Authority Forecasts Total Revenue Increase To K16b
The Mineral Resources Authority is forecasting that the total mining revenue for 2020, may increase to K16 billion with all things remaining equal.
The mineral regulatory body, however, it did not rule out impacts of coronavirus could drastically change this forecast if it infiltrates mining operations throughout the country.
MRA regulatory operations executive manager Roger Gunson, in response to queries from this daily pinpointed that the increase in gold prices is beneficial for PNG thus; the sustained increase in the gold price for most of the first quarter of 2020 will support or boost this forecast It also assumes that most mines will continue at the same production level as last year, although mines such as Porgera and Kainantu (K92) are expected to increase production.
“In the event that the gold price remains around the current level (in the $UED1500-1600 range), and because gold accounts for 70 per cent of PNG’s export mineral revenue, the total revenue could increase to beyond K17 billion.
“This is despite the Lihir production downgrade,” Mr Gunson said.
“An increase in the gold price, especially if sustained is an incentive for gold mines and alluvial miners to increase production to capitalise on higher prices as mentioned above.”
He further stated that MRA anticipates most mines to continue production at a similar level to 2019, when total mineral revenue, including the K551 million from alluvial sector achieved K15.279 billion and 2018 was K11.908 billion, reduced by earthquake and drought at Ok Tedi. “However, impacts from the COVID-19 pandemic are unknown.
“But could potentially have significant influence on mineral production for the remainder of 2020 if the virus spreads throughout PNG and into mine camps and work environments. “Operations may have to be shut down or restricted as staff are quarantined.
“Which at the moment appears to be at least a period of 14 days, of which shipping schedules and receiving ports will be impacted. “We have already observed this impact in Wahun, China where the virus started and only after almost three months businesses are being considered for re-opening,” Mr Gunson said.
In addition, the stock market has plunged over the past two weeks and the price of oil has also dropped significantly, with talks of recession by a number of economic and financial commentators.
“PNG will not avoid these international impacts, and with an already weak economy may further struggle to recover even under the government IMF initiatives,” he said.
“As a barometer for PNG’s economic health, the Oil Search share price has dropped substantially to less than $AUD3.00 as the financial contagion spreads.”
Mr Gunson further reiterated that MRA continues to monitor the situation, both within and worldwide. Continue reading at https://postcourier.com.pg/authority-forecasts-total-revenue-increase-to-k16b/ | Post Courier