Twinza's Pasca is the topic of negotiations. According to Petroleum Minister Kerenga Kua, a plant in the Gulf is currently underway.

Kua predicted that reaching an agreement on the country's first offshore oil project would take some time.

“(Project) still under negotiations,” he said. “Generally, it could take a few years to negotiate an agreed position. Once in a while, it takes less time. Patience is important to all sides.”

Twinza has previously stated that the talks were over the fiscal terms for the construction of the gas-condensate field in the Gulf of Papua.

“The company is committed to working collaboratively with the Government to deliver an agreement that allows the project to move forward toward development, while providing a higher state take than previous projects,” country manager Roppe Uyassi said. “Once the Pasca A gas agreement and the petroleum development license are in place, the project is well-positioned to enter the front-end engineering and design phase later this year.”

Twinza was also excited to discuss significant non-financial prospects with the SNT, such as domestic business commitment, third-party access to infrastructure, and national material.

“These matters were differentiated from land-based projects as Pasca A field is planned to be the first offshore development in PNG.”

Meanwhile, according to company records, Twinza's main asset is the offshore Pasca A liquids-rich gas field. The Pasca A field development plan had been completed, the petroleum inventory had been approved, and the program to receive full-field development licenses had been completed.

The Pasca A development will become the country's first offshore field development after all requisite government approvals are issued.

A flight from Australia has arrived in Papua New Guinea with the first shipment of COVID-19 vaccines as well as experts to support local experts in responding to the virus.

The first supply of vaccines for frontline health staff was made on Tuesday, March 23rd, with an initial rollout for the National Capital District.

In addition to AUSMAT experts, the RAAF flight carried three mobile storage units to help with the vaccine rollout, as well as five group tents that served as triaging areas, reception centres, and clinic rooms.

Australia is collaborating with Papua New Guinea to promote the government's response to a worrying increase in COVID-19 cases, in order to save lives and support the health sector of its nearest neighbour.

The Australian government has decided to assist PNG and will work with it to develop a robust support program to aid the country's response to the crisis.

A forward team of three AUSMAT health experts is being sent to Port Moresby by Australia.

Infection prevention, triage and emergency response, and public health interventions will be discussed with Papua New Guinean health officials.

The deployed AUSMAT, according to a statement from the Australian High Commission in PNG, would adhere to quarantine agreements reached with the PNG government.

The government of Papua New Guinea will assess future goals.

After PNG declined to renew a special mining lease (SML), the mine was shut down about a year ago. Barrick Niugini is appealing both the rejection and PNG's August decision to grant an SML to state-owned Kumul Minerals Holdings.

President and CEO Mark Bristow said in Barrick's annual report issued last week that the company had signed an in-principle deal with the government on the re-opening and potential service of Porgera in the fourth quarter.

"Teams from both sides continue to work on the details of a mutually acceptable settlement agreement," he said. "This has been a long and difficult negotiation, but I am optimistic that we will reach an agreement and get the mine re-opened this year."

The excitement was echoed in Zijin Mining's annual numbers, which were published over the weekend.

"Having all relevant parties' interests in mind, the company is striving for renewal of the mining lease of the Porgera gold mine in Papua New Guinea and resumption of production," Zijin said.

Late last year, Bristow flew to PNG for talks with Prime Minister James Marape, who was under pressure to get a better return on the country's capital.

Porgera has been removed from Barrick's production forecast of 4.4-4.7 million ounces of gold for the time being.

Porgera's share of output in 2019 was 284,000 ounces of gold, at all-in sustaining costs of US$1,003/oz, according to the Canadian miner.

Both Barrick and Zijin own 47.5 per cent of Porgera, with the Enga provincial government and landowners holding the remaining 5%.

Meanwhile, PNG is dealing with an increase in COVID-19 incidents, prompting Australia to announce a fortnight-long travel ban between the two countries last week.

Newcrest Mining, headquartered in Australia, said that no disruption to gold production at its Lihir mine was planned at this time and that it was consulting with the government to better grasp the specifics of the travel ban and to assess and minimize any possible effects.

Similarly, K92 Mining, based in Canada, said the ban was unlikely to have a substantial effect on production at its Kainantu operations, though certain non-production-related activities may be affected.

K92 CEO John Lewins told Mining Journal's sister publication PNG Report that the company had seen no positive cases across its quarantine scheme for the first nine months, but had discovered 15 in the last four weeks.

The National Superannuation Fund Limited (Nasfund) is delighted to release its full-year 2020 findings.

The audited results for the year ended December 31, 2020, as reviewed by the Board at its meeting, included a Net Profit of K222.9 million and a Net Asset Value of K5.57 billion.

Following these findings, the Nasfund Board of Directors approved a 4.5 per cent interest-crediting rate for the 2020 Financial Year, amounting to over K235 million, which has already been credited to members' accounts.

On behalf of the Board, Chairman Charles Vee indicated that the findings reflected the Fund's most difficult year to date, especially in light of the weakened economy and the effects of the COVID-19 pandemic.

“In response to these headwinds, I am pleased that the Fund has demonstrated once again strong resilience and exceeded its budgeted cash profit after tax of K266 million by K15 million due to tight control on operating expenses and lower tax costs,” he said. “The pandemic and other external factors beyond our control adversely impacted the economy which resulted in valuation losses of K155 million across our property and equities investments, including K38 million in additional provisions to comply with international accounting standards (IFRS 9), which was partially offset by foreign exchange gain of K97 million due to the Kina depreciating against other currencies. This resulted in an overall net valuation loss of K58 million which represents an additional 1.10 per cent crediting rate, members have missed out on. While the crediting rate of 4.5% has been achieved for our members, we remind members again of the benefit of locking away savings over a long period.  The value of a member’s savings grows significantly through the effect of compound interest and additional contributions. I am pleased to inform our members that we continue to meet our investment target of achieving returns above CPI over a rolling five year period which on average is 5.7 per cent compared to CPI average of 5.4 per cent over the same time. Additionally, over the last five years, Nasfund has paid over K1.27 billion in interest to members and paid out K2.18 billion in superannuation entitlements to its members. We remind members that your long term Nasfund savings does have its benefits to ensure a comfortable retirement after active employment.”

Other highlights for 2020 include:

• Contribution receipts increased by 2%, totalling K575 million.
• The membership base has grown by 3% to 604,587 contributors.
• The number of employers has increased by 7% to 2,576.
• Superannuation withdrawals increased by 22% to K469 million, compared to K384 million in the budget.
• The launch of a new logo.
• The opening of a new Member Services Center in Waigani, NCD, with plans to expand to Lae.
• Hagen and Goroka headquarters are being refurbished.
• A Memorandum of Understanding was signed with the Provincial Government of East Sepik to provide superannuation services to cocoa and vanilla farmers.
• The third Employer Awards Evening was a huge success.

“In 2021, we are continuing our focus on enhancing our member services, including housing developments while actively seeking to grow our membership and new investment opportunities,” Vee said. “I would like to acknowledge the commitment of our CEO Ian Tarutia, the management team and staff for their hard work and support in delivering commendable results in 2020.”

CEO Ian Tarutia said, “During this period of uncertainty, a lot of our employers had to take drastic action to keep afloat. Labour shedding and workforce rationalizing were initiatives taken by employers to remain operational during the COVID State of Emergency imposed last year. Additionally, fall in Oil Prices and the closure of Porgera Mine impacted companies like Oilsearch and Barrick Joint Venture and resulted in a large number of employees being laid off. As a consequence, while this placed pressure on our member services due to the increased volume of applications and enquiries, I am pleased to inform you that we paid all clean applications as and when they became due. On this note I commend our staff for their professionalism and empathy to meet member demands, during these trying times. I also acknowledge those members opting to not withdraw all their savings, managing themselves through other means and retaining a portion for their future benefit.”  

Tarutia also warned that, while withdrawals in 2020 were well managed, if Porgera is not opened in the near future and other major resource projects are not launched to stimulate the economy, more job losses will occur, and we may see a surge in withdrawals this year that exceeds what we paid in 2020.

He added, “COVID-19 prevention and containment requires distancing from one another. This is a problem for our members as a majority do not have their own homes and live with extended family. Secondly, we are already experiencing the inadequacies of our current health system, as COVID-19 transmission rates escalate throughout the country. We already know how to grow members wealth, we have been doing this successfully since 2000 through late Sir Mekere’s superannuation reforms. Now it is timely to look at how we can assist members with quality homes they can afford. Not just release some of their retirement savings for housing, but provide a whole house, land package. The target audience will be first home buyers only. We should also be looking at investments in the health sector to look after members and their families when they are ill. A lot of our members are dying from preventable diseases. What is the point of saving for retirement when their health cannot be looked after?” 

K92 Mining said that the corporation, as well as the resource sector, is worried about the rise in Covid-19 cases in the nation.

According to John Lewins, the company's CEO, it has the potential to have a huge impact on PNG's entire resource industry and, by extension, the rest of the economy.

“While the major concern should be the health and wellbeing of all people, the ability of the resource industry to maintain operations is critical to the ability of the Government to combat the pandemic,” he said. “Remember that the resource industry is the major driver for the PNG economy accounting for almost 30 per cent of the GDP (gross domestic product) and over 80 per cent of exports. The sector also provides more than 20,000 jobs to Papua New Guineans, while 30,000 more are employed in landowner businesses, and other PNG businesses that support the industry.”

Some of the potential effects are the following:

• Due to constraints or a lack of aircraft, PNG workers are unable to travel from their homes to the mine sites; 
• Skilled expatriate workers are unable to travel to PNG.

For the next two weeks, Australia has stopped the movement of fly-in-fly-out personnel.

If this trend persists, it will be impossible to keep the resource sector running safely without these skilled employees, and all operations will be forced to shut down.

• Covid-19 infection among skilled PNG workers, causing them to be unable to work for short or long periods of time;
• Locals are worried about the Covid-19 being brought in by "outsiders," causing unrest.
• Transportation of supplies and equipment between provinces is restricted;
• Delays in the release of products and equipment from ports;
• Impact of the Covid-19 on PNG Powe and all manufacturers and contractors
• PNG Power, fuel suppliers, trucking firms, and maintenance contractors are all affected by the Covid-19, as are supply chain matters from foreign vendors.

“Keeping the resource industry operating is of major importance to PNG as it is the major contributor to the economy and if this is impacted or stops, this will obviously have a massive impact on the PNG economy,” Lewins said. “Imagine the equivalent of another 10 Porgera mines stopping production, tens of thousands of jobs (K92 alone has over 1,000 employees and contractors), hundreds of millions in lost taxes and royalties, loss of business for suppliers, contractors, trucking companies and the like plus impacts on local communities. The potential impact on the economy in turn affects the ability of the Papua New Guinea Government to combat the pandemic.”

According to K92 Mine Inc, the falling worldwide gold price means that mining companies in the country will reduce non-essential spending, which would have an effect on suppliers.

John Lewins, the company's CEO, was responding to questions about existing gold prices.

He added that the gold price began the year at around US$1,950 per ounce (K6,694.49/oz) and has since declined to around US$1,730 per ounce (K5,939.21/oz).

According to him, mines may postpone capital and expansion projects, reducing jobs and production growth.

“Any movement in the gold price affects the gold mines in PNG,” Lewins said. “The average ‘all-in sustaining cost’ of production for PNG mines is around US$1,000/oz (K3,433.07/oz) to US$1,100/oz (K3,776.38/oz), so at current prices, all the mines in PNG are still operating with good margins. Lower margins, mean lower profits, less tax to Government, less money spent on exploration and capital and lower royalty payments to communities and Government. The other point to note is that the Australian dollar has strengthened against the US dollar, so the gold price in Australian dollars has dropped even more, from AU$2,700 (K7,177.11) late last year to currently AU$2,100 (K5,582.20). Given that a lot of the costs incurred by PNG gold mines are in Australian dollars, this is probably more important than the US dollar price movement.”

According to Lewins, the gold price will remain under pressure for the first half of this year, but will possibly recover in the second half.

“Much depends on the performance of the US economy and others, following the shutdown caused by the Covid-19 pandemic,” he said.

The price of gold is expected to fall in 2021 for a variety of reasons:

• Central banks' physical demand for gold has declined; 
• Jewellery sales have been underwhelming as the covid-19 pandemic has stifled customer activity;
• Investors' "lack of interest" in buying gold has also been a source of market stress;
• Gold has been sold by a number of hedge funds; and
• The US dollar has strengthened, implying a drop in gold prices; and, growing interest in alternative investments such as Bitcoin.

“It should be remembered that the gold price is still at a very high price relative to the average price over the last five years,” Lewins said.

According to an official, the Wafi-Golpu Joint Venture (WGJV) will follow the proper procedures before its application for special mining lease 10 is approved.

David Masani, WGJV's principal community engagement advisor, stated this during the company's numerous scheduled meetings with communities that would be impacted by the K18.4 billion gold-copper project.

People were using mainstream and social media to speak about the advantages and procedures, according to Masani.

“Our province is jumping ahead in the process, talking about benefits, businesses and contracts,” he said. “We are not following due process; the mandated process by the government.”

Moses Mambu, a representative of the Mineral Resource Authority, explained that the environmental permit was just one step in a longer phase.

“An environment permit does not mean the company can now develop this project,” he said.

According to Mambu, the application for SML 10 that was submitted in August 2016 is still with the government and will go through a rigorous process before being granted.

A mining development contract will be signed, and a memorandum of agreement (MoA) will be developed through a developmental forum between the national, provincial, and local governments, landowners, and WGJV.

“This agreement is yet to eventuate,” he said. “And two key benefits to be discussed under this agreement are royalties and equity. These are only for people living along with the pipeline footprint, SML area or the tailings outfall.”

The fiscal stability agreement and the State equity acquisition agreement, according to Mambu, are two other agreements that need to be achieved.

“Such things are to be considered before granting the SML,” he said.

With the recent rise in COVID-19 positive cases in PNG, peak bodies representing industry, the private sector, and development partners are urging their members to take the lead in promoting and enforcing necessary virus prevention protocols.

In a joint statement released recently, the PNG Chamber of Commerce and Industry (PNGCCI) and the Business Council of PNG (BCPNG) reminded businesses to introduce the Niupela Pasin (New Normal) at every workplace.

The Niupela Pasin contains the following steps to protect staff, customers, and the general public at all workplaces.

• Stay at home if you're sick.
• Don't bother going to work. Do not mingle. 
• Call the COVID-19 Hotline at 1-800200 if you have a fever, cough, sore throat, or trouble breathing. If you've been told to self-isolate, you should do so right away. 
• Maintain a distance of at least 1.5 meters between yourself, your coworkers, and your clients.
• No handshakes or fist bumps! Simply welcome each other with a smile, a nod, or a quick hello
• Door handles, phones, keyboards, elevator keys, kitchens, and bathrooms should all be cleaned and disinfected on a regular basis.
• Hands should be washed regularly with soap and water, or an alcohol-based sanitizer should be used.
• Sneeze and cough into your elbow, or use a tissue and throw it away as soon as possible.
• Reduce the amount of time people spend in the workplace. Limit wide in-person meetings and instead conduct them over the phone or over the internet.
• To protect yourself and others, wear a face mask or face covering in all public places.
• Work with your physicians to figure out how to stay safe whether you're worried about your health or have underlying medical conditions.

“These are measures that are now a normal part of life in the New Normal,” it said. “As the voice of business, the private sector and development partners, we remind all our members to ensure that all measures are taken to protect everyone from COVID-19. This is a shared responsibility, which we all must play our part in addressing. Given the recent spike in community transmission resulting in increased positive COVID-19 cases being reported, and the continued constraints faced by our health facilities, it is important that we take the lead in promoting, and practising COVID-19 prevention protocols,”

The availability of foreign currency is crucial for promoting trade and enabling companies to continue importing goods for consumer consumption.

It's also essential for investors to know that returns on capital investments can be repatriated if and when enough foreign currency is available in the country, according to Bank South Pacific CEO Robin Fleming.

When asked if there is a continuing foreign currency shortage in the country, he said that while foreign currency issues are likely to continue for another two to three years, the prospects for a rebalancing of foreign currency supply and demand are optimistic once construction work on the Papua LNG begins.

“Businesses have conditioned themselves to not being able to access foreign currency in a timely manner.,” he said. “But in doing so they have in certain instances forgone growth opportunities and put aside larger investments that would have assisted grow their business.”

While reflecting on the rise in COVID-19 cases, Fleming noted that many companies will be worried about the growing number of positive cases.

In response to a query about the BSP status, he claimed that their regional businesses have had to deal with the effects of COVID in each of their countries, with travel restrictions affecting their tourist-related industries.

In what he described as a difficult year, he said most people did reasonably well.

“Our focus in 2021 is to bring our new banking system online in Vanuatu and PNG in 2021 and other countries thereafter,” Fleming said.

The Australian Government's ban on incoming and outgoing travel between the neighbouring countries is expected to have no effect on Newcrest Mining's Lihir gold activity in Papua New Guinea (PNG).

The Lihir operation is undergoing a scheduled maintenance shutdown and is steadily resuming operations.

Newcrest stated that it was working closely with the Australian Government to prevent any possible impacts from the ban.

“There is currently no anticipated interruption to gold production arising as a result of the travel suspension,” Newcrest stated.

A "tiny number of COVID-19 cases" has been recorded among the gold miner's PNG employees, who are being monitored and assisted by medical personnel in quarantine.

“Strict hygiene, social distancing and other COVID-19 management protocols remain in place at Lihir with comprehensive testing, quarantine and precautionary contact tracing procedures enforced,” Newcrest stated. “Lihir has a dedicated isolation camp and separate isolation and treatment facility where care and support can be provided.”

From the 2023 financial year onwards, Newcrest hopes to place Lihir as a one-million-ounce-per-annum gold producer.

As COVID-19 cases in PNG rise, Australia's Prime Minister Scott Morrison suspended fly-in, fly-out (FIFO) staff from flying in and out of the country as part of a broader travel ban. Australia has banned all outbound travel exemptions to Papua New Guinea, according to Morrison.

“This will include no general FIFO work. If you’re there, you stay. If you’re here, you stay,” he said. “We cannot risk people going into those areas and back to Australia.”

Prior to the ban, Ok Tedi Mining, a Papua New Guinea miner, imposed a two-week suspension on its international charter flights last week after its staff tested positive for COVID-19 during hotel quarantine in Cairns.

After completing the quarantine time, Ok Tedi's quarantined employees were released. 

COVID-19 has forced Ok Tedi Mining Limited (OTML) to pause operations in order to protect its employees, communities, and operations.

Due to a recent increase in COVID-19 cases at the mine site and in Papua New Guinea, OTML will temporarily pause operations on Friday, March 19th for 14 days to prevent further virus transmission within its operations.

This suspension, according to OTML, coincides with the PNG government's National Isolation Strategy, which will go into effect on Monday, March 22nd. The success of the control steps, as well as when the virus has been contained, will decide when regular operations will resume.

The decision to halt operations reflects OTML's commitment to take all reasonable steps to ensure the protection, health, and well-being of its staff, families, contractors, and host communities, as well as to allow a stable, cost-effective, and timely resumption of operations for the benefit of all stakeholders.

During the suspension, the organization will take steps such as repatriating non-essential workers to their home provinces and introducing a mass testing program for its staff.

Any staff may be forced to work regular hours during the suspension of operations in order to maintain essential services or for treatment and maintenance. The suspension is expected to result in a revenue loss of about PGK210 million, which will have a direct effect on foreign currency inflows into PNG.

Meanwhile, the Company is weighing its options in light of the Australian government's decision to temporarily halt the fly-in and fly-out of mineworkers based in Australia.

It said, “We do not anticipate significant disruption to our operations as a result of the Australian  Government’s announcement, however, we are looking at alternative ways to repatriate  several of our expatriate employees during the suspension of operations.”  

After COVID-19 cases were discovered in Queensland from international travellers in hotel quarantine, the company declared that it was suspending international charter flights into Australia. OTML hires over 1,800 people directly, with less than 4% of them being expatriates.

OTML also confirmed that it would collaborate with the PNG government to help with vaccine procurement and distribution for OTML employees.

PNG Biomass is Oil Search’s renewable energy and sustainable tree farming business. The project is still subject to a final investment decision by Oil Search, now planned to take place in the second half of the year.

The formal ‘go-ahead' has been postponed several times due to a lengthy process with the PNG government to fulfil their promises to move the project forward. Oil Search will shift the project rapidly into construction once the PNG government addresses the final outstanding issues, adding 30 megawatts of renewable, affordable, and clean energy to the Ramu grid and Lae businesses.

Michael Henson, Project Director of PNG Biomass, said, “We designed PNG Biomass with a two-fold purpose; we will power the Ramu Grid with low-emission renewable energy, and to do that we use an inclusive economic growth model to empower communities to maximise benefits for them. The value we create with PNG Biomass is shared between landowners, communities, women, youth, future generations, local and regional businesses, provincial and national government, and Oil Search. This is a  great example of creating shared value. This project is equally a sustainable investment for Oil Search in the  energy transition and investment in the people and prosperity of PNG.” 

Henson said that it is now time to realise the benefits of this project. “Over the last year, we have expanded our tree farm to 3,000 hectares. We signed the long-term lease with the landowners of the power plant land and just finished clearing the power plant site, we are ready to commence construction. In the next few months, boreholes will be drilled to supply water to the power plant. We just need the Government to deliver on its commitments to move this project forward,”  stated Henson.  

He added, “Landowners of the Ganef community were glad to see us clear the site, but they are getting restless. They have committed their land to build the power plant, but construction has not commenced yet. We reach out to them daily to provide information and explain the delays, but it is difficult to explain the bureaucracy and politics in PNG. Fortunately, we have a great working relationship with our communities. The Ganef landowners are thankful for the borehole we drilled in their community. We also installed a solar pump and water tank so they now have a fresh water supply.” 

After reporting a Core Operating Profit of K25.66 million for the 2020 financial year, Credit Corporation PNG has posted a net profit of K22 million.

Credit Corporation CEO Peter Aitsi released the 2020 results, saying it represents the complexities of the COVID-19 pandemic during the year, as well as the group's determination to actively support PNG's SME business through these initiatives.

Higher impairment charges as a result of a drop in economic activity across the Pacific and internationally have had a major effect on earnings.

Despite the challenges of FY20, the group's balance sheet remained solid.

The group's liquidity position improved by 64% to K230 million, funding rose by 3%, and the loan-to-deposit ratio improved to 92 per cent.

The company is well-capitalized, with a liquidity and financing matrix that far exceeds regulatory requirements.

The overall risk-weighted capital ratio rose to 32.6 per cent during this period.

Due to the conservative approach to lending in the current climate, gross loan receivables (net of unearned interest) decreased by K54 million in 2020.

Although stressed exposures as a percentage of gross loans increased, the group took a cautious approach by raising impairment provisions from K64 million to K119 million.

In June 2020, the board announced a final dividend of 12 toea per share for 2019. This equated to a 7.1 per cent dividend yield.

Given the economic uncertainty, the board agreed not to pay an interim dividend for the 2020 fiscal year.

Aitsi said the challenges posed by the COVID-19 pandemic from the start of the second quarter to the end of the financial year had placed the company in an unprecedented position.

“2020 has been an abnormal and unprecedented reporting period for us and for many others,” he said. “During the period, governments of countries where the group operates focused on preventive measures to keep people safe.

Although essential, these restrictive measures led significantly to a decline in business activity.

“Our immediate focus was to ensure the wellbeing of our people and our customers in addition to doing what we could to assist our customers experiencing financial challenges as a result of the COVID-19 situation,” he said. “I am proud of how we all pulled together to deliver service to our customers, and our businesses remained operational throughout this situation. We continue to make positive changes within the group to refocus on our core businesses and key markets, and to improve the group’s performance.”

As the global and local economies recover, the group remains focused on maintaining a healthy balance sheet that offers a solid foundation for taking full advantage of growth opportunities.

Importantly, with the economy projected to grow slightly in 2021, Credit Corporation is well-positioned to continue to serve customers and recover from the uncertainties of 2020.

According to the National Research Institute, given Bougainville's position within the Pacific Rim of Fire, the possibilities for mining various minerals, especially gold and copper, are vast (NRI).

Following the collapse of the Panguna mine, NRI noted in a recent report on Bougainville that regaining foreign investor trust in mining in Bougainville was proving difficult.

“Even more difficult is the effective management of the revenues from the sale of public resources such as minerals, forestry and fishing, which has long been a challenging problem for developing countries,” the report highlighted. “The primary management problem has been with the effective expenditure of resource revenues. Therefore, a major issue for discussion in Bougainville should be on whether institutional arrangements can be devised that will ensure that the resource revenues collected by the ABG – from, say, fishing, forestry or mining – will be put to good use in developing the economy.”

It continued, “We have argued for a management system where a share of mineral rents are directly paid to the public in the form of compensation for the sale of their asset. This has several advantages, including the fact that such transfers will bind the public across space and generations, concentrate attention on the returns from publicly owned assets, and create economic spillovers in the form of increased output and revenues for the budget. The model used in Alaska to manage the collection and distribution of its oil and gas revenues seems to be very worthy of consideration by Bougainville. This regime establishes a political constituency with an interest in protecting the revenues from corruption, waste, and so forth. If Bougainville is to adopt a policy of this kind, the nature of politics dictates that it should be done as soon as possible. Otherwise, if an alternative policy is adopted, it will be impossible to dismantle later as it will have formed its own constituency by then.”

According to a study by the National Research Institute (NRI), the investments needed to increase the tax base for the Autonomous Bougainville Government (ABG) require significant upfront investments.

The report said that increasing revenues for the Bougainville Government, public expenditures also necessitate capacity to prepare, budget, execute, and track them: Bougainville is on the verge of collapsing.

“And absent such large and lumpy investments early, Bougainville will not be able to acquire fiscal independence,” it said. “ABG will need foreign funds and expatriate expertise to create the conditions for a transition to economic independence. Bougainville will need visionary leadership and considered support from the PNG Government. There is hope on both these fronts. Bougainville is rich in natural resources and can use that to attract foreign investments for technology transfer, capital injection, employment generation, market access and exports. Several water fishing nations are already operating in Bougainville waters. Attracting a foreign investor to engage in onshore tuna processing, as undertaken in Wewak on the mainland and across in the Solomon Islands, has the potential to generate much needed formal sector employment. Richer still are the known mineral deposits that have the potential to attract foreign investment. But that would be tricky given the history of Bougainville Copper Ltd, and the issues of the compensation for the environmental damage done and compensation for the decade-long conflict. Leadership and planning is necessary to navigate these obstacles to restarting the mine, that could boost revenues for the budget and provide returns to the people who ultimately own the resources.”

According to the report, Bougainville should concentrate on: Introducing land administration systems and town planning; Enhancing contract protection, including land titles, mining leases, and potential income from private investment; and Lowering sovereign risk with regard to investments in Bougainville in relation to the rest of PNG.

According to PNG Manufacturers Council chief executive officer Chey Scovell, businesses support the urgent need to stop the current spread of the Covid-19 but agree that a full-scale, literal lockdown isn't feasible in Papua New Guinea.

When asked whether companies were preparing for a lockdown due to the increase in Covid-19 incidents, Scovell said yes.

“This depends on what you mean by ‘prepared’,” he said.“Can they physically stop operating and send all staff home, yes? However, manufacturers are not responsible for filling up warehouses (in stores), if we close manufacturers, shelves run empty. If we close shops, people can’t make any purchases.”

According to Scovell, PNG's capacity for home delivery services is inadequate, and most people lack the opportunity to stock up on supplies for two to four weeks.

He said that while manufacturers continued to provide healthy work environments for workers to protect against the Covid-19 and reduce the risk of infection, they were unable to implement all safety procedures and behaviours.

The reality is that we are now in stage three,” he said. “Movements should already be restricted, it’s simply not being enforced at all, in any way.”

For Scovell, restricting mobility was necessary but not always feasible because many facilities required staff to travel and people needed to move as well.

“We support the guidelines and the restrictions under each stage,” he said. “We would ask that rules be followed and enforced. Our manufacturers have put in place measures to comply with the rules. It’s outside the workplace that rules are not being followed.”

Only critical staff were required to attend work during stages three and four, according to Scovell, but this was not the case.

“In my membership, they are working in rotations, working from home, have made substantial changes to their work layouts to ensure distancing,” he said. “The Government lacks the capacity to effectively enforce the guidelines.”

He claimed that because the government lacked sufficient workers (police, health workers, teachers, etc.) for the country, expecting the police to effectively enforce the rules was impractical.

We each have to play our part,” he said. “Maybe a hotline for workers and customers to report non-compliance would assist, but even then it would still be a challenge for the government to visit and penalise those that aren’t complying.”

To manage the effect of the Covid-19 on businesses and people's lives, Scovell said constant knowledge, leadership from politicians and bureaucrats, and vigilance from the public were needed.

Kina Bank has pledged support for the second consecutive year to the FODE education program administered by the Kokoda Track Foundation at the Motu Koita FODE centre in Port Moresby. The bank is funding the FODE program and providing mentoring by bank staff to students enrolled at the centre.

The one-on-one mentoring program offers students the opportunity to connect with young and seasoned professionals across the bank who provide coaching, and help with their studies, assessments and to prepare for exams. Building on the success of last year, students have direct personal access to a mentor who can guide them on their path to success and help them reach their goals.

"Our partnership with Kina Bank is that in every sense of the word. From vital financial support, to their innovative volunteer mentoring program and all of the 'small' ways they assist our work in between, we are proud to partner with Kina Bank and are delighted to continue developing our partnership this year," said KTF CEO, Dr Genevieve Nelson.

"In these challenging times, we are poised to deliver a full year of learning to our students, committed to the safety of our students and staff. We are fortunate to have an incredible partner like Kina Bank by our side on this education journey."

Kokoda Track Foundation reported to have enrolled 150, an increase in numbers from 2020. “Continuing the partnership with the Foundation for Motu Koita FODE was an easy decision for us, building further on the success of the previous year and to see through some of the students in grades 10 and 11 mentored last year,” said Greg Pawson Kina Bank Chief Executive Officer.

“The bank is committed to helping create the workforce of the future by supporting the learning and development of young people in Papua New Guinea. Initiatives such as the Motu Koita FODE program gives a second chance to young people to attain high school certification and progress to higher education and eventually transition into employment with skills and qualifications. At Kina Bank we’re committed to supporting our communities.”

Bank South Pacific (BSP) is thinking of being listed on the Australian stock exchange (ASX).

Sir Kostas Constantinou, chairman of the bank's board of directors, said the bank intended to call a special meeting of shareholders to seek approval for amendments to its constitution that would allow BSP to apply to join the ASX's official list.

It would be able to obtain dual listing as a result of this.

It's also on the Papua New Guinea stock exchange (PNGX).

“The notice of the meeting is currently subject to advise and approvals, which are expected to be finalised during March 2021,” Sir Kostas said.

The aim of the planned ASX listing, according to BSP Group CEO Robin Fleming, is to gain access to new sources of capital on Australia's main exchange.

“While BSP has been listed since 2003 on the PNGX, there are a number of constraints that BSP faces in sourcing new forms of equity capital,” he said. “Accordingly, BSP is pursuing the proposed listing as a means of mitigating some of these constraints. Access to new sources of capital will allow BSP to explore future growth opportunities. Another benefit of joining the ASX is that it will facilitate increased liquidity for BSP’s shareholders (trading of BSP shares). The ASX is a much deeper (larger pool of investors) and (more) active market than the PNGX. Accordingly, shareholders will find it easier to trade BSP shares on the ASX.”

BSP's visibility would increase if it joined the ASX, according to Fleming.

“It will provide the opportunity to better educate the international marketplace in relation to BSP and PNG,” he said.

The Kina Asset Management Ltd (KAML) made a net profit of K3.32 million for the year ended December 31, 2020, thanks to a 6.2 per cent investment return.

The achievement was made amid the Covid-19 pandemic and continuing geopolitical conflicts, according to KAML chairman Sir Rabbie Namaliu.

Sir Rabbie praised KAML's investment strategy's diversification for providing a substantial measure of stability in a tumultuous year.

He said, “Asset allocation was maintained close to the preferred portfolio asset weights of 40 per cent domestic/60 per cent international, the latter being held in Australian stocks and global indexed funds. For KAML, this meant overall capital losses were more than offset by dividend and interest income and strong foreign exchange gains. Bank of South Pacific, KAML’s core domestic shareholding, comprising nearly 20 per cent of the portfolio, generated a return of 13.3m per cent for the year. Credit Corporation also performed strongly.”

Sir Rabbie, on the other hand, reported that Oil Quest and Kina Securities had experienced major reversals.

“Oil Search, badly affected by the pandemic-related fall in the global demand for oil, reported a negative return for the fund of -39.6 per cent,” he said. “Offshore, the recovery in Australia was less strong than in other markets, notably the United States. The year ended with modest overall capital losses on the Australian component of the portfolio, but the strength of the Australian dollar and a series of gradual reductions in the PGK/USD trading band by the Bank of PNG, more than offset this.”

Sir Rabbie reported that the net tangible asset backing per share was K1.59 as of December 31.

“However, KAML’s price of K0.90 per share represented a substantial discount to the underlying value of the company,” he said. 

Work on a K4 million solar project to cover all wards in the Duke of York Islands local level government (LLG), Kokopo, East New Britain (ENB), is set to start in June.

This was announced by Francis Uratun, director of PNG Power Ltd (PPL), who recently travelled to the Duke of York Islands to finalize project documents for submission to AusAid.

AusAid will fund the project.

Uratun said, “This will be the first solar power project to be rolled out by PPL under its rural electrification programme. The project is an initiative of Kokopo MP Emil Tammur who has been negotiating with PPL for the past 18 months. The negotiation for the project between Tammur, PPL and AusAid has been a long process and this trip to the islands will complete the final process, including gauging the views of the communities, especially women and youths. The PPL team is expected to submit a detailed and final proposal to AustAid this month before funding can be made available. The project proposal is to set up four solar farms in various locations on the island to supply 50 kilowatts of power.”

In the Southern Highlands Province, K10 million has been set aside for agriculture growth. 

Agriculture is the backbone of any economy, according to Southern Highlands agriculture advisor Kenneth Kuimp, so growing it in the province is a step in the right direction. He said that the province is embracing change and that agriculture is the driving force behind growth.

“We are pleased to receive a K10 million funding from the provincial government to develop agriculture in the province,” he said. “Currently with the support of Fresh Produce Development Agency and Innovative Agro Industry, a chips factory has been established and this will help push the provincial authority to roll-out agricultural programs and interventions.”

The province is currently implementing the potato seedlings initiative, according to Kuimp, which is in line with other projects in the works.

“We are looking at rolling out other projects like coffee, potatoes and inland fisheries, fresh fruits and vegetables and other agriculture projects,” he said. 

The province's agriculture sector has been ignored for a long time, but Governor William Powi and provincial administrator Joseph Cajetan have recognized agriculture as a catalyst for change and have committed K10 million in funding from the Southern Highlands provincial government budget. The agriculture program, according to Kuimp, will be implemented in the five districts of Mendi Munihu, Imbonggu, Ialibu-Pangia, Kagua-Erave and Nipa-Kutubu.

As a result of a high number of coronavirus (COVID-19) cases recorded in the country, Papua New Guinea will be placed in a nationwide quarantine.

This was revealed by Prime Minister James Marape at a press conference in Port Moresby. He stated that this would not be a "severe lockdown," and that companies and government would be able to function normally.

After returning from attending the funeral of late Grand Chief Sir Michael Somare in Wewak, East Sepik Province, he will reveal the specifics of the isolation strategy.

“The nationwide isolation strategy will ensure people are not moving from place to place unnecessarily,’’ said Mr Marape. “Remain in your province, remain in your district, remain in your village and where you are,’’ he said.

The National Control Centre, according to Marape, will work with the Regional Health Authorities and Provincial Coordination Centres to ensure that the provincial response plans placed in place last year are enabled and that funds set aside for the response are used effectively.

In the implementation of the isolation policy, NCC will cooperate with the National Department of Education.

PNG began its response in the green alert phase (no cases at first, then one around March), jumped to the next risk stage when it identified a few cases, and is now in the red alert phase due to community transmission in a number of provinces, according to Marape.

COVID-19, he said, is not a joke. "For those who think COVID-19 is a joke, or are playing around; this is an established pandemic,’’ he said.

He noted that every effort is being made to ensure that the COVID-19 vaccine being brought into the country is of world-class quality and safe to use. If PNG is unsure about the vaccine, he is willing to be the test subject.

Nearly 5 years LTI free and with a record of continuously improving and fine tuning its safety systems, Pacific Towing (PacTow) recently passed its International Safety Management (ISM) Code audit.  The voluntary audit was conducted in accord with the International Maritime Organisation (IMO), the United Nations agency specialising in maritime and shipping affairs. 

The aim of the audit was to assess the effectiveness of PacTow’s Safety Management System with regard to its vessels as well as its shore-based support.  The audit was conducted in accordance with a variety of IMO standards and international industry best practice.

HSSEQ Manager and Designated Person Ashore (DPA) Richard Hayka reports that the audit, which was conducted by HSE New Zealand, incorporated not only the ISM Code but also the International Convention for the Prevention of Pollution from Ships (MARPOL), the International Convention for the Safety of Life at Sea (SOLAS) and the International Ship and Port Facility Security (ISPS) Code.  The audit was conducted online due to COVID-19 travel restrictions.

Importantly, Hayka confirmed that the audit verified PacTow’s Safety Management System was in compliance with all mandatory rules and regulations.  This is in line with the company’s expectation that it will be certified for ISO standards 9001:2015, 14001:2015 and 45001:2018 by midyear.

The audit also found that all annual vessel surveys were up to date and in accord with the National Maritime Safety Authority’s (NMSA) requirements.  Furthermore, statutory certificates reviewed as part of the internal audit were found to be valid, and company records verified that all policies were properly implemented.

Adding to the safety credentials of PacTow, is the recent employment of an Operations Manager with considerable international oil and gas sector experience, including emergency response – Captain Marcelo Santini.  Together, Hayka and Santini are getting ready for another audit; they are preparing PacTow’s dedicated tug base at Motukea, Port Moresby for an International Ship and Port Facility Security (ISPS) gap audit.  Hayka says that he expects certification for this next audit to be achieved by the end of Q3 this year.

To learn more about Pacific Towing and its safety credentials:  www.pacifictowingmarineservices.com