Category Archives: Mining

Wafi-Golpu project worth K12.7 billion

September 1, 2017
Source: Post Courier

The Wafi-Golpu project being developed by Newcrest Mining Limited in the Morobe Province is an investment collectively worth US$4 billion (K12.7b).

It has the potential to contribute substantially to the economic growth not just in the region it is located in but the country as a whole.

Newcrest’s chief executive officer (CEO) Sandeep Biswas said this yesterday during the signing of a Memorandum of Understanding between the miner and the Australian High Commission to formalise their collaboration in support of development projects in PNG.

Mr Biswas said he was pleased to be back in the country, adding this was his first visit since the formation of the new government.

He said he was particularly pleased to hear from government and more particularly from the Prime Minister Peter O’Neill and his deputy and Minister for Treasury Charles Abel on the plans on how they intend on getting the economy back on track.

He said the company was a long term partner not just of government but the country and his visit was to reinforce that fact.

“The 100 plan that has come out recently, it was really good to see a number of items in there that seek to maintain the fiscal and regulatory certainty in the country,” he said.

He said the Lihir Gold project, which the company currently operates in PNG was already making significant contributions not just to the local economy but nationally as well and that the Wafi/Golpu project had the potential to add to that.

In that regard he said the company was pleased it is part of the 100 day plan and that the continued to looked forward to working with the local and national government to try and move the project forward.

 

Tuke to mediate mine dispute, review agreement

August 29, 2017
By ZACHERY PER

 
MINING Minister Johnson Tuke has intervened to resolve the standoff at the Bilimolia gold mine which led to the destruction of mining equipment last week.

 
He visited the Bilomolia landowners and the K92 management which operates the mine to discuss the review of the memorandum of agreement. They will formally meet on Friday this week to review the agreement.

 
“I will get the Mineral Resource Authority,  K92 mine management and Bilimoia landowners to review the existing agreement and to find an amicable solution to the standoff,” Tuke said.

 
He told villagers at Bilimoia One that it was fortunate that the mine was in his electorate and that he was recently appointed as the Mining Minister.

 
On Thursday last week, the landowners stormed the mine site at the foot of the Irumapimpa Mountain and destroyed millions of kina worth of mining equipment. The villagers told Tuke that they had been denied spin-off benefits to provide catering, transport, security and other services as specified in the agreement.

 
Bilimoia Landowners Association chairman Neneti Tesai and members Isaac Uringke, Dawa Baiyaki and Linus Tau said they were disappointed.

 
The equipment damaged included the generator that supplied electricity to the underground mine.

 
A number of vehicles including an underground truck were set on fire.

 
Chief Operating Officer John Lewins said 70 per cent of landowner benefits went to Bilimoia while 30 per cent went to other landowners. He said out of 500 employees at the mine, 300 were locals, 170 from other districts and 30 expatriates.

 
Lewins said  wages paid to landowners amounted to more than K6.6 million per annum through the landowner entity Bilimoia Development Company.

New Authority to look after resource projects

BY MIRIAM ZARRIGA

A new authority will push through 15 new major resource projects under the supervision of the Ministerial Economic Committee (MEC).

The Treasurer who is also the chairman of the MEC through the national energy authority, a new authority to be established by the department of Petroleum and Energy and the Mineral Resource Authority, Deputy Prime Minister Charles Abel said.

“Under strengthening our economic base, the Ministerial Economic Committee which the treasurer is the chair through the National Energy Authority, which is a new authority we will establish over the department of Petroleum and Energy and the Mineral Resource Authority to drive major new resource projects under supervision of MEC through those agencies we want to give some more input, prominence and energy,” Mr Abel said.

The new resource projects will include the Wafi-Golpu project which is into early works, FEED for the PNG LNG Project expansion in 2018, get on with early works for the Papua LNG, and the pre-feed for Western LNG to be announced in December 2018, including other projects like the Freida mine, according to Mr Abel.

Tuke Seeking Independent Audit on Gold Exports

BY MELISHA YAFOI

Mining Minister Johnson Tuke is seeking the establishment of an independent audit on all PNG gold shipments and offshore facilities where they are refined.

This has never directly been done and Mr Tuke said “neither the Bank of PNG nor Treasury Department has the technical capacity and instruments to authenticate such data provided by the industry.”

“This regards gold only and excludes other precious metals,” he said.

However, he will not be arbitrary about it and wishes to open up dialogue with all players in the mining industry.

The matter is one of two discussion papers the minister is initiating including the possible formalising of the small-scale alluvial mining sector to capture tax credits.

Mr Tuke said the discussion paper must be seen by all stakeholders as having elements of transparency and good governance in the provision of credible reports by mining companies.

Mr Tuke said the audit concept might be a disincentive but he prefers it “be seen to compliment or forms part of the transparency initiative currently supported by the mining industry and the PNGEITI Secretariat at Treasury.”

“This can be included as part of EITI structure, or to a certain extent, seen to compliment PNG EITI processes.

“The two discussion papers will be open to wider industry stakeholder consultations and I will stand to appreciate any pros and cons prior to any recommendation to the National Government,” he said.

Mr Tuke said the idea of these discussion papers came about after learning the industry has been challenged in the last ten years with fewer investors coming into the country with existing exploration tenements gone into recession.

He said this was largely due to the downturn in global metal prices.

“I would like to see investors and new players coming into the country and I’m sure our existing regulatory and policy framework provides the incentives which are economically sound and conducive,” he said.

He expressed optimism on the Wafi-Golpu and Frieda River proposed mine developments which he wants to see come on stream now.

Treasury seeks redress on mineral sector’s tax

August 24, 2017
Source: The National | Clifford Faiparik

DEPUTY Prime Minister and Treasurer Charles Abel has questioned why no taxes have been collected from the export of gold, oil and gas to fund the Government’s development plans.

“Why is this happening when oil and gold are leaving our shores? Gas is also being exported in large quantities,” he said.

“Why are we not getting taxes to fund free education, free healthcare, roads and bridges, infrastructures, provincial and district services improvement programmes?”

Abel raised the concern during a meeting with Internal Revenue Commissioner Betty Palaso and her officers in Port Moresby.

He said the current tax collection system must be addressed so that everyone paid their fair share of taxes.

“We need to look at a simple tax system as the current one is complicated,”Abel said.

“I will be taking some steps to make sure everybody — whether corporate or individual — pays taxes.  I have noticed that there has been a decline in taxes from the mineral sector over the past 10 years.

“Mineral resources are leaving our shores but we are not collecting tax on them.

“Taxes from these areas contributed to about 20 per cent of the budget revenue in years past. Today, it is almost zero.”

Abel said the supplementary budget, to be tabled next month, would address the declining state of the national economy.

“Tax revenue is down and cost of living is increasing,” he said.

“That’s why we are having a supplementary budget.

“We need to collect every toea.”

“The fact is that the government’s revenue is not growing at the same rate as the gross domestic product (GDP).

“There are a lot of resources leaving our shores but why are there issues with the economy such as the shortage of foreign currency reserves and high interest rates?”

Plans mooted for small scale bullion industry

Feasibility studies will be undertaken to set up a gold bullion industry for the K300 million small scale alluvial gold mining sector.

Mining Minister Johnson Tuke announced that he will be introducing a discussion paper seeking advice from all relevant agencies “if it is feasible to establish a gold bullion industry right here in the country capturing small-scale alluvial mining.”

He said he will need the opinion of the Department of Minerals Policy and Geohazards, Mineral Resources Authority, Treasury Department, Bank of PNG, Kumul Holdings Limited and industry players including alluvial gold buyers and exporters.

Mr Tuke said given the high revenue earnings, the alluvial mining sector needs to be regulated in order to bring exporters into the government tax revenue stream.

“Alluvial miners’ component of mine export revenue is an estimated K300 million per annum and we must devise a plan for more government input into this untapped sector,” Mr Tuke said.

“The K300 million per annum forms part of the base case in setting this specific gold bullion industry and I would like it to happen on commercial terms with government-private business arrangement on a 50-50 pro-rata basis.

“This will not only increase productivity and export revenue in the alluvial sector but to also justify future undertakings for 100 percent downstream processing of gold here.

“We need to link up with the alluvial mining communities and provide necessary assistance to them.

I would like to see alluvial mining being regulated at an export level with a view to bringing alluvial gold exporters in the government tax revenue stream.”

Mr Tuke said the discussion paper on building a gold bullion industry is consistent with the current Government’s focus to grow the economy and must be seen as part of revenue-generating measures for stakeholder consultations and input.

“I must state clearly here that this will not affect established mining operations or companies which I understand are tied down by overseas contractual obligations,” he said.

Mining review to be conducted

BY MELISHA YAFOI

Minister for Mining Johnson Tuke says he will ensure the overdue review of the Mining Act 1992 and outstanding polices will be undertaken and completed under his term.

Mr Tuke said his predecessor Byron Chan had done a tremendous job in that regard it will be his task to see changes were implemented.

He said export revenue generated by the industry were significantly large compared to other industries.

He urged senior management of both the Department of Minerals Policy and Geohazards (DPMG) and the Mineral Resources Authority (MRA) to perform their mandated roles as they are competent technical advisors he will rely on.

He said the department and the ministry needs to work together as a team to ensure the industry moves forward and is consistent with the regulatory and policy framework in place for the next five years.

“We must admit that the downturn in mining activities is attributed largely to external factors, amongst others, one being the falling metal prices, which we have no control over,” he said.

Mr Tuke said he would like to see the two large mining developments in Wafi-Golpu and Frieda come on-stream, while those under exploration open during his term.

“The O’Neill government remains positive and focused on growing the economy and it is the government’s agenda to integrate new-revenue-generating measures and mining as one of the biggest export revenue earners has all the credentials.

“In my term, I would like to see investors and new players coming into the country and I’m sure our existing regulatory and policy framework provides the incentives which are economically sound and conducive,” he said.

Mr Tuke reiterated that the country has huge potential in the extractive industry. He said having world’s renowned mining companies operating in the country is a show of confidence in the country for existing and new players.

He appealed that all mining companies discharge their community obligations through the various benefit packages as he will ensure to conclude any Benefit Sharing Agreement that are being reviewed.

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