The head of one of the Bougainville landowner groups impacted by the Panguna mine says it is up to the landowners to decide whether or not to reopen the mine.

The Panguna Mine was at the heart of the ten-year Bougainville civil war, and it was forced to close in 1989 when it was PNG's largest export earner.

But, thanks to Panguna Development Company Ltd, which has brought together almost all of the landowner parties, there is renewed talk of reopening the closed mine.

An agreement has been reached to help Bougainville Copper Ltd, a former miner, in its search for an exploration license, and to offer landowners shares in the venture. There has also been widespread opposition to resuming mining at Panguna, but Therese Jaintong, chair of the Siokate landowners' party, said it is up to them to decide.

"The landowners are empowered by the Bougainville Mining Act. So whatever they say they have the power with the government - all of us talking together. We are coming close to finding some good solutions," she said.

According to Jaintong, they decided to put together all interested parties to discuss the mine's future.

"We are very genuine that what we want to see is BCL and Rio Tinto and the National Government and the ABG to sit together with us landowners, mine-affected, and we come with some plans to find a solution to this," she said. "There's no use fighting over it and then bringing new issues, new structures, new people - so we are very genuine together."

SMLOLA, which had previously backed another developer, is the only mine-affected landowner party that has declined to sign the resolution.

Jeff Clason, an organizer with Panguna Development Company Ltd, said that reopening the contentious mine was still the best way for the area to develop a viable economy. He said there was support for reopening, particularly because Bougainville's other options are limited. "In this age and what we are going through, we already voted 98 per cent for independence and if they can come up with another strategy to make Bougainville we'd listen to them," he said. "But they haven't come up with anything mate. As you the bottom line is every country needs money."

The AstraZeneca Covid-19 vaccine has been given regulatory approval for use in Papua New Guinea.

The government is planning for the vaccine rollout, aimed to launch by the end of April, as PNG struggles to control the spread of Covid-19.

The PNG Medical and Scientific Advisory Committee reviewed the various Covid-19 vaccines produced, according to Prime Minister James Marape.

PNG can obtain the AstraZeneca vaccine produced through the COVID-19 Vaccine Global Access, or COVAX facility, he said. The World Health Organization has also given it their blessing.

Vaccination would not be compulsory, according to Marape. It will be aimed at a specific audience.

“A large number of health workers have been affected by the Covid-19, therefore, they will be given priority,” he said. “We are now in the process of getting the vaccine across, hopefully by April.”

PNG will receive a total of 588,000 doses of the AstraZeneca vaccine from the first allocation by the end of June, according to the Department of Health.

The vaccine will be sent to PNG in two shipments: the first, consisting of 288,000 doses, is scheduled to arrive in late March or early April, and the second, consisting of the remaining 300,000 doses, will arrive in late May or early June.

Frontline vital health staff will be the first to be vaccinated, with the first batch arriving by the end of June, followed by the most vulnerable, such as those with co-morbidities and the elderly, in the second half of the year.

Marape expressed concern in a statement that Covid-19 has infected a significant number of health workers, and that they will be given priority for vaccination.

"Health workers will be vaccinated first as we are seeing a growing number of health workers who are getting infected in the line of their work," he said. "There is evidence that there is a large community transmission in the National Capital District, and that is affecting health workers who have come in contact with Covid-19 patients in the course of their duty. This is a serious community transmission and we are now relooking at our own isolation strategies, and how we can best look after our health workers while processes for bringing in the vaccine are completed and the vaccines are brought into the country."

The prime minister said that he would not take the vaccine ahead of those who need it most and that he would only do so to demonstrate to Papua New Guineans that the vaccine can help them combat the virus.

“It must be emphasised that even with the vaccine, we must maintain and strengthen public health measures such as face masking, physical distancing, frequent hand washing, respiratory and cough hygiene, avoiding crowds and ensuring good ventilation,” said Marape. 

The National Fisheries Authority seeks to develop infrastructure in order to grow PNG's fishing industry.

According to NFA managing director John Kasu, the company has already submitted a 10-year strategic plan to the National Executive Council, which will be unveiled in April in Parliament to lay the groundwork for the fishing industry's future.

“Our aim is to build proper infrastructures such as ports and jetties and when we have proper infrastructures it will attract more investors and that will bring the cost of doing business down,” he said.

Kasu claims that doing business in the country is costly and that most fisheries factories aren't running at full capacity.

Currently, factories are producing about 30% because they are not receiving enough fish to process, and the NFA aims to raise that production to 80 or 90%.

“Our outlook for 2021 is to start work on building the important fisheries infrastructure project such as the Wagang Fisheries Port project in Lae and other major fisheries ports,” he said. “We will be also working on other projects such as the Tuna terminal project in Rabaul and also small jetties throughout the coastal areas in the country.”

NFA, he said, would look at downstream manufacturing to ensure that they can increase output as well. When they increase demand, more fish would be available to the factories, allowing them to operate at maximum capacity.

Kasu clarified that, unlike other industries, the NFA has been largely unaffected by the COVID-19 pandemic since most of their fishing vassals operate offshore and the NFA has a large offshore presence.

The United Nations' theme for International Women's Day is "Women in Leadership: Creating an Inclusive Future in a Covid-19 World," a celebration of global progress toward equal representation of women in leadership roles.

Women's leadership in the Pacific has focused on women's political participation, which is among the lowest in the world at just 7%.

However, data gathered for a new research project paints a more promising image for the private sector, where the region is making significant strides toward fair representation.

According to preliminary data collected as part of the Asian Development Bank's Pacific private sector development initiative's ongoing research into Pacific women's leadership in the industry, the Pacific compares favourably to global levels across several measures of leadership.

Women's presence on boards and in senior management roles in over 200 Pacific private sector organizations is measured in this report.

Although there are major variations between countries and industries, the average proportion of women on boards in the Pacific region is 22%, which is higher than the global average of 17%.

Some industries are doing better than others.

Women make up 24% of board members in financial and ICT organizations, and 31% of board members in industry associations (such as tourism associations).

Women make up more than 30% of board members in the Cook Islands, Palau, and Samoa.

In the organizations surveyed, women hold 30% of senior management positions, which is in line with the global average. Over 30% of senior management roles in the Cook Islands, Palau, Samoa, Tonga, and Vanuatu were held by women.

The companies listed on the South Pacific stock exchange have made considerable progress.

According to the National Fisheries Authority, the government is on track to increase downstream processing of fisheries products to 50% by 2025.

Papua New Guinea had already accomplished around 23% of the goal, according to Authority managing director John Kasu.

“There are a number of (government) objectives such as downstream processing which we have to increase by 2025 – a 50 per cent production,” he said. “We are faring very well to meet the targets and, this year, we have already achieved about 23 per cent. The objective is to grow the sector and invest in infrastructure, bring the cost of doing business in Papua New Guinea down so that we get a lot of business happening.”

The key driver, according to Kasu, will be tuna fisheries, with revenue generated going toward developing other fisheries such as coastal and inland.

“That’s basically the drive for the next 10 years,” he said. “On tuna, 70 per cent is being exported. The aim is to reduce that number and (have) internal processing plants. Rather than exporting, we can put it through the factories here.”

The 2.4 million square kilometre PNG fisheries region is the highest in the South Pacific. It has a large reef system, a number of islands, and a long coastline. It presents a significant monitoring and control problem. On average, the overall market value of the PNG capture is projected to be between K350mil and K400mil.

Puma Energy PNG Ltd is concerned about a shortage of foreign currency (forex) to import crude oil in a timely manner, according to country manager and director Hulala Tokome.

The business paid for its crude supplies when forex was available on the market, he said. 

Tokome added that the availability of forex had influenced the crude oil purchase schedule, also commenting on oil prices, citing Platts as a source.

According to Tokome, oil prices for February have been steadily rising.

Platts is a source of benchmark price assessments in the physical energy markets and a provider of energy and metal knowledge.

“Hence, we will have an increase in prices for March as the Independent Consumer and Competition Commission (ICCC) pricing structure is based on Mean of Platts (MOP) Singapore prices for the prior month,” Tokome said. “There is a one month lag on pricing effect. “All eyes will be on the Opec (Organisation of petroleum exporting countries) meeting. Their decision to increase crude oil production or not will determine which direction prices will go. There is strong market optimism around global demand returning on the back of vaccine rollouts.”

Many countries have begun to announce plans to phase out lockdowns, he said, and the warmer weather could help support demand. “With this, prices should continue to trend upwards,” Tokome said.

Brent rates are currently at US$64/bbl (K220.95/barrel of oil), according to Tokome.

In 2021, K92 Mining will invest K50 million in exploration.

Exploration dollars are critical, according to John Lewins, chief executive officer and director of K92 Mine, because they extend the project if good prospects are discovered.

The mine was re-commissioned in 2017 and announced commercial production at the start of 2018, according to Lewins.

So, it's been running as a commercial profitable mine for three years and has turned a profit.

“What’s important for Papua New Guinea is that the recognition of the potential that we got here in PNG,” he said. “And that, I think it’s been forgotten to a certain extent over the last few years and we have seen exploration expenditure dropping over several years.”

Lewins also said that they would like to see that start up again because there will be no more mines unless there are more explorations .“So exploration dollars are important,” he said. “This year, 25 per cent of all exploration dollars come from our company. I believe, we are the single largest company in terms of our expenditure in exploration and that’s our commitment.”

When the company's explorations linked the kora North deposit to its main ore body, it reached pay dirt and turned around its fortunes.

He said, “Its only Kora North but we are busy looking for a number of other deposits and we are not focusing just on Kora and the mine. But we got over 700 square kilometres of ground to run and our budget is K50m on explorations. We are spending a lot of money on exploration and that’s the profit that we made or money that we made is put back to look into it or production in Papua New Guinea”.

By the end of the month, a technical team from the Papua New Guinea technical (PNG) Mineral Resources Authority (MRA) will soon be tabling an assessment on the details regarding the construction of the Wafi-Golpu Mining project to the mining advisory council (MAC)

According to MRA managing director Jerry Garry, “Permitting of a special mining lease for large projects will require a different pathway than permitting a medium scale to small scale mine under the mining lease,” he said. “For a special mining lease, requires three distinct pathways for permitting. One, environmental permitting is a mandatory requirement and is done independently through the environment act under the custody of the Conservation and Environment Protection Authority (Cepa). That process has been done and Cepa has issued the environmental permit for the Wafi-Golpu project.

“The other is technical, from the mining perspective,” he said.  “That includes looking at structures to be built on the ground, the roads the buildings, the processing plants. Because it will be an underground operation, we will also look at designs to critically ensure that the integrity of the structures and any development met the expected standards. Once that is done and we are satisfied, we will give the green light for them to go and construct. During construction, we also provide that oversight to ensure that it is done safely. We have looked at all the proposals. Our technical team is about to table the technical assessment to MAC for the council to deliberate on. We anticipate that process to conclude by at least the end of March.”

Garry added that if it goes to the MAC and the council was okay with it, then the council would deliberate on the application. The third stream was the mining development contract, he said. 

“It’s between the State and developer to go by the books in terms of the benefits and any fiscal stability that they want,” he said. “When that is locked in, then we have a lower level called a development forum which will then involve MRA and State team to negotiate with the provincial government, LLGs and landowners in terms of benefits.”

The government has so far put in K19 million for cost support to cocoa.

According to Agriculture and Livestock Minister John Simon, the high-quality cocoa needed to be produced for the price to stay at K3 per kg. He added that last year, it was K10million and this year, K9 million as an incentive to growers to increase production. 

He said that what was being rolled out now was the K10 million from last year. 

“This year, the Government has allocated another K24 million (for agriculture price support), of which we have given another K9 million to cocoa, which makes it K19 million,” he said. “This money is for you (cocoa farmers). The money, however, will only be paid when you bring out your cocoa and weigh it on the scales.”

He added, “I want to see men and women in the villages who are involved in cocoa, I want to visit them, I want to see that their cocoa gardens are clean, I want to see a good production of cocoa, I want to see happy farmers who are receiving money.”

In support of the 2021 budgets and to boost the pandemic response, the government has secured a K1 billion loan from the Japan International Cooperation Agency (Jica).

The funds will be used to support regional health centres. Jica will disburse about K988 million to help the national budget with an interest rate of 0.1 per cent per annual and four-year grace period which benefits the economy.

According to Treasury Minster Ian Ling-Stuckey, “Subsequently, the PNG government reached out for international support and we thank you (Japan) for responding. Today, we are here to execute a loan agreement that was part of the 2020 financing plan but due to some delays, it was brought forward to this year. There is a process to follow to ensure the loan agreement is consistent with PNG’s Loan Assistance Act of 1971. As the minister responsible, after the signing of this particular agreement, the borrowing will become effective.”

He added, “The loan will support our budget for 2021. This loan continues the Marape government’s policy of replacing expensive commercial loans with good, cheap concessional financing. Last year, based on the financing plan, we raised K5.379 billion in concessional financing and I am proud to say that the total cost of those loans averages about 1.5 per cent and certainly no more than two per cent. That demonstrates our commitment to continue seeking support for concessional financing. Clearly, the strategy here is to pursue a revenue strategy because during the last 15 months under the COVID-19 conditions, the Marape government is focused.”

To set out how benefits from the PNG LNG project will be divided between two provincial governments, Papua New Guinea's Governors Hon. Philip Undialu (Hela province) and Hon. William Powi (Southern Highlands province) have recently signed a Memorandum of Agreement. 

In 2009, benefits from the PNG LNG Project to the provincial government and landowners were agreed during the UBBSA when the Hela region was still part of the Southern Highlands province, but three years later in 2012, the Hela region became a province. 

With oil and gas and wells supplying gas to the PNG LNG Project located in both provinces, leaders decided on a split of the benefits agreed in 2009, and instructed the Mineral Resources Development Company (MRDC) to work out the formula.

“First and foremost, we want to thank and pay homage to Grand Chief Sir Michael Somare for delivering the PNG LNG Project, the single biggest investment ever undertaken in our nation’s history. The project remains a milestone achievement for the nation by the founding father, whose passing we are mourning at this moment.

“We also thank and remember late Anderson Agiru, former governor of Southern Highlands and foundation governor of Hela, for his role in delivering the project, and negotiating the benefits for the landowners and the provincial government.

“At that time, the Hela region was part of Southern Highlands province. Work had begun for the establishment of a new province, and it was agreed that the benefits to the southern Highlands province agreed under the UBBSA would be reviewed once Hela province was established.

“MRDC undertook that exercise and worked out a formula for the split of the benefits between the Southern Highlands and Hela provinces, and we want to thank MRDC for almost their years of hard work put into this document we signed today.

“Essentially, this Agreement allows benefits from oil and gas fields in Southern Highlands to be split 60% (Southern Highlands) and 40% (Hela). Likewise, benefits for oil and gas fields in Hela province will be split 60% (Hela) and 40% (Southern Highlands).

“To illustrate, SHP will retain 60% of the benefits from PDL2 (Kutubu and Moran), which includes royalties, SSG funds, and development levies.

“Hela will retain 60% of benefits from all gas fields, which includes royalties, development levies, and the Kroton Equity as well.

“The Southern Highlands Provincial Government equity in Bank South Pacific (BSP) and Petroleum Resources Kutubu (PRK) will also be split, with 40% going to Hela province.”

“We are proud and honoured to sign this agreement on behalf of our people. 

“This split ensures equitable distribution of benefits from this project to the two provinces so that vital social development projects that uplift the lives of our people can continue to be delivered.”

To collaborate in fisheries infrastructure development, the National Fisheries Authority (NFA) has signed a Memorandum of Understanding (MOU) with the Korea Fisheries Infrastructure Public Agency of the Republic of Korea on Fisheries Ports Development.

The MoU provides a framework for both these groups to facilitate the sharing of best practices and exchange of technical and administrative human resource in the Fisheries Ports Development. This is also to support the development of the fishing industry. 

National Fisheries Authority Managing Director John Kasu said, “We’ve been having these discussions with the public agency in Korea and that has been for a number of years. So finally last year we agreed and as a result of that we agreed and as a result of that, we developed this MOU.”

He said that this MoU is significant because they are building important fisheries infrastructure at the moment. “So it’s an important MOU, for us moving forward,” he said.

Ambassador Kang, meanwhile, said. “The signing ceremony today may be small, but I’m sure this event is a big step toward our solidarity and our partnership in the future.”

The grants coursed through the Bougainville partnership commodity support facility will benefit cocoa farmers and women.

An initiative of the Autonomous Bougainville Government supported by Australia through the PNG-Australia partnership, and the New Zealand government, the grants range between K300,000 and K500,000 benefitting. 

Some of those selected include Kukurina Business Group which will use the grant to improve crop quality and rehabilitate cocoa blocks, among others. Jonathan Kopas head this group, with support from treasurer Larry Augustine, secretary Hilda Kopa and vice-secretary Peninah James.

Meanwhile, Australian High Commission’s counsellor for Bougainville Clayton Harrington said that obvious were the economic benefits of the programme. “Australia believes in the future of the Bougainville cocoa industry to improve livelihoods,” he said.

The Australia Papua New Guinea Business Council and the Business Council of Papua New Guinea are pleased to be re-launching the 36th Australia Papua New Guinea Business Forum and Trade Expo, which was deferred from 2020 to 24 to 26 May 2021. For the first time ever, this event will be held concurrently in Brisbane (at the Royal International Convention Centre), Port Moresby (at Hilton Port Moresby Hotel) and also online, with a shared speaking program.

The Forum theme for this year is “Reimagining the Future Papua New Guinea”. The theme aims to capture the important message that Australia and Papua New Guinea along with the rest of the world, must move and pivot with the times and circumstances in order to prosper. It also looks to advance discussion about greater diversity in the PNG economy.  Coronavirus and all its related restrictions and issues, along with advancements in technology mean that we must, collectively, think of different ways to work in trade, economy and indeed life. Online connectivity appears to be one of the important forms of communication that will continue for the foreseeable future.

This Forum is distinctly established as the leading annual bilateral business meeting between Australia and Papua New Guinea, and builds on the work both Councils have done over more than three decades in growing the bilateral business relationship.

The program for the Forum includes an overview of the political and economic climate, particularly issues which affect business and investment, and will include specific sessions by expert presenters on topics such as the Covid-19 Pandemic, emerging economic business opportunities in PNG, agribusiness, infrastructure, SME growth, Papua New Guineans in the Australian labour market, and resources. 

Key government ministers from Australia and Papua New Guinea, and a range of other expert speakers, have been invited to address the Forum to inform business representatives of policy issues in their portfolio relevant to business, and they will be able to join us from whichever location they are in, whether Brisbane, Port Moresby or elsewhere. Delegates will be able to engage in lively interaction with presenters in most sessions either live in person, or via the online platform with a Q&A feature. Video recordings of presentations will become available online soon after they are given so that delegates may go back and revisit portions they may have missed.

There is something in the program for just about anyone who has an interest in the bilateral business and economic relationship and in the economy of Papua New Guinea.

Delegates will be able to connect via the online platform by sending messages and/or booking appointment times with each other, particularly if they are not attending the Forum at the same venue.

The Forum will again feature a Trade Expo for Australian and Papua New Guinean companies wishing to use the opportunity to match their goods and services to clients and purchasers in each country, and to broaden their business relationship. An innovative development this year is that all the trade booths will be online, with a limited number of physical booths at each location (as well as online) due to Covid restrictions. Booth exhibitors will be able to display their corporate logo, upload documents and short videos for visitors, include links to their own website, and chat one-on-one with delegates online, who can request meeting times with them via the online platform. This is a new, exciting and pioneering way to do things, and we will endeavour to have answers for you immediately should you encounter any problems while using the online platform.

Register early for this conference as in-person spots at each location are limited and demand will be heavy.  To register, complete the online booking process at https://events.apngbc.org.au/event/36APNG/.  Please take care to show where/how you wish to participate. There are many new features that we will be introducing during this Forum as we look to resume regular business to business engagement, which has been so disrupted during the last year. This is a very good value conference.

Enquiries about registration, Trade Expo bookings and accommodation should be directed to the secretariat of the Australia Papua New Guinea Business Council, on telephone + 61 7 3348 5142 or by e-mail at info@apngbc.org.au or to the Business Council of Papua New Guinea on telephone + 675 323 8465, fax + 675 323 5162 or by e-mail at admin@bcpng.org.

We look forward to hosting you at the 36^th Australia Papua New Guinea Business Forum and Trade Expo on 24-26 May 2021, whether in Brisbane, Port Moresby, or Online.

The Singapore company exploring sand mining opportunities in Madang in Papua New Guinea has withdrawn its interests. 

According to the Mineral Resources Authority (MRA) Jerry Garry, the company had told them of its intention to pull out. 

“The (mining advisory) council has not deliberated on the withdrawal application,” he said. “As and when it’s received and tabled before the mining advisory council, we will then affect the withdrawal of the licence, what we technically call a ‘surrender’. They have written to our technical branch stating their intention to surrender the tenement. But it has not come to the attention of the mining advisory council. It is highly likely that it will come to the council in the next meeting which will be about three weeks from now. It is a voluntary withdrawal by the proponents and it has nothing to do with MRA. We didn’t force them to withdraw.”

He added, “Unless and when we see that the project proposal has detrimental consequences to people and the environment, the council has the power to force them to reconsider their application in terms of demarcating, realigning their boundaries. In the case of the sand, it’s really an exploration license that they applied for not a mining lease.”

Meanwhile, the Madang tourism industry association chairman Sir Peter Barter said the mining would affect the environment.

“These types of projects, especially to do with our marine ecosystems, will affect the leatherback turtle sanctuary in the Sumgilbar LLG,” he said. 

The signing of a Memorandum of Understanding (MOU) between the Livestock Development Corporation (LDC), ENB Provincial Government and the Rabaul District Investment Corporation Ltd at Kurakakaul has pledged the government K1 million towards setting up the Kurakakaul abattoir and ranch rehabilitation project in Rabaul, East New Britain.

Agriculture and Livestock Minister John Simon said that the government wants to help this province through this MoU.

“We want to revive the cattle industry in terms of cattle, sheep, goats and other livestock hence, we are also committed to reviving the abattoir and will provide a funding of K1 million to get this project started,” he said. “We will bring in cattle and other livestock to be distributed to farmers, who will look after them, and sell them to the abattoir. A stockyard for cattle will be built as well.”

He said that the government has made the same commitment in remote Sialum, Morobe, where a stockyard would be built to buy cattle from local farmers.

The MOU was signed by Minister Simon, ENB Governor Nakikus Konga, Rabaul MP Dr Allan Marat, Department of Agriculture and Livestock Secretary Daniel Kombuk, ENB provincial administrator Wilson Matava.

The increase of oil prices above US$60 (K207.90) has made Papua New Guinea’s Mineral Resources Development Company satisfied.

According to the company's managing director Augustine Mano, the average oil price last year was at “historical lows”.  

“This year is better than last year given the oil price is above US$60,” he said. “Last year, the oil price average was at a historically low and on average for the year around US$32 (K110.88). With the Covid-19 pandemic, companies around the world struggled. PNG was no different. If the price holds at US$60 for this year, it will be a strong recovery for the MRDC group.”

Mano added that the revenues for Kumul Petroleum Holdings Ltd, MRDC and the petroleum sector would be important. 

As a need under the EITI 2019 global practice standard, the Papua New Guinea Extractive Industries Transparency Initiative (PNGEITI) has published its first Beneficial Ownership (BO) Report.

Head of PNGEITI National Secretariat Lucas Alkan said that this has already been published on its website last December 2020. “All EITI implementing countries including Papua New Guinea are required to produce a Beneficial Ownership Report by the 1st of January 2020,” he said.

Alkan said to fully comply with this requirement, PNG should have a public register that lists the beneficial owners of corporate entities who hold a particular interest in oil, gas, or mining contracts. This also includes the identity of the beneficial owner.

Besides implementing the EITI Standard, PNGEITI is devoted to making sure Beneficial Ownership information disclosure is implemented through its role in; Open Government Policy National Action Plan 2018-2020; the PNGEITI Annual Workplan 2019; and the PNGEITI BO Roadmap for Implementing disclosure including existing legislation such as the Anti-Money Laundering and Counter-Terrorist Act 2015.

Alkan said, however, that reporting entities did not fully understand the meaning of Beneficial Ownership Reporting. “This is because they were unable to provide complete information of what was requested in the reporting template,” he said. “In addition to the challenges faced in obtaining information for BO reporting, PNGEITI still does not have a legal basis to collect the required BO information which makes it difficult to obtain complete information from the companies.”

There are, of course, many challenges that the report found. These include unfamiliarity with the BO concept especially for non-publicly listed companies; several reporting entities did not attend the BO training workshop, and complex corporate structures especially where there are multiple layers of ownership involving several jurisdictions and different types of legal entities.

With these many gaps, the report recommends to have a dialogue with the following organizations: the Financial, Analysis and Supervision Unit (FASU) of the Bank of PNG, Investment Promotion Authority (IPA): and the Mineral Resources Authority (MRA).

Falling export earnings have impacted the external sector of Papua New Guinea. But surging gold prices and import compression contained the damage.

According to the World Bank PNG’s economic update titled “Dealing with a triple crisis”, the current account surplus broadened in the first half of 2020, which increased by 14 per cent. This was supported by a strong merchandise trade performance. It said that even if prices for major exports were reduced, the earnings from the mining sector, especially gold exports, posted a surplus.

In addition, continued import compression brought about an overall current account surplus. Meanwhile, lower export earnings were more than offset by a 24 per cent decline year-on-year during the first half of 2020.

Negative was the trade services balance, caused by negative balances on education, transport, and other business services. The deficits in income and services narrowed. These developments led the current account into a positive area.

Earning exports decreased by 14.3 per cent, and prices of major exports also dropped since the beginning of the pandemic. Exports from mineral resources - which includes LNG - went down to 15 per cent year on year, crude oil decreased to 22 per cent and copper, 18 per cent. In addition, agricultural commodity exports decreased by 9.2 per cent, caused by lower export values for coffee, cocoa, and logs - with a little bit offset from palm oil exports.

In spite of this decrease, the increase in the cost of gold outweighed all of these impacts, giving rise to the total export earnings to 9 per cent year on year.

There will be confidence in the PNG economy in 2021.

According to Bank South Pacific Group Chief Executive Officer Robin Fleming, this was attributed to the resource sector with several major projects in the pipeline - such as the Fiscal Stability Agreement signed between the Government and Total and Joint Venture Partners of the Papua LNG Project. This also included the Environmental Permit awarded to Wafi-Golpu Joint Venture for the mine negotiations to gin on the Wafi-Golpu Mine.

“Certainly we feel that by the end of this year there is going to be far more confidence within the economy. The Wafi-Golpu Mine, and there is a much higher level of confidence within Lae as well, that the business community is looking at further expectations of growth,” he said.

Other drivers to this growth also included the ongoing investments in infrastructure and the improvement of State-Owned Entities.

“The Government has indicated in its Budget that it’s looking to continue with some of the development of the road construction, for the business community as they know they (PNG Power) got the capability to put their capital to investments which are revenue-generating and not just investments which are protecting their own infrastructure,” he said.

The World Bank Groups Papua New Guinea Economic Update of January 2021 said that the Papua LNG Project and the fast resolutions related to key mining projects can contribute to higher inflows of taxation revenue and foreign currency.

Bank South Pacific (BSP) Group expects its financial results to be no less than last year’s.

This was according to BSP chief executive officer Robin Fleming, who said that the year started off well for the bank.

Ending December 31, 2020, the bank made a net profit of K806.2 million, a 9.5 per cent decrease compared to K890 million in 2019. The decrease was caused in part by the effects of the pandemic.

Other highlights for 2020:

Total assets up by 12.3 per cent and loans up 3.0 per cent

Cost to income stable at 37.4 per cent, 37.7 per cent in 2019

Capital adequacy steady at 23.3 per cent, still well above the Bank of PNG requirement of 12 per cent

Loan provisions increased to 5.9 per cent

Dividend yield at 11.17 per cent based on the share price at K12

Increased profit contributions.

Fleming said that even with the challenges of COVID, the bank performed well in 2020.

“For 2021, we’ve certainly planned on archiving a result which is no less than 2020,” he said. “And the year has started off well and from an investor perspective always caveat by saying that if there had been any material change in our profitability, we would be compelled under the continuous disclosure (requirement) to announce to the market. Therefore absent of any continuous disclosure announcement, we can say that this year has started off as we would have expected according to plan.”

He noted, “There has been no event that gives BSP indication to signal to the market that there’s been a change in our operating performance which would require to make a disclosure to our investors.”

The Morobe government has recently passed its budget worth K662,675,000.

Morobe Governor and finance chairman Ginson Saonu said that this budget is for developmental and rural growth, adding that the budget had K204,026,700 from internal revenue and K458,648,300 from the national grants.

“The 2021 internal revenue total estimate is increased by 10 per cent, while the national grants total estimate is increased by 34 per cent,” he said.

Included in the national grants are the following:

teachers’ salaries (K165,345,800

district services improvement programme (K90,000,000)

special support grant (K30,000,000)

staffing grant (K34,644,300)

teacher leave fares (K7,210,300)

public servant leave fares (K1,239,500)

provincial services improvement programme (K10,000,000)

grants to local level governments (K9,717,500)

teachers’ leave fares – former year’s unspent (K34,700)

provincial services improvement programme – former year’s unspent (K12,089,000)

other public investment programme (K96,840,000)

public servant leave fares – former year’s unspent (K27,200)

provincial support grant – former year’s unspent (K1,500,000) totalling K458,648,300

The estimates of the internal revenue from services and goods tax amount to K124,241,544.

In order to achieve full radio, television and internet coverage, the Ministry of Information and Communication Technology plans to help the Autonomous Bougainville Government through improved tower infrastructure and fibre connectivity.

In a statement, ICT Minister Timothy Masiu plans to seek cabinet approval to roll out these programs. He said that his ministry is putting a submission through the NEC proposing how to roll out these programs.

He also added that the National Broadcasting Company is planning the establishment of two towers in Panguna and Wakunai, and installing the two FM transistors and accessories at these sites.

“It will also see the existing shortwave transmission from the Kubu site being relayed through these FM sites carrying the local NBC Bougainville broadcast to more people in Panguna and Wakunai and the surrounding communities,” he said. “We must plan and invest in the rollout of tower infrastructure all around the island to deliver improved and new mobile broadband services and to enable high-speed internet bandwidth access.”

He also added that they are in discussions with a private company to pull an undersea fibre cable from Taro Island. The idea, he said, is to land this in Buin and work it along the east coast.

“The existing undersea cable managed by PNG DataCo landed in Arawa, and this adds to the current challenge to connect the entire Autonomous Region of Bougainville,” he said.“My ministry has an interest in pursuing accessibility and affordability policies so that our people have access to affordable services through better tower infrastructure, connectivity and reliable broadband access. Besides the department also wants to service the atolls and health centres with VHF radios through the universal access scheme administered by NICTA.”

The Internal Revenue Commission has signed a Memorandum of Understanding with the Gulf Province in Port Moresby.

IRC Commissioner-General Sam Koim said that they have also forged similar partnerships with other provinces except for Hela, Southern Highlands, and Gulf and that this partnership is very timely because they will also be forming relationships with others.

He said that these are the places where businesses are taking place.

“With the Papua LNG project signing, Pasca and other significant projects taking shape.,” he said. “These projects will bring a lot of revenue to the province and it is important for the tax office to be close where business activities are happening so we can collect the taxes.”

This is the reason why they are going forward with these partnerships, he said.

“We are also undertaking a project where we are identifying where the businesses are operating and where the money is coming from so we will be degrouping a lot of businesses who file from the headquarters in Port Moresby.,” he said.“So we will be making sure that we collect the goods and services taxes (GST) at the point of sale so that whatever the 60 per cent is attributed to that point of sale and we can give that per cent back to the province and help in generating that money.”

Meanwhile, Gulf Governor Chris Haiveta said that they have embraced this partnership as they both can help each other with revenue programs, among other things. “We will province an office space and housing for the staff to take this partnership forward and work with the tax office to deliver the much-needed services moving forward,” he said.