australia does need to step up participation in the development of PNG.

Hon. Pat Conroy, MP, Australian Minister for International Development and the Pacific

"All of our investments in Papua New Guinea are squarely aimed at helping Papua New Guinea achieve its economic and development priorities. We’ve provided budget support loans of around $1.2 billion in 2020 and 2021, to help Papua New Guinea repair its budget out of the pandemic. And we are supporting the Papua New Guinean Government’s efforts to make Papua New Guinea a more attractive place for business activity and investment. We’re keenly aware of how much the mining and petroleum sectors contribute to Papua New Guinea’s economy. And this of course is another area of close connection between Australia and Papua New Guinea.  We are both countries with abundant natural resources. We are both countries with significant mining sectors which have been fundamental to our economic development – supporting growth, exports and jobs.

Many of the Australian mining and petroleum companies represented at this conference have made significant investments in economic and social development, spanning decades of engagement with communities from Western Province to the New Guinea Islands.”

The agenda for the 16th PNG Mining and Petroleum Conference, seeks to highlight investment and development opportunities that PNG can offer.

Photo: Minister for International Trade and Investment, Hon. Richard Maru

Papua New Guinea (PNG) is ready to commence the feasibility study on a proposed free trade agreement with the People’s Republic of China. This study has been in the pipeline for some time and finally, with the grant funding of K1 million from the Chinese Government to the PNG National Trade Office, the study will commence in the new year, 2023.

Minister for International Trade and Investment, Hon. Richard Maru said that with PNG adopting its first ever National Trade Policy 2017-2032 in 2017, it is now a requirement that a Cost-Benefit Analysis (CBA) be conducted and all affected stakeholders to be consulted as a prerequisite before committing the country to any form of Trade Negotiations or prior to signing any Trade Arrangement/ Agreement amongst other guiding principles and measures.

“Therefore, prior to any bilateral trade negotiations, PNG must conduct proper feasibility studies to assess the impacts on PNG’s economic and social sectors in order to determine PNG’s offensive and defensive interests of our people and business as stipulated under the National Trade Policy to ensure that the possible trade deal will be in the interest of PNG,” said Minister Maru.

Minister Maru further stated that the feasibility study will be undertaken by an independent body to inform of the possible scope of the proposed free trade agreement with China.

“Whether it will be a full-blown agreement or a partial scope agreement that we can build on in the future,” Minister Maru added.

The inaugural Joint Trade and Investment Committee Meeting between the Philippines and Papua New Guinea will take place in Manila in January 2023.

The purpose of the conference is to talk about measures to increase and diversify commercial and investment ties between the two nations.

On the sidelines of the APEC meetings in Bangkok, Thailand, Alfredo Espinosa Pascual, secretary of the Philippine Department of Trade and Industry, and Richard Maru, minister for international trade and investment, reached this agreement.

Though the two nations lack a formal, contemporary trade and economic framework to direct their collaboration and enable deeper integration in relations, he said that trade, investment, and people-to-people ties between PNG and the Philippines have grown over time.

“Based on the current statistics, there are about 30,000 Filipinos in PNG, composed mostly of overseas Filipino workers and marginal members of permanent residents and naturalised PNG citizens of Filipino origin,” he said.

“The Philippines investment, especially in the fisheries sector, has also increased over the years and there are more opportunities for increase in trade and investment between the two countries.

“It is about time for our two governments to initiate discussions with the view to have a formal trade and investment arrangement that is of benefit to our two countries,” Mr Maru said.

The two nations' first step in formalising trade and investment agreements that would be advantageous to both will be the joint trade and investment committee meeting.

The purpose of the gathering is to hold preliminary conversations about how to modernise, diversify, and increase trade, for example, under a new trade framework that takes into account current trade and investment challenges of the two countries' expanding economies. issues like agreements on the protection of investments and their promotion, double taxation agreements, and the promotion of economic cooperation between institutions of government, agencies that regulate and facilitate trade, and professional umbrella groups like chambers and private sector organisations.

The discussion of these topics will improve trade and investment ties between the two nations by supplying the private sectors of both nations with the knowledge and assurance necessary to conduct business.

Meanwhile, Mr. Maru stated that PNG is specifically aiming to attract Filipino investors to come and assist the Government's initiatives to establish a significant rice sector in PNG.

Reference: Post-Courier (21 November 2022). “PNG, Philippines Meet Set For Jan, 2023”.

Due to its strategic position, Singapore is eager to host the Papua New Guinea Trade and Investment Roadshow the next year, where PNG can promote all the potential it can provide to Singapore and the Asia area.

At a meeting on the sidelines of the APEC Summit in Bangkok, Thailand, the Minister for International Trade and Investment, Richard Maru, made the proposal, and the Trade and Industry Minister of Singapore, Kim Yong Gan, responded.

“Singapore is keen to host the roadshow where PNG would not only market its products and projects but also use the opportunity to speak to investors and businesses in Singapore on the opportunities in PNG,” Mr Maru said.

“It would be an opportunity to see if there is any appetite for the investors in Singapore to look at investing in PNG.”

During the discussion, it was decided that a trade delegation from PNG would travel to Singapore to learn more about the country's trade and investment interests. They would then collaborate with the Singapore Business Federation to plan a roadshow that would highlight these interests.

During the discussion, Mr. Gan also mentioned that Singapore was eager to purchase LNG (liquefied natural gas) from PNG as well as other items, such as chicken, which they now import all the way from Brazil.

The intention to create a trade mission in Singapore by next year, according to Mr. Maru, is crucial because it would strengthen PNG's trade and investment ties with Singapore, where PNG has not previously pushed for trade.

“There are a lot more investors in Asia and Arab nations and they have the financial resources and the technical capacity to invest in PNG, especially in the mining and petroleum space, but we haven’t done enough to market our opportunities,” Mr Maru said.

“I will talk with the mining and petroleum sector to look at staging the PNG Mining and Petroleum Investment Conference in Singapore next year as part of our greater push into Asia.”

Reference: Post-Courier (23 November 2022). “Singapore Keen To Host PNG Trade And Investment Roadshow In 2023”.

A Memorandum of Cooperation on a Joint Crediting Mechanism (JCM) was signed by Papua New Guinea (PNG) and Japan on the sidelines of the 27th Climate Conference of the United Nations (COP 27) in Egypt.

The Government of Japan created the Joint Crediting Mechanism, a new project-based bilateral offset crediting system, to make it easier to adopt cutting-edge low-carbon technology for reducing greenhouse gas (GHG) emissions in host countries.

The agreement's signing marked the beginning of the two nations' joint efforts to combat the effects of climate change in accordance with their respective National Determined Contributions (NDCs) under the Paris Agreement. The NDCs represent each nation's efforts to lower national carbon emissions and prepare for the effects of climate change.

Simo Kilepa, the Minister for Environment, Conservation, and Climate Change of Papua New Guinea, and Akihiro Nishimura, the Minister for Environment of Japan, signed the Memorandum of Cooperation in front of delegates and invited guests from both countries during COP 27.

“This occasion signals another milestone of the two countries’ bilateral relationship; this time on operationalizing Article 6 of the Paris Agreement through cooperative approaches and applying internally transferred mitigation outcomes”, said Minister Kilepa. 

He said, “the cooperation is important for our countries to increase our climate change mitigation actions to support the implementation of our National Determined Contributions, including contributing to the 1.5-degree goal of the Paris (climate) Agreement”.

“Papua New Guinea welcomes and appreciates the support that the Government of Japan will provide and facilitate through technological assistance and capacity building support necessary for the administration of the mechanism within this Memorandum of Cooperation”, said Minister Kilepa. 

Akihiro Nishimura, Japan's Environment Minister, acknowledged PNG's participation in the JCM. According to him, the signing will for many years to further solidify the two countries' established bilateral relationship.

“I am very pleased that we are able to sign the Memorandum of Cooperation on the establishment of the joint credited mechanism with Papua New Guinea.

“Papua New Guinea is the 25th JCM partner country. We sincerely hope that JCM will be instrumental in deployment of advanced decarbonization technologies and infrastructure in Papua New Guinea leading to not only emissions reductions but also sustainable development in Papua New Guinea”, said Minister Nishimura. 

The next stage that both nations will strive toward is the execution of the Memorandum of Cooperation. After I return home and provide the National Executive Council with the appropriate information on the results of COP27, this will happen, according to Minister Kilepa.

“This is the first UNFCCC Conference of the Parties (COP) meeting I have participated soon after my assumption of my ministerial portfolio.  I have learned that the work involved in this process is complex and challenging, especially in the key areas including climate Adaptation, Mitigation, Financing, Transparency, Markets and Non-Markets and Loss and Damage”, said Minister Kilepa. 

Minister Kilepa emphasised the need for commitment, focus, and most importantly, strong leadership to ensure that the nation's top priorities for combating climate change are advanced and secured. This requires close collaboration with the nations of the Pacific region as well as the larger international community.

The technical officials from both countries who have been working tirelessly for many months to ensure the successful conclusion and signing of the bilateral agreement were also recognised and appreciated by Minister Kilepa.

“The Memorandum of Cooperation is yet another excellent testament to the importance of working together as a whole of Government, particularly in a highly technical area that requires expert level coordination and guidance,” said Minister Kilepa.

Minister Kilepa continued, "The Government's investment in officers' capacity building and our institutional strengthening has also significantly contributed in enabling PNG officials to be leaders and coordinators on key thematic areas of this Conference for the Pacific region, such as on Adaptation, which addresses response measures to climate change to protect people, livelihoods, and ecosystems; Gender and Transparency, as well as for the carriage of the country."

Reference: Papua New Guinea Today (20 November 2022). “PNG and Japan sign Memorandum of Cooperation on Joint Crediting Mechanism to reduce carbon emissions”.

A proposal to establish an honorary consul in Vietnam’s capital city of Hanoi has been discussed in a bilateral meeting between Papua New Guinea and Vietnam’s Foreign Ministers.

Foreign Affairs Minister Justin Tkatchenko met with his Vietnamese counterpart Bui Thanh Son during the APEC Summit in Bangkok, Thailand.

Vietnam is a fast growing economy with robust levels of exports to countries within the region and Europe, and this opens the potential for PNG to engage more actively in trade and economic relations with Vietnam.

Minister Tkatchenko said PNG is keen on building a diplomatic mission through the honorary consul that would eventually lead to an embassy as relations between both countries continue to grow. 

Vietnam Foreign Affairs Minister Bui Thanh Son agreed that it was a great idea to have a PNG diplomatic mission established in Vietnam.

He also proposed that both countries increase the exchange of high level visits and dialogues, as well as increase multilateral cooperation at the United Nations, APEC and other forums.

Discussions are underway to establish a sister-city initiative between Papua New Guinea's Capital Port Moresby and Da Nang city in Vietnam.

This was agreed to in a bilateral meeting between Foreign Affairs Minister Justin Tkatchenko and Vietnam’s Foreign Minister Bui Thanh Son during the APEC Summit in Bangkok, Thailand.

PNG Minister Tkatchenko, who is also the Member for Moresby South, said he fully supports the initiative, because it opens many opportunities for the nations capital.

Vietnam’s Foreign Minister said Da Nang is one of the fastest growing cities in Vietnam and is an attraction for tourism and other sectors.

NCD Governor Powes Parkop, who also sat in the meeting, expressed keen interest in the management systems that Vietnam employed to maximise their Special Economic Zones. 

He said Vietnam is leading in terms of that model of stimulating that economy and creating employment and businesses – an area Port Moresby can venture into mainly in agriculture, fisheries and tourism. 

Prime Minister James Marape and Minister Tkatchenko were also invited to officially visit Vietnam.

Following the government's Budget 2023 proposal to hike corporation tax from 30% to 45%, Kina Bank is abandoning all of its plans to grow by opening additional offices nationally.

Greg Pawson, the chief executive of Kina, stated that the bank was against any rise in corporate tax on the banking industry.

“To put into perspective, it is an additional tax of K40 million for Kina based on our 2023 forecast. That is a 50 per cent increase and K40 million that we will now be forced to not invest in future growth. The additional tax is a disincentive for us to invest and grow,” he said.

“The unintended consequences of such a move will be detrimental to the banking sector in Papua New Guinea (PNG) which is already structurally imbalanced,” Pawson added.

Pawson also announced the suspension of its small-to-medium business and home loan concession interest rate programs.

“We will be forced to reassess our capital expenditure programmes and likely cut investment,” he said.

“Crazy stuff and typical of recent policy developments, it will be the average Papua New Guineans who will be impacted.”

The first bank to respond adversely to Treasurer Ian Ling-Budget Stuckey's 2023 is Kina.

The tax hike is anticipated to cause commercial banks to boost interest rates and fees, making PNG the second-highest tax system in the world.

Ling-Stuckey announced the beginning of this tax during a business budget breakfast in Port Moresby.

“This is expected to raise K240 million (for the Government) to fund vital core services. We will consult the banking industry in the first half of next year, and consider if a different type of tax, such as an additional profits tax, may be more appropriate from 2024 onwards, while still raising the required revenues,” he said.

According to Ling-Stuckey, taxing banks was a good idea.

“Government needs to continue to raise revenue. We might introduce some new taxes to the sector (banking), that might in the best place to afford paying tax,” he said.

Reference: Esila, Peter. The National (1 December 2022). “Kina shelves expansion plans”. 

Photo: Richard Maru. Credit: Richard Maru Facebook Page

Richard Maru, the minister of foreign trade and investment, says he is eager to promote trade and investment with Indonesia.

“Our people go to the border to trade with Indonesia. There is big trade happening there, but our two governments have not made the time to enter into a formal trade and investment partnership and relationship. That discussion started today,” he added.

Maru spoke at a meeting with Jerry Sambuaga, the vice-minister of trade for Indonesia, outside of the most recent conference of the Asia-Pacific Economic Cooperation in Bangkok.

“This was our mistake for not building the investment partnership. I want to fix this in my term as the minister.

“So, when I first took office, I said our highest priority in terms of trade and investment would be with Indonesia in the next five years – that would be PNG’s No.1 trade and investment priority,” he added.

“We must start putting up power lines from Vanimo to the border (Wutung) so that we can start buying electricity from Indonesia. That is the first product that Indonesia can sell to us as we embark on this relationship.

“We have also declared war on the export of raw materials. We do not want to export raw materials. Indonesian companies can come and invest in this space.

“We want to see more investment in cattle, oil palm and rice. We have mining and gas projects.

“There are many opportunities for investments there, but Indonesia has not tapped into our opportunities, and we have not marketed our opportunities to Indonesia,” he said.

Sambuaga was informed by Maru that it was crucial for the two nations to examine the feasibility of developing air travel and cargo transportation between Papua New Guinea and Indonesia.

Reference: The National (1 December 2022). “Maru keen on pursuing trade with Indonesia”.

Prime Minister Hon. James Marape says the Commission of Inquiry (COI) into the K722 million Sale and Purchase of Motukea Wharf in Port Moresby is part of the Government’s efforts to ensure that processes and procedures that are in place are observed in such major transactions.

He also announced that the Government had taken steps to enforce recommendations of the previous COI into the controversial Union Bank of Switzerland (UBS) loan taken by former prime minister Peter O’Neill.

“The COI into the Motukea Wharf was established to inquire into and report whether or not any law or constitutional requirements were breached in the negotiation and subsequent approval on the relocation of the Port Moresby Wharf and acquisition of the Motukea Wharf,” PM Marape said.

“This COI will reveal individuals and entities who have taken part in the process of selling and purchasing the Motukea Wharf at a value of K722 227,000. Those implicated, if any, by the COI will face the full extent of the law, which includes myself.”

“I want to assure the people that we have taken steps to enforce the recommendations of the Commission and are in the process of engaging lawyers to advise the Government on the best way to implement the recommendations of the UBS Loan Inquiry,” he said.

“These include taking legal action against those implicated in the UBS Loan Inquiry and seeking restitution for the loss of revenue to our country from institutions like the Union Bank of Switzerland and others.

“These inquiries into suspicious and dubious dealings by high-level Government officials and various institutions are important as we hope they will help us to improve our systems and processes.

“As such, we intend to utilise the findings and recommendations from the UBS Loan and Motukea dealings to set an example that the laws of this country apply to everyone, and that these recommendations will not collect dust.”

PNG Customs services and Bank of Papua New Guinea today launched a Joint initiative cross border movement currency valuables form (CMCV) in Port Moresby, it is a mandatory document for all international travelers that will be implemented starting on the 1st of December,

PNG Customs ramped up its services and have developed a standard operating procedure which will come into effect on the 1st of December that will see all travelers complying with. This initiative is to prevent the smuggling of money and other valuable items in and out of the country. PNG Customs Deputy Commissioner Benjamin Sine highlighted the importance of the document by stressing on its functions.

"This document is very significant and important and it's discussed everywhere else as well in terms of in reducing issues such as Money laundering and also major crimes such as the funding of terrorist activities"

He further emphasized on the laws that will be implemented to govern the movement of certain valuable items.

“There are laws in place that govern the operations if what we do in this country, in terms of money gold, silver or any other precious items that will be taken out of this country, you have to comply with all laws and requirements that governs the movement of this precious items, so I believe that our team from Bank of PNG also have other requirements that you will have to comply with, and we will make it known to the travelling public that these are laws that are in place." Said acting commissioner Sine.

Bank of PNG's Financial Analysis & Supervision Unit, Acting Director, Wilson Onea also explained on how they can proceed on having a declaration system in place for action items such as currencies over the value of twenty thousand being brought in and out of the country. He also highlighted the importance of the CMCV forms.

"Our technical team has been working behind the scenes to develop these forms to ensure that Papua New Guinea does comply with international standards or best practices when it comes to protecting and securing our borders and our future" said FASU's acting director Mr Onea.

Photo: Deputy Prime Minister John Rosso 

Deputy Prime Minister John Rosso has said that the 2023 National Budget will focus on law and order to ensure confidence in economic development activities.

Mr Rosso who is also the Lands and Physical Planning Minister further hinted during grievances debate in Parliament.

He said the budget will also focus on Agriculture, education and land development. For education it will be on Technical Vocational Education Training (TVET) as part of the education for all and leave no child behind policy.

“So, I can assure you that this Government has place priority on law and order, and we are directly behind our Internal Security Minister to ensure this happens. And it’s not just the police force but CS, it is a holistic approach. It will take four years of consistent funding or properly trained men. If we can do it now, then we will fix it,” he said.

“And then we have to resource our people adequately with economic opportunities.  Many of what I’m saying now will be reflected in our budget, the agriculture, and the land development sector. People will ask why we are putting money into land development. Only 3% of land is alienated land. Where will we put agriculture projects like oil palm? We go and partner with customary landowners.

“In Port Moresby and Lae no new suburbs have been built although population has increased since 1975 or 1980. We need to house our people properly. 

“Land rates will bring K5 million in a year, K12 million from water rate.  You will make K20 million coming back to SOE power, water and land K40 million in one brand new suburbs. So, when we spend money, we will also make good money in return. And at the same time, house our people. Same will go to agricultural allotment, we expand and built oil palms.  That will be the Government’s focus next year to address. Law and order remain our biggest priorities.  We will also focus on education on TVET.”

Additional company tax on the banking sector will increase from 30 to 45 percent treasurer Ian Ling-Stuckey said when presenting the 2023 budget in parliament recently. This is expected to raise K240 million in 2023 to fund core vital services.

The additional company tax was initially imposed on companies declaring huge profits such as BSP and Digicel PNG LTD, for 2023 the government will repeal the tax by replacing it with a imposed increase in company tax for all commercial banks from 30 to 45 percent, according to the Treasurer the government is taking several different measures to increase revenue collection for the country and the company tax is one way that the government is expected to raise K240 million in revenue next year to fund key priority areas.

"Following consultations, we have decided to change the form of the tax introduced on the banking sector in 2022, From the 1st of January 2023, the rate of company tax payable by commercial banks will increase from 30 to 45 percent, this is expected to raise K240 million in 2023 funding vital core services.

We will consult closely with the banking industry for the first half of next year and consider if a different type of tax such as an additional profits tax may be more appropriate from 2024 onwards."

The treasurer said this is part of the government’s efforts to reduce deficits and make way for a budget surplus by the year 2027. In relation the government will also be urging all state owned enterprises to payer higher dividends as well in order to help reduce the country's debts.

Meanwhile, Bank South Pacific Financial Group Limited has assured the public that there would be no increase in its service fees CEO Robbin Fleming gave the assurance to the public after the treasurer announced the increase on additional company tax on the banking sector.

The Forestry Act 1991 (amended) is under legislative review after 30 years to accommodate the government agendas for the forestry sector, taking into account new and emerging issues in-country as well as globally.

Papua New Guinea Forest Authority (PNGFA) in collaboration with the Constitutional & Law Reform Commission (CLRC) held a lockdown workshop in Port Moresby and went through the draft of the legislative bills on the revised Forestry Act.

Participants at the workshop included directors, managers and legal officers of PNGFA and representatives from CLRC, Office of Legislative Council, Public Solicitor’s Office (PSO) and Department of Treasury.

PNGFA and CLRC will submit the draft bill to PSO through the Department of Justice and Attorney General for them to check and later submit to the Office of the Legislative Council of the Department of Prime Minister and the National Executive Council for endorsement.

The legislative bills drafted were collective views from the different stakeholder workshops that were conducted by PNGFA in 2020.  

The initial Forestry Act 1991 is more focused on logging, therefore in the revised Act new provisions were added to implement government policies such as downstream processing of logs, reforestation and afforestation, carbon trade and establishment of the State Marketing Agency and State Purchase Option for revenue generation, among others.

Managing Director of the National Forest Service Mr. John Mosoro in his opening remarks said that the lockdown workshop to review the Forestry Act is important for PNGFA.

“I was given a task to reform the forestry sector, and the first task of all is to review the Forestry Act 1991 to enable looking into issues of concern and other options for forest management in the country.

“The enactment of the Forestry Act was one of the recommendations of the (Barnett Commission of Enquiry into the forestry sector in the late 1980s and was drafted and approved by Parliament and came into force in 1992 and has been in force for the last 30 years.

“Although there have been a number of amendments made to facilitate implementation of government policies, the review of the Forestry Act has become necessary to accommodate for developmental trends and priorities of the government,” Mr Mosoro said.

He stated that some reasons why the Forestry Act needs to be reviewed include:

Forestry has a strong linkage with other sectors, hence developmental changes in other sectors need to be provided for in the forestry legislation to allow for complimentary and ease of implementing government policies. Climate change initiatives such as Reduced Emissions through Deforestation & Forest Degradation (REDD+) need to be provided for in the forestry legislation as it is an initiative that came about after the current Forestry Act came into being.

Forest resource replacement programs through reforestation and afforestation will be among the major activities to reach 800,000 hectares of planted trees by 2050 as the target set by the government. This program will assist in releasing the current pressure on natural forest harvesting in the country. It is also a tool in addressing issues of climate change both in-country and globally.

Through downstream processing of the country’s forest resources, the government is adamant to realise its full potential benefits. The processed and value-added forest products when exported can bring in increased revenue to the country as well as technological transfer and employment creation.

Mr. Mosoro added that the Forestry sector has the support of the Marape-Rosso Government to re-model it to realize its full potential, hence reviewing the Act is on the right track.

Photo: Musje Werror

The Board of Ok Tedi Mining Ltd announced that it has accepted the resignation of Managing Director and CEO, Musje Werror.

OTML Board Chairman, Dr. Roger Higgins, made the announcement today.

Dr. Higgins thanked Mr Werror for his contribution to Ok Tedi over many years, starting as a graduate trainee, working across all aspects of the business and culminating in his leadership of the company. He wished Mr. Werror every success in his next venture.

The OTML Board will immediately commence the process to recruit the next Managing Director & CEO.

In the meantime, Mark Thompson, who is currently the General Manager Major Projects, has been appointed as the Acting Chief Executive Officer until the permanent incumbent is identified.

Article courtesy of Ok Tedi Mining

Photo: Treasurer Ling-Stuckey delivers the 2023 Budget in Parliament today. Picture courtesy of PARLIAMENT MEDIA

Prime Minister Hon. James Marape says the K590 million in cost-of-living relief, provided for in the biggest-ever K24.567 billion 2023 Budget handed down recently (November 29, 2022) by Treasurer Hon. Ian Ling-Stuckey, shows that it is a “People’s Budget”.

He said this after Treasurer Ling-Stuckey handed down the Budget in Parliament.

“What Treasurer Ling-Stuckey announced today shows that the Pangu Pati Government I lead is caring, responsible and responsive,” PM Marape said.

“The 2023 Budget is truly a ‘People’s Budget.

“Pangu Pati and our coalition partners went into the elections with a commitment to better Papua New Guinea, the people voted for us right throughout the country, and we are now delivering through the 2023 Budget.

“All-in-all, the Budget is tailored towards lifting our country, and is more people-focused than ever before.”

The K590 million relief includes:

• Tax cuts of K63 per fortnight for those earning more than K20,000 per year for 2023. This will be done by temporarily lifting the tax-free threshold to K20,000 at a cost of K280 million;
• K150 million will be provided for reducing fuel prices. All excise taxes on fuels will be removed through to June 30, 2023. This will keep petrol prices down by about 61t per litre, and diesel prices down by 23t per litre; and
• K160 million is allocated for removing school fee project costs in 2023. This is a particularly-important measure to get assistance out to rural areas and families.

PM Marape said it was the first time in PNG’s history for a government to develop a household assistance scheme, to help address some of the cost-of-living pressures such as increased prices for fuel, cooking oil, rice and fertiliser for farmers.

Article courtesy of PM James Marape News Page

The Port Moresby Chamber of Commerce and Industry (POM CCI) held its 67th Annual General Meeting at the Lamana Hotel on the 24th of November 2022 , present to witness the occasion were its members, executives and various stakeholders. 

The meeting was officially opened by the President and Master of Ceremony Mr. Rio Fiocco who gave his opening remarks and report. He thanked all the POM CCI staff for their hard work this year despite the challenges faced by covid and other changes in the administration. Some of their achievements highlighted included the recruitment of two graduate accountants from the IBS University and the employment of its new membership officer.

Mr. Rio Fiocco stated that by 2023 the chamber will be working with Total PNG to pre-qualify its members to be contracted to early works stage of the Papua LNG project .

"All members who have issues affecting their business can feel free to come and see us so we can lobby for you through NCD or if it  government related we will also lobby for you through the PNG Chamber of Commerce and Industry", said Mr. Rio Fiocco. 

The treasurer of POM CCI Ms. Akae Beach presented the chambers Financial Report stating that it had made a net surplus of k114,020 which is a 12% net profit margin despite not recouping most of its membership fees. 

"The Port Moresby Chamber of Commerce and Industry Inc is in good financial position and our net asset stand at K1.49m compared with K1.38m last year , a healthy increase of 8 %. Whilst conditions remain challenging , I am confident that the chamber will continue to be in overall surplus in 2022 as we continue maintaining our current strategy ( with an increase focus on both the Corporate and SME sectors) whilst continuous improvement in our financial systems,  increase online and physical marketing efforts and increase member initiatives" stated Ms. Akea Beach.

Ms. Akae Beach concluded that she will be leaving the chamber by the end of the year but will still support the chamber within her own capacity. 

Photo: PM Marape and Governor Bird in discussions with representatives of Pacific Elite Palm Oil Group in Singapore on Monday (November 21, 2022).

Prime Minister Hon. James Marape has given his support to development of the oil palm industry in Papua New Guinea on a massive scale.

PM Marape gave his support after he and East Sepik Governor, Hon. Allan Bird, met with representatives of Pacific Elite Palm Oil Group in Singapore on Monday (November 21, 2022).

The company currently runs an oil palm project in East Sepik, which it wants to emulate in all provinces, saying that it will be an economic gamechanger for the whole country.

The company aims to create the largest agriculture-based wealth in the South Pacific, as well as generate electricity for PNG, using oil palm.

Governor Bird told PM Marape that if a long-term oil palm development plan was drawn up, with the aim of economic independence for PNG, one million hectares of oil palm grown all over PNG would bring in an extra K100 billion for the country.

“We can double our GDP just from palm oil,” he said.

“If we go into downstream processing, this K100 billion could double, so that we could be earning K200 billion on top of our current GDP.

“The other flow-on to the economy is power production that fits into the grid, carbon credits, increased cattle production, as well as jobs.

“Palm oil is amazing because you can do so much with it, including green energy, which can be generated from the waste of palm oil.

“If we have 33 operations throughout PNG, similar to what we are doing in East Sepik, 100,000 jobs would be created

“This is brilliant.”

Governor Bird told PM Marape that oil palm, when made into biofuel, would save the country millions of kina.

“If we produce enough palm oil, we don’t need to go out and buy fuel, as we can produce our own,” he said.

“It can also bring inflation down as we are no longer importing inflation.

“I’m excited because it provides us an escape plan from all these things that are affecting us.”

PM Marape welcomed the proposal by Pacific Elite Palm Oil Group and the ideas of Governor Bird, who has helped to grown the vanilla and cocoa industries in East Sepik, and PNG.

“As regards expanding nationwide, I invite you to come to Port Moresby, and I will run the investment figures past the super funds and Kumul Consolidated Holdings,” he told the company’s spokesperson Alexander Tho.

“A family of investors can easily mobilise the money required for the project.

“I also want you to have a stake in the business, and run it, as we cannot do it on our own, in like what Barrick is doing at Porgera Mine.”