Photo: BSP’s Acting Group CEO Ronesh Dayal

BSP delivers a record K1.136 billion underlying profit, with BSP’s statutory profit reducing to K1.081 billion once the impacts of the new PNG government taxes are applied. Consequently, BSP’s shareholders K1.74 full year dividend was only marginally higher (0.6%) than the prior year’s K1.73.

According to BSP’s Acting Group CEO Ronesh Dayal, the result was impacted by the K190 million Additional Company Tax (ACT) and a one-off tax credit of K135 million. The tax credit comes after PNG Bank’s closing deferred tax assets and liabilities for 2022 were re-measured at 45%, in accordance with international accounting standards, given the PNG commercial bank tax rate increase from 30% to 45% in 2023.

“Despite these challenges, BSP has posted a record K1.081 billion statutory net profit after tax (NPAT), up 0.5% from the prior year NPAT of K1.075 billion,” Mr. Dayal stated. He also noted that the Group’s underlying NPAT was K1.136 billion, excluding one-off tax impacts and represents a 5.7% increase on 2021 profits.

“Improved economic conditions in the Pacific with the reopening of borders and resumption of business activities were the key drivers of the underlying result. Consequently, net interest income increased by 8.8%, foreign exchange income increased by 11.2%, and total loans increased by 4.6% to K15 billion,” stated Mr. Dayal when commenting on the key Group highlights.

Maintaining a dividend payout ratio of 75%, BSP has declared K813.5 million in dividends to shareholders for FY2022. A final dividend of K1.40 per share, payable on 21 April 2023, combined with the K0.34 per share interim dividend paid on 14 October 2022, brings the dividend per share for FY2022 to K1.74.

Mr. Dayal added that BSP continues to be an attractive prospect for investment, “BSP’s dividend yield is 14.0% and 14.6% on the PNGX and ASX respectively, which is a high-yielding asset compared to other stocks on both markets.”

Mr. Dayal stated that a key focus in 2023 will be adapting to the tax rate increase to 45% on PNG commercial banks.

“The tax rate increase to 45% on PNG commercial banks from January 2023 has the potential to impede investment and growth in PNG’s financial sector. Further, the sector targeted tax is counterproductive for the long-term economic growth ambitions of PNG,” he added.

Mr. Dayal concluded by saying, “Despite the regulatory and operational challenges, BSP remains committed to the prosperity of PNG and countries in the Pacific. BSP currently has no plans to scale back its existing network or reduce its services in PNG as a result of the tax rate increase.”

“We understand that banking is a vital service for all communities where we operate, many of which have no other accessible banking alternatives. Providing services to our customers is a core philosophy and remains an essential part of what we do here at BSP,” he concluded.

Photo: Steamships new head office, the completed @345 on Champion Parade, formerly Burns House.

Port Moresby listed Steamships Trading Company Ltd has announced a stronger than expected year in 2022, for the group, as the PNG economy recovered well from the constraints imposed as a result of the COVID-19 pandemic. 2022 results show improved revenue across the business, as sales revenue increased 12% to K631.3 million against last years K563.9 million. The company declared a total dividend of 120 toea per share, in comparison to the previous years 100 toea.

The hospitality and property divisions saw improvement with more demand due to the lifting of COVID-19 restrictions. Pacific Palms property experienced and increased residential occupancy across the portfolio. Coral Sea Hotels continue to expand with the opening of new Enzo’s Pizza outlets despite food and beverage margins compressed due to rising input inflation.

The integration of Logistics businesses, compromising Consort Express Lines shipping, EastWest Transport, Joint Venture Port Services and Pacific towing continued throughout the year with the aim of offering an improved service for customers. Additional shipping, towing, and trucking capacity was added to meet the demand for services.

Despite recording positive results, the Company was not immune to the supply chain constraints and inflationary pressure that prevailed globally. These limited the progress of various property projects and new investments.

“As the effects of COVID-19 receded, businesses and the economy in Papua New Guinea slowly recovered during 2022. Demand for goods and services increased throughout the year with an anticipated post-COVID downturn not materialising.” Said Chairman, Geoff Cundle of the results, “Steamships performance in 2022 was solid. Profit attributable to shareholders declined on the absence of property sales; a strong underlying performance means the company is in a good position to benefit from Papua New Guinea’s encouraging economic growth prospects”.

There is growing optimism that early-works activity for the Papua LNG project and boarder infrastructure investment should gain traction in 2023. Steamships is well positioned to benefit from the improving economic conditions. It remains committed to continuous improvement in productivity and vigilant in identifying opportunities for growth.

Managing Director Rupert Bray “PNG is our home and primary place of business. The anticipated openings of Harbourside South, the BSP Branch at Dobel in Hagen, and Portside Business Park this year are all exciting additions to our portfolio. We remain committed to contributing to the social and economic growth of PNG, and look forward to what we expect to be another strong year in 2023.”

Photo: Greg Pawson

Kina Securities Limited, has reported an underlying net profit after tax of K106.1 million for the financial year 2022, representing a 10.3% increase from the prior corresponding period (PCP). Kina’s CEO, Greg Pawson, said that the result was "pleasing" and demonstrated the company's commitment to its strategic plan. He also highlighted the diversified income streams, increased revenues in digital channels, and solid growth in Kina’s core business as contributing factors to the company's success.

In addition, Pawson noted that Kina's underlying return on equity remained above 15%, at 17.9%, and that the company maintained a robust balance sheet, with regulatory capital at 22.5%, well above the minimum requirement. He emphasized that the strong results demonstrated Kina’s ability to execute a revenue diversification strategy, with 50% of income derived from non-interest products.

Despite the challenging business environment in Papua New Guinea, Kina's overall lending increased by 11% against PCP, with the overall balance exceeding K2.1 billion. Commercial lending was up 9.6%, which included a strong year-on-year SME growth of 25% and home lending up 19%. However, in December 2022, the PNG government announced an increase in corporate income tax on commercial banks from 30% to 45% for the 2023 fiscal year. The increase in the rate took effect on January 1, 2023.

Kina’s deferred taxes at December 2022 were revalued at the new rate in line with IFRS, resulting in a tax credit of K10.4 million in 2022 statutory net profit after tax (NPAT). Kina’s FY2022 statutory NPAT was K116.5 million (including tax credit), while the underlying NPAT was K106.1 million. Pawson stated that Kina continues to engage with the government regarding possible alternative tax treatments that will support economic growth in PNG.

In summary, Kina Securities' FY22 financial results were strong, demonstrating the company's ability to execute its strategic plan, despite challenging business conditions. Pawson’s comments highlight Kina's commitment to revenue diversification, solid growth, and maintaining a robust balance sheet to navigate changing market conditions.

Photo credit: PNG Tourism Promotion Authority

National Fisheries and Marine Resources Minister, Jelta Wong, expressed his optimism regarding the future of tourism in Papua New Guinea (PNG). He believes that the country's tourism industry will experience significant changes within the next five years, particularly with the growth of the cruise ship sector. Wong noted that the cruise ship industry is the fastest-growing subsector of the tourism industry globally and a crucial export for over 80 percent of developing countries, particularly those in the Pacific region.

Wong stated, "The Australian cruise market is one of the world’s fastest-growing cruise markets, frequently cruising the South Pacific, namely Papua New Guinea, Vanuatu, the Solomon Islands, and Fiji. With this influx of mass tourism, smaller Pacific nations like Papua New Guinea experience some positive, high-value macroeconomic impacts."

However, the growth of the cruise industry also poses significant concerns, particularly regarding the socio-economic impacts of over-tourism, population pollution, and passenger environmental footprints. Wong emphasized that the direct impacts of cruise tourism on cultural-based tourism and cultural integrity are primary concerns for grassroots people, especially in the Gazelle District, where he serves as the Member of Parliament. He stated, "The direct impacts on cultural-based tourism and cultural integrity are a primary concern for our grassroots people, especially in the Gazelle District. PNG’s people have solid cultures, customs, and traditional beliefs, and these are what we need to protect when we engage in cultural tourism."

It is crucial to strike a balance between the growth of the tourism industry and preserving the country's cultural heritage and natural resources. Wong added, "PNG’s people have solid cultures, customs, and traditional beliefs, and these are what we need to protect when we engage in cultural tourism."

Despite the potential negative impacts of the cruise industry, Wong acknowledged that cruise tourists visit PNG seeking authentic cultural exchanges, virgin environmental adventures, and remote island experiences. Most tourists engage in some form of community-based tourism during their PNG adventures. Wong stated, "Cruise tourists travel to PNG seeking reciprocal authentic cultural exchanges, virgin environmental adventures and remote picture-perfect island experiences. Most tourists are engaging in some form of community-based tourism when on their PNG adventures."

It is essential to address the potential negative impacts of the cruise industry while promoting sustainable tourism that preserves PNG's cultural and environmental integrity. Wong's comments highlight the importance of striking a balance between economic growth and the preservation of PNG's cultural heritage and natural resources.

Photo: (L-R) Myriam Ferran, Deputy Director General, European Commission/ Directorate General for International Partnerships; Paola Pampaloni, Deputy Managing Director, European External Action Service; Kapi Maro, Acting Secretary for Foreign Affairs; Jacque Fradin, EU Ambassador to PNG; and Buri Gari, Acting Director General Multilateral Division, Foreign Affairs.

European Union political delegates met with their Papua New Guinea foreign affairs counterparts at the latter's Waigani office on the 27th of February to discuss their shared political interests and development agendas between the EU and PNG. 

The 5th High Level Papua New Guinea and European Union Political Dialogue was co-chaired by Paola Pampaloni (Deputy Managing Director Asia and Pacific, European Union External Action Service) for the EU side and Kapi Maro (Acting Secretary for Foreign Affairs) PNG side. 

Present for the dialogue were Myriam Ferran, Deputy Director General, European Commission/ Directorate General for International Partnerships; Jacque Fradin, EU Ambassador to PNG; and Buri Gari, Acting Director General Multilateral Division, Foreign Affairs. It was witnessed by French Ambassador Guillaume Lemoine.

The discussion included good governance, peace and security, multilateral relations and rule-based order, the Indo-Pacific Strategies for the European Union, preventing gender-based violence, and fostering children's rights.

A major program eyed for the next seven years is the continuation of the "WaSH" program (water, sanitation, and hygiene) and the establishment of a human rights commission. A new program to be launched soon is for climate change and biodiversity, led by the EU Team.

Both the EU and PNG governments are looking forward to attending the COP 28 climate change and carbon emissions meeting starting the 28th of November 2023, stressing the need to tackle these global issues and the Paris Agreement.

The EU delegates also presented the tool box "European Fund for Sustainable Development" under its development goal to attract capital and investments to PNG.

Both parties also agreed on the continuation of the Economic Partnerships Agreement (EPA).

Mr. Maro announced after the dialogue that Papua New Guinea values its important relationship established between the European Union since 1975 and are keen to work in partnership in terms of economical, political, and social ties established. 

Ms. Pampaloni responded that they were happy with the dialogue and are looking for progression to be made, adding: "A steady form of governance and a secure society ready for development is the way forward." 

Photo credit: Puma Energy

Amid current economic issues in Papua New Guinea such as high inflation and unemployment, a shortage of foreign exchange currency last week crippled the country's fuel supply immensely, marking the second major nationwide fuel crisis within three months.

This was the result of an ongoing situation between the Bank of Papua New Guinea (BPNG) and the country's major fuel products supplier, Puma Energy, due to a lack of diligence in discussions by both parties concerning the approval of the fuel firm's foreign exchange orders by the country's financial regulator.

By 17th February, the nationwide shortage in fuel prompted business houses and the public to be held to ransom and left to squander what was left of Puma Energy's limited supply.

Puma Energy confirmed in a letter to the media that none of its propositions have been satisfied from agreements discussed with Prime Minister James Marape during his meet with company executives in Singapore.

Puma's Country General Manager, Hulala Tokome, revealed that what was discussed and agreed upon in Singapore with the government had not been honoured.

"Our FX orders have been restricted by the Bank of PNG, which is limiting our ability to operate and ensure the supply of product into the country. The root cause of the problem is for the Bank of PNG to approve our FX orders. If our FX orders are not settled this will impact the availability of fuel supply," he said.

"A total shutdown by Puma is going to affect a lot of businesses nationwide, because it takes us more than a month to replenish our fuel stock," Mr Tokome said.

Propositions by the government in ensuring an immediate solution since the last fuel shortage have not come to fruition, and it has shown no tangible outcomes in affirming a confirmed alternative.

This has prompted major service providers to ration their fuel intake, leading to flight disruptions, constant power blackouts, cuts in water supply, and a huge delay in business activities and operations due to the limit suppliers have put on fuel consumption.

State entities have also voiced their concerns with Commissioner of the Independent Consumer and Competition Commission (ICCC), Paulus Ain, stating that the impact of fuel disruptions in PNG is of "grave concern" and that the ICCC is encouraging fuel suppliers to enter into the PNG market.

"There is no restriction for other suppliers to enter into the fuel supply market," Mr. Ain said.

Government departments and agencies responsible for facilitating potential entrants should not become a barrier but assist and facilitate possible and potential entrants," he said.

In addition, Institute of National Affairs (INA) executive director Paul Barker also said there needs to be honest and transparent negotiations between Puma Energy and Bank of PNG. 

Barker said all major forex transactions for each month should be made available and posted online to the market and public, so that ongoing disputes and claims can be openly verified.

In relation to the ongoing fuel saga, discussions by the government with Kumul Petroleum Holdings Ltd. (KPHL) and multinational companies ExxonMobil, Total Energy, Santos, and the Mineral Resources Authority (MRA) are still pending.

The Prime Minister recently stated that the government will be heading towards locally based downstream processing, but Puma's current stance has questioned the government's timing on when a local refinery is scheduled to come into play.

While the government has made its appeal to suppliers of fuel there are also underlying issues affecting the flow of foreign currency to the domestic foreign exchange market. The fall in forex together with issues concerning PNG's major economic sectors are contributing to high inflation, unemployment, and the ongoing threat in fuel supply.

Photo: Richard Maru

International Trade and Investment Minister Richard Maru has expressed his concern about the ongoing fuel shortage in Papua New Guinea, stating that it could send the wrong signal to investors willing to do business in the country. Maru emphasized the need to resolve the issue quickly, saying, "This will leave a bad impression on our investors. It cannot be an ongoing situation where we hold up business activities and service suppliers. My concern is the investors. It is beginning to create a pattern and we must not allow it (to continue)."

Maru also urged Puma Energy and the Bank of Papua New Guinea (BPNG) to find a solution to the constraints in the supply of foreign exchange (FX) that prevented Puma Energy from purchasing crude oil. He said, "I'm sure Puma Energy and the Bank of PNG understand that and will come up with a resolution that will benefit everyone."

Puma Energy's country manager, Hulala Tokome, confirmed that the company had not received FX flows for over six weeks, which was the reason behind the fuel shortage. he said, "Puma Energy could not purchase crude oil due to the constraints in the supply of foreign exchange (FX)."

BPNG has maintained its stance that Puma Energy should be dealing only with commercial banks. The fuel shortage has affected motorists and fuel service stations in Port Moresby, Lae, and Mt Hagen.

Maru emphasized that the fuel shortage would mostly affect businesses, saying, "It is important that the issue be resolved quickly. This will leave a bad impression on our investors. My concern is the investors. It cannot be an ongoing situation where we hold up business activities and service suppliers."

In conclusion, Maru called on Puma Energy and BPNG to find a resolution that would benefit everyone and ensure that such fuel shortages do not happen again in the future. He said, "We must not allow it (the fuel shortage) to continue."

Photo credit: International Trade and Investment Ministry of Papua New Guinea Facebook page

The world experts on Special Economic Zones (SEZs) from Japan Development Institute (JDI) together with the local experts and the Ministry and Department of International Trade and Investment are now wrapping up their initial fieldwork of visiting the identified potential SEZ locations in the country to collect information to formulate the Masterplan for Papua New Guinea (PNG). Their last two visits will be to the Port Moresby Industrial Zone and the Western Province next week.

Minister for International Trade and Investment, Hon. Richard Maru said that after all fieldwork are completed, the JDI team together with the local experts will work together to provide three key deliverables.

“The SEZ Act of 2019 was done without the policy and a strategy so they will complete a new policy framework, new strategy to develop SEZs, and propose a completely revised legislation that will regulate the setting up and operating of SEZs in Papua New Guinea. They will also do a report on how to build the capacity of the SEZ Authority and help us with the selection of the best candidate for the position of the CEO of SEZ Authority who must be a world class expert on the management of SEZ Authority,” said Minister Maru.

Minister Maru said he was impressed with the work to date.

“I am looking forward to the presentation of the new policy framework, the SEZ development strategy and the revised SEZ legislation which will be delivered during the SEZ Summit that will be hosted in Port Moresby on April 24-25 this year. Following feedback from the global experts and stakeholders from throughout the country who will attend the Summit, these three documents will be finalized and submitted to the Government in May for consideration and approval,” said Minister Maru.

“This work is the start of the transformation of our economy. There are already a number of investors from countries as far as Japan, Thailand, Malaysia, the Philippines and Australia who are expressing interest to invest in our SEZs. We need to ensure that we have the institutional capacity and the mechanisms in place to attract the investors to come and invest in PNG. We want to get the first investors in this year so we are working tirelessly to ensure that we can deliver on this target,” said Minister Maru.

Minister Maru added that the Memorandum of Understanding (MOU) that was signed today between the Ministry and Department of International Trade and Investment and the Kumul Petroleum Holdings Limited (KPHL) for KPHL to supply cheap, reliable and clean energy solutions to the SEZs was timely.

“I want to commend the KPHL Board and Management for partnering us on this journey,” said Minister Maru.

“We will also be working with the Ministry and the Department of Works and Highways in the Connect PNG Program to involve them very closely in the development of the SEZ Masterplan because we need high economic potential areas that need to be connected by road and also other enabling infrastructure for these SEZs to be realized,” added Minister Maru.

Photo credit: International Trade and Investment Ministry of Papua New Guinea Facebook page

Kumul Petroleum Holdings Limited (KPHL) signed a Memorandum of Understanding (MOU) recently with the Ministry and the Department of International Trade and Investment to establish a long-term collaborative relationship where KPHL will be the energy solution provider to support the development and operation of all the Special Economic Zones (SEZs) in Papua New Guinea (PNG).

Minister for International Trade and Investment, Hon. Richard Maru during the signing said that securing reliable and affordable energy supply to the SEZs was a critical foundational input to the commencement and development of the SEZs.

“Our country is known by most of the investors as one of the most difficult and expensive places to do business and one of the primary reasons is because we have very unreliable power and the most expensive cost of energy. Even the cost of producing goods in PNG is ten times more when we are competing with other countries like Thailand, Vietnam and Malaysia,” said Minister Maru.

“The vision of the Marape-Rosso Government is clear, we want to replace all food imports, we want to process everything that we currently produce into final products, and we want to grow our exports, but we cannot do that without cheap, reliable and clean energy. Without innovative solutions to our electricity to bring the cost down and make power more reliable, we will never succeed as a country to develop this nation because we are living in a global community where we need to compete with the rest of the world. It is our job as the Government to make sure that the country has cheap and reliable and clean energy. The time has come for us to stop pretending that everything is well, accept the responsibility and look at organizations like KPHL who have the mandate to provide energy so we can attract investors. We can dream about all the big projects, but they will only be dreams unless we find real solutions to electricity and all the other factors that attract investments and investor confidence in our country. There are other inputs too like the freight cost but for now electricity is one of the biggest hinderance to our economic growth and to our ability to process and to compete with the rest of the world,” added Minister Maru.

Minister Maru said the Ministry and the Department of International Trade and Investment had made a deliberate choice to partner KPHL as their partner of choice to help them find energy solutions to power up all our economic zones into the future because they have the financial muscle, they have technical competence, they have energy, they are the producer of energy, and they have a record where they constructed and operated a gas fired 58MW power generation facility in Port Moresby under a 50/50 ownership arrangement with an experienced international operator at zero loss of time and zero incidents.

“KPHL has already started to be a player in the energy market, not only to produce the resource but to supply electricity. Our country needs innovative solutions providers and we have decided to partner KPHL because we have the agenda to announce the SEZ Masterplan by May this year,” said Minister Maru.

Minister Maru said the Ministry and the Department of International Trade and Investment was determined to partner KPHL to help them find solutions for Madang and East Sepik Province as a matter of priority.

“I am looking forward to working with the Board and Management of KPHL to start with these two provinces where we have the proposed PMIZ and the Sepik Plains SEZ,” said Minister Maru.

Photo credit: Morobe Governor Luther Wenge Facebook page

Morobe Governor Luther Wenge has expressed frustration at the slow pace of negotiations regarding the Wafi-Golpu project, a gold-copper mining project worth billions of Kina. According to Wenge, "the provincial government’s position is clear: mining must go ahead. We can sort everything else later." He believes that preparations for the project should begin immediately and the special mining lease should be granted.

However, Wenge has stated that negotiations are being delayed by the state negotiating team, who are attempting to secure the best possible deal for all stakeholders in the project. State negotiating team chairman Dairi Vele confirmed that they were trying to get the best deal for everyone involved in the K18.5 billion project.

According to Wenge, the provincial government is willing to comply with the law, including paying the required 2% royalty fee. However, he also mentioned, "by law, royalties are 2 per cent but the government wants an additional 3 per cent which the developer is not agreeing to. We are ok with it as long as it’s by the law." Governor Wenge has stated that the provincial government is ready to move forward with the project but that the state negotiating team is delaying progress. He said, "It's the state negotiating team who is negotiating with the developer on our behalf that is delaying this."

Governor Wenge has also expressed his desire for transparency in the negotiations. He previously stated that 10% of the state's 30% equity in the project would be free-carry to the Morobe government and the landowners of Babuaf, Yanta, and Hengabu. However, he recently said that the details were still not clear. He called on the government to change the law if they wished to increase royalties beyond the legally required 2%. In his words, "If the Government wants more, then change the law so it’s in their favour."

In conclusion, the Wafi-Golpu project is a major economic opportunity for Morobe province, and Governor Wenge is keen for negotiations to be concluded promptly. The government and the developer must come to an agreement that benefits all stakeholders, including the Morobe government and the landowners of Babuaf, Yanta, and Hengabu.

Photo: Prime Ministers Marape and Rabuka in Suva, Fiji

Prime Minister Hon. James Marape says Fiji and Papua New Guinea must work together for the greater good of the Pacific Islands’ family of nations.

He said this on Tuesday (February 21, 2023) after a bilateral meeting with Fiji Prime Minister Hon. Sitiveni Rabuka in Suva. PM Rabuka is also Chair of the Pacific Islands Forum (PIF).

Discussions centred on economic and trade relationships between Fiji and PNG, people-to-people relationships, co-operation and exchange between public servants, military relationships and police relationships. PM Marape said this would be for beneficial for both countries, Melanesia and the PIF family.

The two leaders also agreed to give each other land in their respective capitals to build their diplomatic missions.

PM Marape also congratulated PM Rabuka on being re-elected on December 24, 2022 for a third time. He was first democratically elected as Prime Minister of Fiji, serving from 1992-199, and again in 2002.

He alluded to the strong relationship between the two nations forged by pioneer leaders, the late Ratu Sir Kamisese Mara of Fiji, and Sir Michael Somare of PNG.

“Mr Prime Minister, and your country, you and me walk under the shadows of great men who walked ahead of us,” PM Marape said.

“Our nations have a shared history. We, even before being grouped as countries, were living on this part of Earth. Our ancestors were travelling on high seas. We have a common heritage, a common bond, we belong to one Pacific, one Melanesia.

“It is only proper, as you assume leadership, for Papua New Guinea to come and give our respect in that context. Papua New Guinea and Fiji, working side-by-side, will ensure that we stabilise the canoe that is taking our people with us, will ensure that the future is bright for our people is as far as development is concerned.”

PM Marape thanked PM Rabuka, as Chair of the PIF, for bringing back Kiribati into the PIF family after it withdrew last July.

“Papua New Guinea stands ready to work in partnership, as you once again lead your country, and are ready to offer our support,” he said.

PM Marape arrived in Nausori Airport, Suva, to a red-carpet welcome on Monday night (February 20, 2023) with a colorful welcome by Fiji police and military.

He was accompanied by Enga Governor Hon. Sir Peter Ipatas, Nipa-Kutubu MP Hon. Dr Billy Joseph, Hiri-Koari MP Hon. Keith Iduhu and Kundiawa Gembogl MP Hon. Muguwa Dilu.

PM Marape also paid a courtesy call on Fiji President, H.E. Ratu Wiliame Katonivere, at the State House on Tuesday.

He then headed to the Pearl Resort Hotel, owned by PNG through Mineral Resources Development Company (MRDC), to meet and hold discussions with PNG business community.

Photo: Prime Minister Hon. James Marape

Prime Minister Hon. James Marape announced recently (Sunday, February 19, 2023) that the economy is looking good with Papua LNG in Gulf to announce its Front-End Engineering Design (FEED) next week and negotiations on Wafi-Golpu Mine in Morobe nearing competition.

FEED is the process for conceptual development of projects in processing such as Papua LNG.

PM Marape also announced that Porgera Gold Mine would reopen as soon as tax matters of the old Porgera between developer Barrick and Internal Revenue Commission (IRC) were sorted out.

“The two major resource projects of Papua LNG and Wafi-Golpu have not been progressed substantially for more than 20 years with their known resources, but we are now making big strides to get the projects developed,” he said.

“I have just received the very good news that FEED for Papua LNG will be announced next week – which is an indication that the project is moving.

“After the FEED stage is Final Investment Decision (FID). The project developer, TOTAL, has given its full assurance that the project is moving on time and on plan.

“This is very good news for the country.”

PM Marape said an issue with Papua LNG joint-venture partners with PNG LNG partners had been resolved thanks to TOTAL Energy’s leadership – which paved the way for FEED and FID.

He said the good news for PNG was that P’nyang LNG in Western would be developed immediately after Papua LNG – “which means that the country will have eight years of LNG construction involving Papua LNG and P’nyang”.

“I assure both Gulf and Western provincial governments, and landowners, that we will have having consultations with them in the second half of this year,” PM Marape said.

As regards Wafi-Golpu, the Prime Minister said negotiations between the developers and the State Negotiating Team (SNT) were drawing to a close, with a financial agreement and technical aspects of the project to be completed.

“Both joint-venture partners, Harmony and Newcrest, and our SNT, are continuing with their negotiations,” he said.

“Our country must be reminded that once you sign into such long-term agreements, it’s in place for the next 40 years, as in the case of Wafi-Golpu.

“We don’t want to rush headlong into signing an agreement that we will regret later on, such as we have come to regret in Porgera, Ok Tedi, Lihir and Bougainville.

“People may be complaining that our Government is slow, however, we are looking thoroughly through all the fine print so that we maximise revenue for landowners, Morobe Provincial Government and the State.

“I appreciate the patience of both Harmony and Newcrest, and we’re drawing to a close now, with the Financial Framework Agreement to be completed. Once that is done, a mining development contract will be issued, which should be in the first half of this year.”

As regards Porgera, PM Marape said the Government did not have everyday control over IRC’s work IRC had made assessments and had been in conflict with Barrick over their assessment criteria.

“Barrick has asked some fundamental questions, especially on the IRC’s definition of ‘taxable stripping’, in as far as resource harvest is concerned,” PM Marape said.

“Barrick is of the view that the current ‘taxable stripping’ definition is not consistent with practice and law, hence the prolonged dispute, so we had to intervene.

“The laws of our country allow for the arbitration process to be deployed if disputes arises at the end of IRC’s assessment, but in the national interest, we felt that instead of going through a lengthy arbitration process, it was better that we get an independent panel to look into the issue.

“We’ve asked the independent panel to look at the law and current practice, and measure against IRC’s assessment, on Barrick’s SML 1 operation and tax submissions.

“I thank Barrick for paying for care and maintenance of the mine up to this point in time, and is increasing by the day, which is why the independent panel was established to look into the taxation issue and have the mine back in operation at the earliest.”

Photo: An empty service station at 8-Mile in Port Moresby after the fuel bowsers ran dry.

The Government is now in serious discussions with Kumul Petroleum Holdings Ltd (KPHL) and three multi-national petroleum companies to find solutions for the fuel shortage in the country, with a major announcement expected soon, Prime Minister Hon. James Marape has said.

The Prime Minister said the Government has been holding talks with ExxonMobil, Total Energies and Santos, together with Mineral Resources Development Company (MRDC) and State-owned company KPHL, to look into the immediate import of fuel and a long-term solution in the construction of a locally-based refinery for downstream processing to secure the domestic market.

Prime Minister Marape said today (February 19, 2023) Papua New Guinea, under his Government, was heading in the direction of downstream processing of its resources but Puma Energy’s actions of recent months have forced the Government to act now rather than later in this area.

“Our fuel insecurity due to reliance on one or two suppliers is forcing the Government to urgently call on its State-owned Enterprises and major oil companies operating in the country to finding solutions,” said PM Marape.

“The Government is now collaborating with Kumul Petroleum, MRDC, ExxonMobil, Total Energies and Santos to explore solutions that can ensure the country’s fuel security, including aviation fuel and general fuel.

“We are leaving no stone unturned. What has happened under Puma must not be repeated. For far too long, this country has been victimised when, in fact, Papua New Guinea continues to export petroleum and gas to the world year after year. The irony is staggering.

“I am, therefore, pleased to note the progress the Government is making with our national development partners – ExxonMobil, Total Energies and Santos.

“I am also looking forward to the moment when we can make the announcement on the immediate solutions we have worked out to resolve this relatively long-standing issue.”

Papua New Guinea was plunged into an acute shortage of fuel at the end of last year 2022 when Puma Energy PNG Ltd announced it could no longer source crude oil and finished products because of unresolved foreign currency issues. This affected its supply of fuel to PNG, especially to the aviation industry where Air Niugini was forced to ground its flights and left the travelling public stranded for days as a result. The matter raised huge concerns on supply monopoly and the country’s fuel security both for short and long term.

Photo credit: International Trade and Investment Ministry of Papua New Guinea

The Papua New Guinea-Australia bilateral relations must advance to another level and must be anchored on Trade and Investment relations between the two countries, says the Minister for International and Trade and Investment, Hon Richard Maru. Minister Maru said this during his bilateral meeting with his counterpart Australian Trade Minister, Hon. Don Farrell in Australia at the margins of the PNG-Australia Ministerial Forum held last week. The 29th PNG-Australia Ministerial Forum was convened on the back of the historic visit by Australian Prime Minister Anthony Albanese to PNG.

“For the last 47 years the current status quo has been in favour of Australia. PNG’s exports to Australia are mainly gold and other precious metals which comprise over 98% of total exports. This means less than 2% are from the non-extractive sector and is valued at K50 million per annum. Australia’s total exports to PNG is estimated over K500 million, which translates to a ratio 1:10. A very huge trade imbalance,” said Minister Maru.

Minister Maru said that Papua New Guinea (PNG) would like to see a win-win whereby PNG can also export its goods and services into the Australian market.

“The current status quo is heavily skewed in Australia’s favour. Without taking actions to shrink this huge trade deficit with Australia. PNG is losing thousands of job opportunities and much income especially for our villagers, farmers and our tax revenue. This is the reason why PNG withdrew from the PACER Plus trade negotiations that where not addressing the very issues that continued to see PNG locked of exporting its competitive products and services to Australia. Without attending to these issues, the current PNG-Australia bilateral trade assessment study will be another a waste of time,” said Minister Maru.

In this regard, Minister Maru requested his counterpart to assist PNG in building its capacity to export to the Australian market in terms of both market access and market entry or the “last mile”.

“This will address the trade imbalance and create an even level playing field for the two countries, then we can talk about free trade agreement which will create win-win opportunities for both countries,” said Minister Maru.

“I want to see PNG export its taro, casava, banana and others to the Australian market, particularly targeting the over 60,000 Papua New Guineans diaspora living in Australia. The two countries need to work together to ensure the bio security issues and other technical barriers to trade that is affecting PNG’s exports are addressed especially in getting PNG produce on the shelves in big Australian supermarkets such as Coles or Aldi. This must be the year of action. No more talkfest. We have been talking and asking for the same market access for the last 20 years in every Ministerial Forum without any tangible results. Without results this year there will be no more trade and investment talks with Australia,” said Minister Maru.

Minister Maru said that PNG currently faces huge challenges with high unemployment, increased law and order, foreign exchange issues and high inflation amongst others.

Minister Maru stated that despite the challenges, there were many opportunities for Australia private sector to invest in PNG.

“PNG is an economy in transition and the Marape-Ross Government is looking to partner with likeminded countries ready to invest in PNG,” said Minister Maru.

Minister Maru explained that one of the vehicles that the Marape-Rosso Government would be utilizing to grow the PNG economy was through the creation of SEZs. He informed his counterpart of the SEZ study currently being undertaken by the Japan Development Institute (JDI), the Oversees Development and of the SEZ Summit that will be held in April this year. Minister Maru further informed him of his recent visits to the Philippines and Thailand to learn from south-east Asian neighbours of the successes of their utilization of the SEZs for economic growth and development.

“PNG is now walking across Asia to find investors and Australia can either join the trend or miss the opportunity. Under the Marape-Rosso Government PNG is in transition and is actively seeking investors from Philippines, Thailand, Vietnam and Malaysia to invest in domestic industries for onshore processing of natural resources and new dairy, rice and feed industries in PNG,” said Minister Maru.

Minister Maru whilst acknowledging Australia for agreeing to process visas for Papua New Guineans within two weeks in the country, said a lot more needed to be done to allow the issuance of visas upon arrival. Minister Maru said this was very important to encourage for trade and investment to flow between the two countries.

“PNG citizens are issued visa on arrival by Singapore, Philippines, Israel, UK and others but does not see the reason why PNG citizens are not issued visa upon arrival by Australia. More work needs to be done in this regard to allow the movement of people between the two countries,” said Minister Maru.

Minister also encouraged Australia to have a program in place for semi and skilled Papua New Guineans to access the Australia labour market. Minister Maru reiterated that besides the Labour Mobility scheme for unskilled workers, PNG was also keen on accessing opportunities for semi-skilled and skilled workers to work in Australia, for example, in the area of age care.

“PNG would really like to see more skilled labour moving to the Australian Labour market,” said Minister Maru.

Minister Maru extended an open invitation to Minister Farrell to visit PNG. Senator Farrell acknowledged PNG as a valuable partner and neighbour in an increasingly unstable world. He stated that Australia saw immense value in that relationship and was favourable to assist where possible.

Photo credit: International Trade and Investment Ministry of Papua New Guinea Facebook page

For the first time in over 24 years after approving the Pacific Balance Fund (PBF) and the Pacific Property Trust as Unit Trust Schemes, the Securities Commission of Papua New Guinea (SCPNG) recently approved the Lihirian Investment Fund Unit Trust as a new Unit Trust Scheme in the local securities industry. The wholly owned subsidiary of Mineral Resources Lihir (MLR) Capital Limited, the MRL Funds Management Limited made history by being granted two Capital Licenses by SCPNG. Minister for International Trade and Investment, Hon. Richard Maru made the presentation of the two licenses- a Trustee Mangers License and Funds Management License to MLR Funds Management Limited today.

“I want to congratulate the Board and Management of MRL Capital Limited for achieving this very significant milestone today,” said Minister Maru.

Minister Maru said Lihirian Investment Fund Unit Trust was granted the two licenses based on their performance and on their record where they managed the fund from the initial value of K60 million in 2015 to K700 million today.

“This represents an annual growth rate of an average of 10 per cent of this fund which is a very impressive record of performance,” said Minister Maru.

“I am also happy that MLR Capital Limited out of their annual profit of K100 million to K200 million uses 25% to support community projects in Lihir especially in health, education and infrastructure,” said Minister Maru.

Minister Maru, on behalf of the Marape-Rosso Government encouraged Lihirian Investment Fund Unit Trust to also look at managing funds from other individuals and companies around the country apart from Lihir.

“The people, especially our mothers and fathers and our SMEs are looking for low-risk and high yielding investment opportunities and the Lihirian Investment Fund Unit Trust presents a very good investment vehicle for them,” said Minister Maru.

Minister Maru also encouraged Lihirian Investment Fund Unit Trust to partner the Marape-Rosso Government to invest in low-risk investment opportunities in the Special Economic Zones that will be announced in May this year.

“One of the reasons why I am excited about today is if the Lihirian Investment Fund Unit Trust can grow these funds, they can take up investments in high yielding low-risk agriculture investments. I would really like to encourage the Lihirian Investment Fund Unit Trust to seriously look at long-term agriculture investments in Papua New Guinea,” said Minister Maru.

“Our country needs billions of Kina in new investments to grow the economy so supporting high performing funds managed by competent fund managers is a key policy agenda of the Marape-Rosso Government to support economic growth,” said Minister Maru.

“I also encourage other landowners in areas with resource projects to follow the successful path of the MLR Capital Limited,” added Minister Maru.

Photo: James Marape

The country's lawmakers have unanimously voted in favor of the updated investment law passed by PNG's parliament, specifying the intention to prevent foreigners from operating small businesses that are reserved for locals.

This law includes measures to ensure locals remain in control of businesses such as general stores and taxi and bus services without discouraging other foreign investment.

It followed a public outcry that local businesses face increased competition from Asian migrants. Papua New Guinea’s population is almost entirely indigenous, with a small fraction of Australians, Chinese, Filipinos, and other nationalities.

“It’s time our people take the lead,” said Prime Minister James Marape. “The law is a step toward protecting businesses that only Papua New Guineans can participate in.”

Dozens of business activities, from small-scale farming to owning a security company, are reserved for citizens under Papua New Guinea’s 1992 Investment Promotion Authority Act, but the law has lacked monitoring and enforcement.

The updated law aims to improve compliance so local businesses are protected while still encouraging foreign investment in industries where Papua New Guinea needs outside capital and expertise.

A local general store owner in PNG’s capital city, Port Moresby, said the new law is long overdue. “It took the government 31 years to come up with this bill to protect us from competing with foreigners doing the same business,” said the local, who requested anonymity.

“For example, we are competing in running trade stores in the settlements,” he said, referring to the urban communities that have sprung up as more people move to towns from the country’s highlands.

Marape’s government has a policy of developing small- and medium-sized businesses for indigenous Papua New Guineans.

A Bangladeshi expatriate who runs a store in one of Port Moresby’s settlements said the shop is leased to him for K10,000 monthly from a Papua New Guinean who was tired of family and relatives urging him for financial assistance towards customary and cultural obligations, such as bride price and haus krais (funeral expenses).

“We are doing business because the locals are not really competitive in running their own business. So, the law is good for indigenous Papua New Guineans to take ownership of their own business activities. But then they have to be committed, and their relatives should be supporting them by not asking too much for financial assistance,” the expatriate said.

Generally an influx of foreigners running small businesses reflects decisions and factors that are made by local businesses and their owners, the Port Moresby store owner said.

“Trade stores can be built, but then we rent them out to foreigners to manage due to social and cultural issues that most owners are obligated to because of their outlook and status in society. That’s how most foreigners initially run businesses that locals are supposed to run,” he added.

Papua New Guinea's resource-rich areas are located at some of the most rugged, mountainous, and treacherous terrains, and the designing, building, and maintaining of project site facilities in these resource areas require constant upkeep.

The process of creating fabricated units that can be quickly assembled has shifted as developers become more innovative in building structures faster and getting better quality control while reducing waste and carbon footprint.

Since the inclusion and start of the PNG LNG project in 2012, a number of prefabricated and modular building providers have emerged, notably PNGCR (formerly known as RED SEA Housing Company), Ark Pacific, PNG Forest Products, and Oilmin Ltd.

These companies are pioneers in this industry and have been servicing the mining and oil & gas sector by providing infrastructure to campsites all over Papua New Guinea. Their core services are designing and building campsites in which all supplied modular buildings are installed locally.

According to PNGCR, the intensity and rate of modular building providers have provided logistics and operation to PNG's petroleum sector by adapting to their changing nature of activities day to day in most campsites, from managing routine maintenance projects to emergency situations.

Over the years, these pioneers’ achievements have seen them bring in more manufacturing on campsites while combining it to benefit the landowners of project-impacted areas as well.

Apart from servicing tier-one clients of the oil & gas sector, partnerships have seen the companies provide and supply infrastructure for law and order, health, and other public sectors on various refurbishment and building projects throughout the country alongside other government entities.

Transitioning and adapting have been a big part of modular building providers. During the peak of the Covid-19 pandemic, their flexibility to adapt their services saw most of these companies change their product lines to adapt to the business demand by moving their core services of supplying camps in the oil & gas sector to providing structures across different economic sectors.

PNGCR

For instance, PNGCR provided all the support and infrastructure to the Australian Government and St. Johns to send mobile and testing clinics throughout the country, especially to remote areas.

The company has a strong partnership with St. Johns as well, in which they provide medical services for landowners of resource areas that live close to project-impacted areas.

PNGCR's Managing Director, Mr. Allen Tyson, who has been in PNG most of his life, said projects must support local businesses and focus more on driving local and national content, because most local companies who have been here since the LNG project started have been investing in the community and are still in business after PNG LNG.

Most have been through the difficult period of Covid, and it would be disappointing if upcoming projects do not provide opportunities to such local companies, he added.

"It’s really going to come back to the project owners. There's a lot of really good companies here in PNG who are able to service these projects that have stuck it out through the good times and the bad and have done it tough through the Covid period, and it would be great for these companies to rebound for the benefit of Papua New Guineans," Mr. Tyson said.

“Most companies that come in for resource projects disappear when the projects are over, and this does not create long-term employment for Papua New Guineans," he added.

For the past 12 years, PNGCR transitioning from RED SEA has consistently employed between 250 and 300 people and has been one of the country's leaders in manufacturing and supplying modular buildings.

ARK PACIFIC

With LNG projects about to take off in 2023, Ark Pacific’s Flat Pack modular building range has become sought after by the oil & gas sector given the remoteness of project locations, some of which are only accessible by river.

Ark Pacific’s low freight footprint -- up to 75 percent less than other prefabricated alternatives – is a key factor in the popularity of its building systems.

Ark Pacific’s General Manager, Cassius Ruka, also a longtime resident of the country, in a commentary last year said: “Due to its simple flatpack design, this means that unskilled workers in remote footprint communities can be used to assemble Ark buildings, which is, of course, beneficial to these workers and their families, and therefore to resource clients wanting to achieve their local content objectives.”

This also meant that construction sites installing Ark buildings during the peak Covid-19 period were relatively unaffected by travel restrictions, as majority of staff are local and not FIFO (fly in fly out).

Modification and the repurposeability of buildings are highly valued features of Ark’s building systems. “Particularly significant when building in PNG,” says Ruka, “is the fact that our buildings can easily be reconfigured and relocated to benefit footprint communities as schools, clinics, or libraries once clients no longer require them.”

PNG FOREST PRODUCTS

PNG Forest Products, a major player in developing this sector since 1954, have also been a dominant force throughout the years in providing transportable units with simple solutions for mining, gas and petroleum camp relocation. Its innovative products and services include their modern Duplex with an ensuite. This product has been found to be reliable and comfortable by its clients.

Recently, K92 Mining Ltd., who have been acquiring the services of PNGFPs, pointed out the significance of its modular units and how it has helped them minimize costs, time management and construction difficulties in a mining camp.

K92 Mining's Project Maintenance Superintendent, Reis Colley, highlighted: "As operations at K92 mine grew different accommodation options were considered until PNGFP proposed their transportable 2-bedroom individual ensuite unit with a verandah. We agreed and initially purchased 18 of these units and installed this established infrastructure, which allowed us to minimize disruption to existing camp rooms."

"As the modular unit is built in PNGFP's factory offsite, once delivered it only had to be lifted onto the footings and connected to plumbing and electrical services," Colley explained.

OILMIN FIELD SERVICES

Oilmin's Construction Division are providers and distributors of the Ezy House Units, which are multi-functional modular building systems, manufactured to the highest international and applicable local standards. The Ezy House construction system uses prefabricated components to build camps and other structures.

The units are designed for a variety of applications, with the product found in various industries including government, construction, private and exploration sectors. Currently, their partnership with Ezy House is in line with their commitment to provide innovative and cost-effective building solutions for their clients.

Ezy House is a versatile solution for a wide range of scenarios. Some of the advantages of using Ezy House include faster construction time, affordability, assured highest quality, and increased flexibility. This means Ezy house components can be customized to meet specific requirements, and can be adapted to different building designs.

The Ezy House concept can be used in housing developments, remote locations, temporary structures, mining camps, and disaster relief. Oilmin’s partnership with Ezy House is a testament to their commitment in providing innovative and cost-effective solutions for their clients.

What to expect

Consistent with their strategies, these companies’ next stage of growth will be targeted towards adapting to any unexpected changes and focusing on local and national content, while supporting infrastructure for new and upcoming resource projects in the country.

The resource sector in PNG has seen great change over the past year. The rise and establishment of new resource projects seem to be the biggest forecast for future projection.

While service providers for this important sector may not have a certain projection of what the future will look like, there’s no other industry that can adapt to these sudden changes better than the modular construction industry, as these companies have proven.

Photo credit: Twinza Oil

Regulatory issues between the Government and Twinza Oil Ltd. need to be addressed before discussions on the Pasca A project in Gulf recommence, Prime Minister James Marape said.

In a press conference, Marape stated that Papua New Guinea is governed by the Constitution, and there are laws that regulate the mining and exploration activities.

The Prime Minister highlighted this in reminding foreign investors to comply with all the necessary mining and petroleum requirements.

Marape made the statement when referring to the status of the Pasca A project in Gulf, after regulatory issues emerged between Twinza Oil Ltd and the State. He said some of the requirements for the exploration and mining licenses were not met by the investor to allow it to proceed with the project.

“I just want to encourage all our foreign investors in our country, that we don’t run a banana republic, we have due processes in our country, and you have to comply with all requirements of law in our country,” he said.

“If you acquire an exploration license then you have to deliver to the intent of that license. You have a retention license in the petroleum space, then you have to deliver to the conditions of that retention license,” the Prime Minister said.

“When you are applying for development license and you’re in the APDL (application development licence) stage then you must comply with the rules and requirements of the process.”

Marape said the Department of Petroleum has done its part towards the Pasca issue, meaning that now it only needs a review by the national government.

“The Twinza and the Pasca project is a small low-hanging project within reach. The petroleum department have done their bit with the issues that have been outstanding, and now the project partner has given his view, which will be subject to a review,” he said.

The Prime Minister said his government wants to tick off Porgera, Papua LNG, P’nyang and Pasca LNG projects, including the Wafi-Golpu projects, soon.

Mr. Marape was not able to provide the actual commencement dates but is determined to provide a firm statement on these proposed multibillion-kina projects five months from now.

Twinza’s Country Manager, Roppe Uyassi, said the company was ready to have the Pasca gas project in progress and was awaiting reengagement with the Government through the state negotiation team.

Photo: Greg Pawson

Kina Bank's CEO, Greg Pawson, has announced plans to expand the bank's presence offshore due to the government's decision to increase tax on banks this year. Pawson described the tax increase from 30 per cent to 45 per cent this year as a "disincentive for growth" and said, "We will be bringing forward our plans for offshore expansion."

"We are still very much committed to PNG," Pawson added, "however a tax increase to the banking sector will impact the confidence of our investors who provide us with the capital to expand and grow. A 45 per cent tax rate would be among the highest in the world, if not the highest. We have been reviewing the potential for us to expand offshore, and the proposed tax hike certainly gives us the motivation to progress this."

Pawson said Kina Bank is reviewing all its planned investments for this year, including new regional branches, digital technologies, and concessional lending to small-medium enterprises (SME) and the agriculture sector. "Some of these, including all concessional lending (SME, agriculture and home loans), will be suspended if the tax hike goes ahead," he explained.

"We are vehemently opposed to the tax increase," Pawson continued, "and it will impact future investments, reduce competition, and play to BSP's already dominant market position. Sadly, the treasurer (Ian Ling-Stuckey) has made no concerted effort to consult with the banking sector directly. We will continue to challenge it."

Photo credit: PNG Chamber of Mines and Petroleum - Dr Albert Mellam, PhD

Credit Corporation Finance Ltd (CCF), a subsidiary of Credit Corporation (PNG) Ltd, has received approval in principle from the Bank of Papua New Guinea (BPNG) for a banking license. According to the chairman of Credit Corporation PNG, Dr. Albert Mellam, "the BPNG offered an approval in principle for a period of 12 months to transition CCF’s current license from a financial institution to a commercial bank." Mellam expressed his gratitude for the approval, calling it "a milestone in the group’s new strategic direction, which included becoming a fully-fledged commercial bank and ultimately aiming to be listed on the ASX."

Mellam went on to say that Credit Corporation has been lending for 45 years in Papua New Guinea, and that its board and senior executives have extensive experience in financial services and banking. "We are well-positioned to become a new bank given we have a strong understanding of the local market and what is required to be a successful financial services company," he said. "We have already made some significant investment decisions to set ourselves up for success, including upgrading our core banking system, introducing a new web-based application and enhancing our processes, while recruiting new talents and upskilling our people."

Mellam also emphasized that Credit Corporation is committed to delivering a high level of service to the people of Papua New Guinea. "We are proud of our heritage, which will enable us to become a truly home-grown PNG bank," he said. "PNG needs more banking competition to help reduce costs and expand services such as e-banking for customers."

Photo: Dairi Vele

The State Negotiation Team chairman, Dairi Vele, has announced that the process of reopening the Porgera gold mine in Enga, which is valued at billions of dollars, is almost complete. In his words, "The new Porgera is substantially complete and is progressing." Vele added that all parties involved are now in the process of verifying that documents are in order and accurately reflect the understanding of the various agreements. He stated:

"One of the things about new Porgera is Barrick is putting up the money to restart the mine, and the sales of the project in new Porgera will pay off everyone’s cost. That’s different to how projects are normally done in PNG were the state has to borrow big money upfront to participate and wait for the loan to be repaid before we start to receive dividends."

Vele clarified that the tax issue between the Internal Revenue Commission (IRC) and the Porgera Joint Venture (PJV), which is a collaboration between Barrick Gold Corporation and the Porgera Landowner/provincial government company Minerals Resources Enga, is linked to the old Porgera mining operations and is not a direct result of negotiations for the new Porgera, which is 51% owned by the State, provincial Government, and all landowners. He said:

"The relevance of the tax issue where IRC is seeking a payment from PJV and therefore Barrick and MRE need to confirm that amount. So hopefully, that’s a couple of weeks out and if that issue is sorted out then we can move quickly to access the start-up funds and open the new Porgera Mine."

Vele also noted that the new Porgera Mining Limited has been established and is in the process of applying for licenses, transferring the old mining operations and assets from old Porgera into the new company. He explained:

"Both sides have to confirm that the documentation and reflect the understanding of the agreements. So hopefully, that’s a couple of weeks out and if that issue is sorted out then we can move quickly to access the start-up funds and open the new Porgera Mine."