Julius Chan demands greater benefits from mining for people

Newcrest making K1 billion a year while the people of New Ireland get just 3% claims Chan…

But why didn’t Chan address the situation when he was Prime Minister?

Why is his son, New Irelander and current Mining Minister, Byron Chan so silent?

Maybe these politicians are just as greedy, narrow minded and selfish as the mining companies?

julius chan

Julius Chan demands greater benefits from mining for people

Post Courier

NEW Ireland Governor Sir Julius Chan has issued a statement concerning the benefits received from the Lihir Gold Mine by the company Newcrest Mining, the State and the people of New Ireland.

“Recently Newcrest issued a press release saying the mine had paid K376 million in royalties over a ten year period.

‘It seems they think that is a lot of money.

“But when you look at it the total only represents K37.6m each year that the people of New Ireland have received in royalties.

“Compare that to what Newcrest and the National Government have received,” said Sir Julias.

Newcrest has actually only operated the mine for five years since late 2010.  However, in that five years, according to Newcrest’s own annual reports, the difference between the cost of production and the sale price of gold means they have made nearly K5 billion in profit.

“So during  the time that the people of New Ireland were receiving only K37.6m per year in royalties, Newcrest was making nearly a billion kina per year.  That is over twenty-five times as much as the people of New Ireland,” Sir Julias said.

Sir Julius also said that during the same time “the National Government has been making over K300 million per year in various taxes, mining levies and other fees.

“This means National Government is making nearly ten times as much as the people from whom the wealth actually comes.

“So when you look at it, between the company and the National Government they are making about K1.3 billion per year, while the province is only receiving K37.6 million in royalties and a pittance in special support grant.

“So the people of New Ireland are only getting about 3% of the benefits coming from their own ground.  This is unacceptable.”

“The situation must change, we need to increase royalties to be consistent with international practice.

“Royalties should be set at 10% of annual revenues.  Special Support Grant should be increased from the current ridiculous level of ¼ of 1% to 10%.  The same with the tax credit scheme, increase it from ¾ of 1% of assessable income to 10% of assessable income.”

Sir Julius concluded by saying that the people of Papua New Guinea should refuse to allow any further exploitation of their natural resources until the National Government and the mining companies are willing to direct the lion’s share of the benefits to the people from whose land the wealth comes.

2 Comments

Filed under Financial returns, Human rights, Papua New Guinea

2 responses to “Julius Chan demands greater benefits from mining for people

  1. Steve Longton

    As with all nations, just because you own the land or are the tradional land owner it does not neccessaryly include the ore that lays below the surface. What is paid is a royalty for allowing access to mine. If the landowners are unhappy then they should set up their own mining company and do all the work. Its very easy to sit back do nothing and expect everything. These companies employ 1000’s of PNG people, these people earn an income and stimulate the PNG ecconomy and then pay taxes. Julius should go back and do his figures again and analyis the true net cost benefit to PNG as a whole. Without mining, oil and gas what does PNG have, coffee and ???. Julius should be mindful of not biting the hand that feeds his country.

  2. Just looked at the Chairman’s annual report for 2015 for Newcrest Mining Limited which states:
    “The focus on cash is delivering results,
    with AUD 1,086 million of free cash flow
    generated in the year, AUD 953 million
    higher than the previous financial year”.
    It is very easy for a mining company to exploit the landowners by tricking them that “the landowners will be better off”. The exploitive mining companies do not consider the landowners, their environment or drinking water. What bites the hand of the people of PNG is the pollution and devastation to their environment not the oil, gas or mining that makes mega bucks for companies who focus on their cash flows.
    With mining, all that the people have in PNG is big holes in the ground and water that they can no longer drink.

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