Call to increase landowner royalties


Silul: ‘Newcrest has made K5 billion in profit from Lihir’

Post Courier | March 05, 2017

DEPUTY Governor of New Ireland Province Ambrose Silul has called for greater and more equitable distribution of wealth derived from resource projects in the country.

Mr Silul was responding to recent reports released by Australian miner-Newcrest Limited on royalty payments paid to the New Ireland government, Nimamar Local Level Government and the special lease landowners to the tune of K69.8 million in 2016.

Mr Silul said while this may seem like a lot of money, it is nothing compared to what the national government and the company are receiving.

“Newcrest has actually only operated the mine for six years, since late 2010.

“However, in the first 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 K37.6 million 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,” he said.

Mr Silul who is also president of the Nimamar Local level Government said that at 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.”

He said it was high-time this trend changed.

“We need to increase royalties to be consistent with international practice.

“Royalties should be set at 10 percent of annual revenues.

“Special support grant should be increased from the current level of one-quarter of one percent to 10 percent.

The same with the tax credit scheme increase it from three-quarters of one percent of assessable income to 10 percent of assessable income.

“We are not doing this for the people of New Ireland alone.

“Once we get these increases we will share 20 percent of our total benefits with the non-mining provinces in the country.

“We think every mining province should take this approach.

“It will benefit all Papua New Guineans,” he said.


1 Comment

Filed under Financial returns, Papua New Guinea

One response to “Call to increase landowner royalties

  1. LMM Neuendorf (Dr)

    At last, someone else has woken up to the reality of the deficiencies and the inadequacy of the royalty and tax credit schemes that have been one sided for decades with the government colluding with foreign multi nationals to reap people off and leave them with pittance.

    Papua New Guinea is way behind on internationally accepted practices in royalty distribution to land and resource owners. The government’s current laws give a biased edge to multi nationals that have no interest in people other than their own bank balances. The rhetoric by multi nationals and the government that the compensation schemes and mechanisms for land and resource owners is good is a monolith that belongs to ancient times.

    The government must revisit and urgently clear the air and ensure benefits to land and resource owners is justifiably corrected.

    The government treats its own people with disdain, rather succumbing to the lure of “money” and making crooked politicians line their own pockets at the people’s expense.

    It is well known in contract and negotiations circles about bribery and corruption where certain politicians often want “their cut” as part of the transactions for the right by multi nationals to do business in Papua New Guinea.

    It happens so often that multi nationals have to factor into their negotiated price that includes the “cut” otherwise these companies will not win any contracts.

    People are so blinded by “fast money” that they are prepared to sell the people and the country’s birthright to greedy strangers.

    When such actions are called “Performance Bonuses” that are not in a government officer’s or politician’s job contract, then something is really wrong.

    Never use globalisation as an excuse. While there are benefits of globalisation, every country and its leaders must act for the betterment of it’s citizens. No country should alienate its own people for favour. It is high time Papua New Guinea respects its citizens and their rights. Land and resource owners rights must be protected.

    It is high time the government takes the decisive steps and demonstrated courage to ensure the country and the people, in particular, benefit significantly in royalties and other added benefits.

    Don’t’ make Papua New Guinea a beggar, let alone the people whose wealth the government and the multi nationals are taking.

    Until the government realises that it is squandering and has been squandering the peoples’ wealth, land and resource owners will remain marginalised with the people’s wealth propping the pockets of multi nationals.

    Wake up Papua New Guinea.


    Dr. LM Neuendorf

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