Tag Archives: Chamber of Mines and Petroleum

Resource Industry Does Not Manipulate MRA : Chamber

Post Courier | September 20, 2019

The amended MRA Act passed by Parliament last year has removed all industry representation from the board of the Mineral Resources Authority, the PNG Chamber of Mines and Petroleum said yesterday.

The passage of the revised Act in February 2018 effectively removed the industry from the MRA board.

Therefore, claims by Jiwaka Governor Dr William Tongamp in the National newspaper on Monday September 9 that industry controls and manipulates MRA are factually incorrect and misleading, the chamber states in a statement yesterday.

Furthermore, when the industry representatives sat on the MRA board, they have always acted professionally and always in accordance with the Act.

It is unfortunate that Dr Tomgamp has cast aspersions on the reputation and good standing of many professional Papua New Guineans that serve on boards like the MRA and other State authorities.

The Chamber further dismissed claims by the governor that information published by MRA following the slurry spillage at the Basamuk Bay were provided by the ‘indus- try players and not independent’.

MRA and CEPA are independent regulators and our observation is that they have responded to this matter professionally and it is best that the Governor seeks clarification directly from State authorities, it stated.

It is best that Dr Tongamp seeks clarification directly from State institutions on the process and procedure they have followed.“We would welcome any opportunity to meet with Governor Dr Tongamp to explain the role of the chamber and the contribution the mining and petroleum sector makes to PNG’s economy as well as the wider sector through investments in health, education, training, landco companies and basic infrastructure across Papua New Guinea.”

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Drop In Mineral Exploration ‘Threatens Mining Industry’

Mineral exploration in Papua New Guinea

Melisha Yafoi | Post Courier | June 19, 2019

The steady decline in exploration activities particularly mineral exploration is a grave concern for the mining industry [but really for nobody else!].

PNG Chamber of Mines and Petroleum president Gerea Aopi said yesterday that the sector has been depressed and it is of grave concern for the chamber and the industry.

Mr Aopi said the decline threatens the sustainability of the mining industry which has been the back bone of PNG’s economy for more than three decades, adding that exploration is the lifeblood of a vibrant resource sector.

While commenting on this, he said they want to work more closely with the government on the revised Mining Act as it is an important policy that has taken more than a decade to complete.

Mr Aopi said the industry is concerned that some of the changes that have been proposed will have severe negative impacts on the immediate and long-term both existing and proposed projects, to the detriment of PNG’s economy.

“It is important that fiscal and regulatory settings achieve a balance between the expectations of the people, good governance of the nation’s mineral wealth, and the requirements for attracting long-term investments.

“A sound legislative framework provides for a fair distribution of returns between the developer and the state, security of tenure to its investors, and stability of investment terms,” he said.

Mr Aopi said recently the chamber and the mining industry together have contributed to the review currently being undertaken by the government on the country’s Mining (safety) Act and regulations.

“We are fully supportive of this process and are happy with the close collaboration we are having with the government on this review process.

Having an up to date regulation that ultimately promotes the safety of our mine workers and our operation is paramount,” he said.

“We are also ready to support the government’s vision to establish a petroleum resources authority. “We’ve stated publically that industry’s position on many occasions and our position remain steadfast.”

Mr Aopi said the establishment of a strong, robust and efficient regulator that is financially autonomous will have the capacity to promote increased oil and gas exploration and assist the government in regulating petroleum industry activities.

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Don’t Listen To Aopi, Says Lower Porgera Association

Jerome Ikuavi | Post Courier | March 5, 2019

THE Lower Porgera Association Inc has thrown its support behind the Resource Owners Federation of PNG over a call by the Chamber of Mines and Petroleum president Gerea Aopi to the national government last week not to delay the renewal of the Porgera Special Mining Lease (SML).

Association chairman John Pokoli in a statement to the Mineral Resources Authority Chief Mining Warden stated that due to the continuous ignorance by the mining company, the group lodged its objection to the Mineral Resources Authority (MRA) on September 24, 2018.

“Our objection was in regards to Barrick Porgera, a Canadian mining company, that has become a controversial mine over human rights abuse and environmental issues and the company has been operating in PNG with total impunity,” he claimed.

MRA Chief Warden Andrew Gunua while replying to the objection by the association advised that the objection will be compiled with the warden hearing report which will be forwarded to the Mining Advisory Council (MAC) for its consideration in determining the grant or refusal of the application.

Mr Pokoli said that the association had submitted its claims for environmental damages as per the Ministerial Determination (MD) to the Barrick Porgera including the head office in Canada, Barrick Corporation chairman and the government however has not received any response from the respective authorities to date.

He said the association advised the government not to listen to the Mr Aopi because he does not come from the mining area and has not felt the environmental impact.

“We call on Gerea Aopi to advice Barrick to adhere to set laws of this country,” Pokoli said.

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Ministers and bureaucrats set for tax payer funded Xmas shopping in Sydney

Christmas shopping in Sydney for Ministers and mining sector public servants will once again be funded by the PNG tax-payer.

PNG’s Premier International Conference Set For December

Post Courier | October 25, 2018

PAPUA New Guinea’s premier international conference, the PNG Mining and Petroleum Investment Conference will be staged this year in Sydney, Australia from December 3 to 5.

Hosted by the PNG Chamber of Mines and Petroleum, this will be the 15th conference that has been held outside of PNG primarily for potential investors and major players in the mining and petroleum industry.

More than 700 delegates and exhibitors from resource and service companies, government organisations, landowner groups, international investors and financiers, and aid organisations are expected to attend the conference.

Themed PNG Resources Industry: Investment and Partnership to enable PNG’s Growth and Development, the conference will once again showcase the exciting developments occurring in PNG’s resource sectors, as well as highlights from PNG APEC 2018. It will also provide a comprehensive technical update on the current and proposed projects, new discoveries and exploration.

The event offers an excellent opportunity to meet all the players in the PNG mining and petroleum industry, including financiers, government, service companies and contractors, and for joint venture discussions, networking and promotions.

Highlights will include the performance and proposed expansion of the world class PNG LNG Project, progress of the planned Papua LNG project based on the major Elk-Antelope gas fields, as well as updates on the mega-sized Wafi-Golpu and Frieda River copper-gold prospects.

The conference comes directly after the APEC 2018 Leaders’ week.

Outcomes and successes of this global forum will be highlighted for the first time in the mining and petroleum conference and will be a feature of the overall event.

Key government Ministers will continue their post APEC partying in Sydney

Prime Minister Peter O’Neill, will deliver the opening address followed by speeches during the event from Deputy Prime Minister and Treasurer Charles Abel, Mining Minister Johnson Tuke, Petroleum Minister Dr Fabian Pok, Minister for Communication, Information Technology & Energy Sam Basil, Environment and Conservation Minister John Pundari and Minister Responsible for APEC Justin Tkatchenko.

In focus also will be the structure of the PNG resources industry’s fiscal regime and the management of landowner benefits and growth in business development opportunities.

Experiences from the international firm Arctic Slope Regional Corporation a locally owned Alaskan conglomerate will highlight their achievements and challenges in managing a sustainable community business.

Mr Tkatchenko will speak on the outcomes and successes of the PNG APEC 2018.

The conference will also feature an international guest speaker Professor Paul Stevens, a distinguished fellow at Chatham House, the Royal Institute of International Affairs in London.

Prof Stevens will be providing valuable insight into the global oil and gas market, with focus on the outlook for PNG and its new developments. He is also a professor emeritus at the University of Dundee and has published extensively on energy economics, the international petroleum industry and economic development issues, among others.

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Mining Industry Wants Us All To Worship Its False Gods

The Mining Industry loves to tell us how much it contributes to Gross Domestic Product and Export Earnings and falsely links these two metrics to our development goals (see a typical story below).

GDP and Export Earnings are two false gods that absolutely do not reflect the quality of life or standards of living for ordinary people. GDP and Export Earnings can be soaring while ordinary citizens are plunging deeper and deeper into poverty.

GDP and Export Earnings simply tell us how much money the mining industry is stealing every year.

GDP is the monetary value of all the goods and services produced in the country:

  • GDP is NOT a measure of the standard of living or quality of life.
  • GDP ignores ‘externalities’ like pollution, environmental damage, social costs etc
  • GDP ignores where the wealth ends up and how it is distributed
  • GDP ignores access to basic services like health and education
  • GDP ignores where the value comes from – a country selling off all its assets will have a high GDP until all its assets are sold, it will then be bankrupt!
  • GDP ignores the costs of government debt – a country borrowing lots of money to fund its spending may have a high GDP until it goes bankrupt.

What the mining industry never talks about is how much tax it pays to the government, maybe because recent analysis shows mine workers in PNG pay more tax than the mining companies!

LOOP PNG | August 20, 2018

The mining and petroleum resource industry continues to be a key contributor to Papua New Guinea’s development goals, says the PNG Chamber of Mines and Petroleum.

The industry contributed over 26 percent of PNG’s Gross Domestic Product and around 80 percent of the nation’s export revenue valued at K23 billion (approximately US$7.3 billion) as of September 2017.

The industry also directly employs over 20,000 people, with significantly more working in other sectors dependent on the industry, including landowner businesses.

“The resources industry has underpinned the PNG economy for decades, providing considerable social and economic benefits that have owed to the government and the people of PNG,” says Gerea Aopi, President of the PNG Chamber of Mines and Petroleum.

“It continues to be a key contributor to PNG’s development goals, investing millions of Kina in community development in sectors such as health and education, infrastructure including roads and airstrips, employment and training, and agriculture and livelihood programs.”

The Chamber highlighted how the industry establishes and supports landowner companies and other PNG- based businesses that provide services to the project sites such as transportation, labour hire, catering, security, earthmoving, freight and logistics, janitorial services, agriculture and livestock and livelihood programs to promote food security and agribusiness.

Mining Act

Aopi says stable government policies and a favourable investment climate are critical for future growth in the PNG resource sector, and that the proposed changes to the Mining Act would undermine PNG’s investment attractiveness.

“While we support the PNG Government’s prerogative to update the legislation to meet the challenges of the 21st century, some of the amendments would pose significant deterrents for investment in future mining projects and would be a serious impediment to the operation of current mines in PNG,” said Aopi.

“When investors assess the investment risk and return potential of a country, they look at the legislative and policy framework as well as the total cost of doing business, including the levels of existing infrastructure to support a project. This calculation includes mining legislation, as well as taxation, scal and other policies. Considering this whole package, PNG has a high total government ‘take’ when compared to other countries.

“Independent modelling has shown that whilst PNG royalties in isolation might not be as high as other jurisdictions, the total take when including all taxes – including royalties, corporate tax, state equity and dividend withholding tax – is at the higher end of most countries. This is combined with a very low score on the World Bank’s Ease of Doing Business scale,” he added.

The Chamber continues to encourage the Government to undertake an independent review of the amendments, as envisaged in the 100 Day Plan, to ensure full understanding of the economic implications of the revised Act on the economy of PNG.

Significant growth potential

The Chamber believes there is huge potential for further development opportunities in the mining and petroleum sectors in the next three to five years, delivering benefits to the people of PNG, but these will not proceed unless investors are confident of the legal, scal and regulatory environment in PNG.

“The Chamber is committed to supporting internationally competitive legislation that ensures modern regulation of the industry, whilst encouraging and maintaining investment,” said Aopi.

“We want to work with the government to achieve a legislative framework that will not only meet the needs of PNG, but will also continue to encourage active investment in the sector.”

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Chamber Urges Govt To Review Proposed Mining Act Amendments

Extractive industries are worried their rape of PNG might be about to come to an end.

They pay the government less than 2% of revenue, K400 million from exports of K25 billion in 2017; but they don’t want to have to pay a single toea more!

Post Courier | August 19, 2018

The PNG Chamber of Mines and Petroleum continues to encourage government to undertake an independent review of the proposed amendments to the Mining Act 1992.

The chamber maintained that this was to ensure full understanding of the economic implications of the revised Act on the economy of the country.

President of the PNG Chamber of Mines and Petroleum, Gerea Aopi said stable government policies and favorable investment climate are critical for future growth in the PNG resource sector, and that the proposed changes to the Mining Act would undermine PNG’s investment attractiveness.

“While we support the PNG government’s prerogative to update the legislation to meet the challenges of the 21st century, some of the amendments would pose significant deterrents for investment in future mining projects and would be a serious impediment to the operation of current mines in PNG,” Mr Aopi said.

“When investors assess the investment risk and return potential of a country, they look at the legislative and policy framework as well as the total cost of doing business, including the levels of existing infrastructure to support a project.

“This calculation includes mining legislation, as well as taxation, fiscal and other policies. Considering this whole package, PNG has a high total government ‘take’ when compared to other countries.

“Independent modelling has shown that whilst PNG royalties in isolation might not be as high as other jurisdictions, the total take when including all taxes – including royalties, corporate tax, state equity and dividend withholding tax – is at the higher end of most countries. This is combined with a very low score on the World Bank’s Ease of Doing Business scale.”

The Chamber believes there is huge potential for further development opportunities in the mining and petroleum sectors in the next three to five years, delivering benefits to the people of PNG, but these will not proceed unless investors are confident of the legal, fiscal and regulatory environment in PNG.

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Fly-In-Fly-Out Causing Economic Loss

Post Courier | July 15, 2018

The PNG Resource Owners Federation has countered assertions made by the Chamber of Mines and Petroleum that the fly-in-fly-out employee commuter-based system employed by mining and petroleum projects in PNG is economically “balanced”, compared to the alternative of living on site.

According to the Chamber of Mines and Petroleum, FIFO provides the best balance of shared benefits to communities throughout PNG, not confined to host rural communities.

However, the PNG Resource Owners Federation maintains that it denies host rural communities of much need social and economic benefits.

Citing a 1997 study conducted by National Research Institute (NRI) on the economic impact of the FIFO of expatriate staff of one mining project in PNG, Federation president Jonathan Paraia said using the national income accounting equation, it is estimated that on average, the annual loss of national income is between K5.2 million and K13 million.

And considering the multiplier effect, the annual loss must be approximately K11 million and K29 million.

Mr Paraia said continuation of the FIFO system for a decade will cost the economy, including the multiplier effect, between K110 million and K300 million.

Mr Paraia said the economic benefits that could have been derived from a live-on-site arrangement would be employment in the informal sector, disposable income from FIFO employees, GST and other rates, taxes and fees, banking and financial services and trading, commerce and general business activity at all levels.

“The report further found that it was economically viable to build a township to accommodate the FIFO workers from this particular mine instead of the FIFO system.

“In that time, using the report’s formula, the country must have now lost between K253 million and K690 million over the period of the life of this particular project.

“The number would clearly run into many billions if all projects that practice the FIFO in the country are taken into account,” Mr Paraia said.

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Foreign ‘wealth extractors’ not happy about revised Mining Act

Mining companies extract Papua New Guinea’s mineral wealth and ship it overseas while leaving communities to suffer the environmental and social costs

Papua New Guinea’s mining sector concerned about revised Mining Act

David James | Business Advantage | 3 July 2018

There are concerns in Papua New Guinea’s mining industry that proposed changes to the Mining Act may discourage investment in the sector. The Executive Director of the PNG Chamber of Mines and Petroleum, Professor Albert Mellam, has said the mining sector is ‘strongly opposed’ to the revised Act.

Since 1992, Papua New Guinea’s Mining Act has provided the main regulatory framework for the mining sector. While a revision of the Act has been mooted for several years, the industry is expressing concerns at current proposed revisions.

Speaking in Brisbane recently at a business event, the PNG Chamber of Mines’ Executive Director Albert Mellam pointed to several ‘issues’ with the proposed revision.

One is that the maximum term of a mining lease be reduced from 40 years to 25 years and the renewal period for a mining licence be reduced from a maximum of 20 years to 10 years.

He questioned proposals that the state be given the right to compulsorily acquire the mine upon expiry of the first term of the mining lease. He described this as ‘expropriation’.

Mellam further queried proposals to limit the state’s exposure to sunk costs (expenses that cannot be recovered).

‘There are also no grandfathering provisions (phasing in of the new laws),’ he said.

‘Existing mines would be required to comply within 12 months, and any changes to government policy take precedence over the mining development contract (MDC).’

Fly in, fly out

Mellam also targeted proposals to regulate fly-in-fly-out (FIFO) activities undertaken by mining companies.

‘The powers of authorising officers are excessive and in some cases open to abuse.

‘The definition of “offshore” will lead to confusion with existing projects.’

‘Penalties are excessive and punitive. For example, a person engaging in FIFO—which is not defined—could be locked up for 15 years.’

He added that failing to provide information to the authorities could lead to a jail term of two years.

‘The definition of “offshore” will lead to confusion with existing projects that are onshore/offshore,’ he added.

Mellam did find some positives with the proposed revisions, however, pointing to the extension of exploration leases from two years to five years.

Also beneficial would be improvements to documentation, with plans required for community engagement, employment and training and rehabilitation. Feasibility studies and waste management methods would also be required.

Mellam was also critical of a proposal in the MRA Act to increase the production levy from 0.25 per cent to 0.5 per cent of gross production.

He pointed to the removal of any ‘direct or indirect representation’ for the industry on the Mineral Resource Authority’s (MRA’s) board.

Choice

Craig Jones, Executive General Manager for the proposed Wafi-Golpu gold-copper mine in Morobe Province, also speaking in Brisbane, said the PNG authorities must embrace one of two choices in revising the legislation.

‘The first is to ensure the continuation of stable fiscal and regulatory policies which have underwritten past successes of the resources sector in Papua New Guinea.

‘There is a great deal of uncertainty and nervousness created by the proposed amendments.’

‘(The second is) to grasp at legislative and taxation changes that will shake investor confidence and repel further investment in PNG.

‘But there is a great deal of uncertainty and nervousness created by the proposed amendments to the new Mining Act—the changes recently made to the MRA and changes to the taxation regime introduced in the 2017 Budget.’

Gas

Mellam was more positive on proposed natural gas policy, arguing for an investment framework that ‘properly supports a third party access regime for gas pipelines and related infrastructure’.

He regarded in a favourable light the requirement to meet domestic market obligations by providing up to 15 per cent of production for local use.

The requirement to use locally sourced labour he likewise considered to be a positive.

But he remained concerned about the future of the Mining Act, which he described as ‘critical to future investments in mineral exploration and development.’

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Call to review the unjust, primitive and self-harming laws of Papua New Guinea

Resource Owners Federation of PNG | 22 May, 2018

The PNG Chamber of Mining and Petroleum made statements last week claiming that the PNG mining laws are uncompetitive, in view of the government’s recent amendment to the Mineral Resources Authority (MRA) Act of 2005 and the proposed amendment to the Mining Act 1992. Their statements are untrue and are designed to scare off the National Parliament from amending the laws so that the mining companies can continue to reap all the benefits of mining in the country, whilst keeping the landowners and citizens who own the resources poor, as they have been successfully doing for decades.  The Resource Owners Federation of Papua New Guinea believes that, although the Mining Act 1992, needs to be reviewed, it should not be reviewed for the benefit of the mining and petroleum companies, but for the benefit of the country and its citizens.

The United Nation’s High Commissioner of Human Rights, during his visit to Papua New Guinea, in early February 2018, observed among others that; “Papua New Guinea was a resource-rich country but much of its population lives in abject poverty, with acute malnutrition rates in some areas comparable to Yemen, and minimal access to quality healthcare and education”.

The UN High Commissioner’s observations are an accurate assessment of Papua New Guinea, being a country that was “so rich, but yet so poor”.  Such assessment, is yet another official condemnation of the country’s state of affairs, in relation to the social and economic conditions of the country and its people. A significant reason for such condemnation is that, our natural resources have been managed in a way that all the benefits of the mining and petroleum projects are transferred to foreign shareholders, with nothing or very little being left for the country and its citizens. Such an official negative assessment from the United Nations must therefore, result in significant corrective actions to be taken by the State and its representatives, by way of reviewing the country’s inappropriate laws and policies.

The High Commissioner further went on to observe that; “it has strong civil society activists but there is little room for them to influence Government Policy“. The Federation and citizens have been calling on the National leaders of the country and the government over many years to review the Mining Act of 1992, on the basis that the country and its landowner citizens were not receiving a fair share of the profits from the mining and petroleum projects. The Mining Act 1992, proclaims the State’s ownership of all minerals found in any land, including and especially customary land, which land are owned by the traditional landowners throughout the country. The Federation is of the view that the State’s compulsory acquisition of minerals held under any traditional or customary lands without paying just compensation, as required by section 53 of the Constitution of Papua New Guinea, is unlawful. It is also in breach of the Article 17, of the Universal Declaration of Human Rights, which states that; “everyone has the right to own property alone or in association with others and no one shall be arbitrarily deprived of his property.”

The Mining Act 1992, as it stands and for the above reasons, is a primitive, unjust and self-harming law, which must be reviewed in its entirety, so that ownership of minerals is retained by the customary landowners. Minerals can still be mined only after development agreements are reached between the landowners and mining companies. Such arrangements have and are already in force, in many states of the United States of America. Under such an arrangement, the State stands to collect taxes from both the landowners and the mining companies. All parties then benefit from a project, in contrast to Papua New Guinea in the past and today, where the landowners are the ultimate losers.

The recent amendment of the MRA Act 2005, was justified in that, the mining industry members were regulating themselves from 2005 to 2018, after having gained a significant number of seats on the Board of the Authority.  The MRA was therefore seen as an organization that was run by the mining industry for its own benefit and against the interest of the country and its citizens. The Chamber of Mining and Petroleum now calls the amendment uncompetitive, because of their exclusion from the Board that they controlled for many years to their benefit but to the detriment of the landowners, the country and its citizens. The Federation challenges the Chamber of Mining and Petroleum to identify any government in the western world that would allow the mining industry to take over the enforcement of its mining laws against itself. We would think that such a practice, if allowed, would be deemed to be corrupt and therefore unlawful.

The UN High Commissioner further went on to say that; “the government urgently needs to build a stronger nexus with its people, so it can better serve their needs in this vast and diverse land.”  He saidthat it was unacceptable that many businesses had been granted licenses to engage in the extractive industries without the free, prior and informed consent of the people living on the affected lands…

 The Federation believes that the amendments to the Mining Act 1992, the MRA Act 2005 and the Petroleum Act 1998 are three laws which must be amended so that those citizens who are owners of the land under which any mineral or petroleum are found, are recognized by law, as the owners of those resources. This then will be the beginning of a new era, where the State will be building a stronger nexus with its people going forward.

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MRA Act changes ‘create uncertainty’ as mineral prices rise

Cedric Patjole | Loop PNG | May 19, 2018

Changes to the Mineral Resources Act 1992 have created uncertainty in the mining industry, especially with rising mineral prices.

Former executive director and now advisor to the PNG Chamber of Mines and Petroleum, Greg Anderson, said this during the Resources Sector Media Workshop.

He said the uncertainty created will determine exploration activity as well as whether mineral projects are developed.

Anderson gave a detailed presentation on the impact of the MRA Act changes. Positives included:

  • The extension of Exploration License term from 2 years to 5 years, and maximum size o shore increased to 10,000km2
  • Documentation required for a Mining License application now prescribed. This includes:
  • Community engagement plan, LIS, social mapping study
  • Employment and training plan, goods and services procurement plan, business development assistance plan
  • Rehabilitation and mine closure plan
  • Feasibility study and mine waste management plan
  • Resettlement action plan
  • Timelines set for a decision on the State equity participation option linked to the application process for a Mining License (as per Kumul Minerals Authorisation Act)
  • A party to a Community Development Agreement (CDA) (MOA) that fails to sign cannot delay or ‘hold to ransom’ the approval process for the CDA

However he said the negatives significantly outweighed the positives. They included:

  • The State given the right to compulsory acquire (on ‘commercial terms’) any project upon the expiry of the 25th year of the first term of the ML or thereafter (expropriation)
  • Royalty increased to 3 percent (bringing it to 3.5 percent with the increased Production Levy in the revised MRA Act )
  • Limiting of the un-recouped sunk costs for State equity participation to: Only 50 percent of the accumulated exploration costs; and for he current tenement holder only, and for no more than 20 years prior to ML grant
  • Agreements to include a provision on the protection of minority shareholder rights including when and how dividends will be determined, declared and paid
  • There are no “grandfathering” provisions – existing operations are required to comply with all aspects of the new Act within 12 months (social disruption)
  • Very significant increase in reporting requirements; will increase costs and bureaucratic load on the MRA, MAC and explorer/developer. Are these additional plans and reports justified, how are they to be reviewed in a meaningful way, can they be combined or better managed?
  • Any changes to Government policy take precedence over the MDC (totally annuls the sanctity of the MDC). MDC subject to five year reviews
  • There is only one tenement for mining, the ML (SML abolished; one size ts all) & the MAC now approves all tenements (Minister formally grants tenement but has to abide by decision of MAC). Industry endorses MAC’s role in approval of ELs & smaller mining projects but believes direct NEC approval & grant of ML needed for larger projects
  • International FIFO banned under an ML (also financial impact)
  • Unworkable obligation to commence development and maintain production leading to cancellation of ML “Reservation of Land from Mining” provision that does not protect the right of:  existing EL applicants for grant or renewal (they are terminated); existing ML holder to renew when a reservation is in place (cannot lodge an application which could result in the forced closure of a mine)
  • Unsatisfactory conditions for ELs: maximum size of onshore EL reduced 50% to 1,250km2; requirement for year 3 external audit, at renewal (MAC), or anytime by MD fee of K5,000 to surrender an EL; no consolidation of ELs
  • Unsatisfactory Compensation Agreement that must take into account “possible changes in the landholder structure”
  • Powers and duties of authorising o cers excessive and in some cases open to abuse.
  • Penalties are excessive and punitive, eg. A person, engaging in FIFO (not defined) can be locked up for 15 years;
    not a tenement holder, can be locked up for 2 years for not providing information the MD deems “useful for the enforcement of this Act”
  • The definition of “offshore” will lead to confusion with existing projects that are onshore/onshore and the application of the “CAB” needs to be clarified
  • Impractical “Transparency Initiative Publications” – IRC, PG, developer, LOA must submit quarterly benefits report or CEO/chairman ned K25,000

“The Mining Sector is strongly opposed to the revised mining act of which I have just outlined. It is internationally uncompetitive, extremely so, especially with all the tax changes that have gone on as well. It will be a strong deterrent to any future mining projects and a serious impediment to the operations of the current mines,” Anderson said.

Anderson said currently mineral prices were on the rise as witnesses five years ago before a slump. And the uncertainty created by the legislative changes affected exploration and mine development.

“This present all of us with a serious dilemma. We’ve got a rise in commodity prices, the cycle was recovering and coming back in our favour like it did in 2003 and we captured it beautifully.

“Now we’ve got all these uncertainties facing us; how are we going to capture this rise in commodity prices, build new projects and expand our exploration sector?”

He said the PNG Chamber of Mines had done two independent reviews and had encouraged the Government to carry out its own review to authenticate the veracity of those reports and recommendations.

Anderson said the Government must renew discussions with a multi-disciplinary team drawn from all relevant key government organisations, with all meetings chaired by an eminent, independent chairman.

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