• PNG Business News

Impact of mine’s closure will be evident in a few months: Aitsi

The impacts of Porgera mine’s closure will become more evident over the next two to four months as the income stream of contractors and suppliers dries up, according to Credit Corporation Ltd.

Chief executive officer Peter Aitsi said impacts of the mine’s closure would result in loss of income for landowners, contractors, suppliers, provincial governments and the government.

Aitsi said generally in its business around the country, Credit Corp had not seen an increase of leased assets being repossessed to suggest the impacts of the Covid-19 and closure of the mine.

“At this stage, we have not recorded any significant increases comparing to prior years in repossession of leased assets or properties,” he said.

He said the impacts of the Covid-19 on business was largely disruptions to customer and staff movements caused by travel and movement restrictions introduced to prevent the spread of coronavirus.

“The real issue for PNG has been the underlying deterioration of the economy over the last two years.

“PNG’s economic conditions reflect the overall weak global economy but I believe are further compounded by the lack of progress of our major resource projects which has resulted in a significant decline in levels of foreign direct investment,” he said.

According to an economic report published by ANZ last week, the government was taking a tough negotiating position with potential investors seeking to achieve larger equity, greater landowner involvement and more opportunities for SMEs and local communities in project areas.

“However, mining capital is not a limitless pool, and PNG, notwithstanding its unique value proposition including rich gas is competing against discoveries in Mozambique, Guyana, Brazil and the United States,” the report highlighted.

“The government needs to strike the right balance between national interests and investor interests in negotiating the distribution of project benefits.

“The Prime Minister (James Marape) has said he wants to finalise all current project agreements including P’nyang, Wafi-Golpu and Porgera by Sept 16, which coincides with PNG’s Independence Day.

“We hope win-win agreements can be reached by then to lift business confidence and set PNG up for several years of strong GDP (gross domestic product), employment and revenue growth.”

Source: https://www.thenational.com.pg/impact-of-mines-closure-will-be-evident-in-a-few-months-aitsi/

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