Tag Archives: Mining Act

Chamber concerned with passing of MRA bill

ENN | 27 February 2018

The Chamber President, Gerea Aopi, said today the MRA has been a success story for Papua New Guinea and the Government.

“The Chamber and the mining industry believe that the performance of MRA over the last decade is a credit to Government, and the excellent operating standards within the mining sector are an indicator of the good work of the regulator. It would be a tragedy for all mining industry stakeholders if this progress is lost,” Aopi said in a statement. 

“MRA has managed the regulatory environment for mining, as an arm of government, in a firm, fair and responsible manner. It has earned the respect and support of industry and other stakeholders, including landowners, and contributed to rising professional standards throughout the mining sector.”

Aopi said mineral exploration and production companies have three major concerns about the legislative changes:

  1. Removal of direct industry representation on the MRA Board
  2. The doubling of the production levy rate from 0.25 percent to 0.5 percent and
  3. The allocation and remittance of 35 percent of the annual production levies directly to the Department of Mineral Policy & Geohazards Management.

Aopi said the initial impetus for the establishment of MRA was provided by the European Union, which decided after the severe 1997 drought that the strengthening of the regulatory regime for mining would contribute significantly to diversification of the PNG economy and help mitigate unexpected emergencies such as drought.

An initial 50 million Euro grant (about K200 million) under a mining sector support program in 2002 led to the implementation of a range of projects and detailed discussions and planning between all stakeholders. This laid the groundwork for the establishment of MRA, which began operations in 2006.

The MRA was also created so that it can be adequately funded, and effectively regulate an industry that was very critical to the PNG economy. 

“Successive PNG Governments have benefitted from the independent role played by MRA in regulating the minerals sector, including the operational and safety aspects of PNG’s mines which have enable PNG mining operations to be benchmarked against global standards,” stated Aopi.

“By not allowing industry representation on the MRA Board, the Government has effectively negated the intent of the original legislation of ensuring effective and efficient administration and regulation of the mining sector through a meaningful involvement of industry and private sector at the Board level.”

Aopi said the doubling of the production levy was a de facto increase in tax and an additional burden on existing and future mining projects, even though the current levy has proved to be adequate for the funding of MRA operations.

“The new Act will see 35 percent of the increased levy diverted directly for the use of the Department of Mineral Policy and Geohazards Management. These funds can also be used for State obligations under Project Agreements entered into by the State and for ‘development initiatives’ within project areas approved by the MRA Board.

“The industry is gravely concerned the diversion of funding to outside activities may lead to a deterioration of MRA’s capacity.

“This is wrong and a major shift in Government policy, under which an industry tax levy can be used to directly fund another Department outside the budgetary process and to underwrite social obligations of the State managed by MRA as well as the Department of Mineral Policy and Geohazards Management.”

Aopi said for many years, successive Governments have reaffirmed their confidence in the MRA “model”.

“Why are we making these changes now to weaken a very important Government body that has performed exceptionally well? The benefit of having an effective regulator over many years can clearly be seen in the professional way issues are managed in the mining sector.

“Indeed, it is a working model that is being discussed by Government and industry to be applied to the oil and gas sector to help manage the issues impacting their operations,” he said.

The Chamber is also very concerned about the Government’s delay in expediting an independent process to review amendments to the Mining Act as agreed to between Government and the industry.

This was an important undertaking it made in 2017 to ensure changes to the legislation were fair and represented the interest of all stakeholders, including the Government.

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Mining Policies Need To Be Reviewed: Minister

Minister For Mining Johnson Tuke Says The Policies Governing The Mining Sector In Papua New Guinea Need To Be Revisited.

Matthew Vari | Post Courier | February 22, 2018

Minister for Mining Johnson Tuke says the policies governing the mining sector in Papua New Guinea need to be revisited.

He said much of the legislations governing the sector are still from the colonial era.

Mr Tuke said with the strong support from Prime Minister O’Neill and government caucus he is determined to take stock of benefits to landowners that make changes for the country to have a greater share in its own wealth.

“I think all our mining policies are more or less colonial. Are we still in the colonial times? We are moving forward,” Mr Tuke said.

“Leaders like Sir Julius Chan have all learnt their mistakes, and are telling me to move forward. The decisions conducted then were suitable for that time. This time has different underpinning. We have take heed of it and move ahead.”

Mr Tuke said he plans for all new mines to provide community obligation concessions.

“We have been for far too long reaped. This is high time; there will never be another time. It needs courage and determination. This government is determined.”

Mr Tuke commended Prime Minister Peter O’Neill for his leadership in ensuring changes do take place for the country’s mining sector.

“There has never been a time any consecutive government has thought so much of its people. I have started off with MRA and I will pursue with mining policy and acts.”

“I am adamant and I will fight vigorously until I pass the mining policy (review). I think 40 years is enough and we are overqualified to develop new policies.”

“I have got to do one or two things, I have to make abnormal decisions that will stimulate many others but affect a few.”

He said with the mining industry a huge contributor to the national purse much of its activities have been done behind the curtain. Something Tuke says he wants to change.

“I want everybody to know the system, the guidelines, the policy and the process, because once it (minerals) is gone, it is gone. You can’t renew that so our people have to know what they (developers) are doing.”

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Bougainville clans regain power over mining rights

Bougainville Finance Minister Robin Wilson

The National aka The Loggers Times | January 12, 2018

Bougainville landowners own all the resources on their land and the Bougainville government only facilitates resource development, says Bougainville Finance Minister Robin Wilson, pictured.

“Unlike the rest of Papua New Guinea, landowners in Bougainville have the power to allow or disallow exploration and extraction of minerals on their land,” he said.

Wilson was speaking when handing the province’s 2018 Budget of K254 million to national Treasurer Charles Able in Port Moresby yesterday.

Wilson said Bougainville has lifted the ban on mining in Panguna, Mt Tore and Isinai and mining activities in those areas are now being driven by the landowners.

“We introduced a law that is unique to the rest of the country where in terms of mining we have made the landowners the owners of resources,” he said.

“If there are resources in an area the landowner will give consent on, whether or not exploration will take place and if exploration has found minerals, the landowner will again give consent to whether it will be extracted or not.”

In regard to the PNG Mining Act, Able said the Act states that any resources below six feet (about 2m) under the earth belongs to the government, but the ABG has done away with that provision – only for Bougainville.

Abel said the PNG government’s ownership of mining resources was to ensure that profits were equally distributed throughout the country.

Meanwhile, to continue to strengthen relations between Bougainville and the Papua New Guinea government, Wilson is providing quarterly reports to the government on how money it provides is spent on Bougainville.

“The accountability of the grants will not be an issue anymore. I have provided those reports throughout last year and am committed to do it in this term,” he said.

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Mining Laws In Need Of Review

Jeffrey Elapa | Post Courier | November 27, 2017

The Resource Owners Federation of PNG Inc is against development of new mines in the country without amendments to the existing laws governing the industry.

President Jonathan Paraia said while the Federation acknowledges the government’s desire to open new mines as expressed by the Mining Minister Johnson Tuke a review of the mining laws must be undertaken first.

“The customary landowners of Papua New Guinea by all means will oppose the development of any new mining projects without amending the Mining Act 1992 and the Mineral Resource Authority Act of 2005.

“The reasons are that the Mining Act 1992 must be amended to be compliant with the Constitution and the customary laws of Papua New Guinea, which both vest the ownership of all lands and minerals contained therein by those who own the lands.

“The amended Mining Act must therefore ensure that the landowners receive a fair share of the profits from any mining project.

“In the past, the mining companies have deceived the landowners and the national government into believing that their entitlements from the mining projects, such as contracts, compensation payments, royalties, taxes, levies and so on, were benefits, when in fact, an entitlement as in the English language is not a benefit. The dictionary of English, states that a benefit is a profit. Entitlements are therefore not benefits as we have been led to believe for so long by the mining companies,” he said.

Mr Paraia said the Federation also continues to support many calls for the removal of the representatives of the PNG Chamber of Mining & Petroleum and the PNG Business Council from the board of the Minerals Resources Authority (MRA), because of their inherent conflict of interest.

“MRA is the regulator of PNG’s mining laws and regulations and the Chamber of Mining & Petroleum and the PNG Business Council are representative bodies of the mining industry, the subject of the mining laws administered by the MRA. It is therefore inappropriate for those that are being regulated to be on the board of the regulator,” he said.

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Proposed policy to declare mining revenue

Cedric Patjole | PNG Loop | October 9, 2017

The Department of Mineral Policy and Geohazards Management (DMPGH) says it is working to introduce a policy for stakeholders in the mining industry to declare any revenue received or made from mining projects.

Secretary Harry Kore told Loop PNG that the policy idea came about during consultations for the Revised Mining Act.

He said while there are reports of mining revenue generated, a lot of locals impacted by mining activities claim to not see any tangible results.

Kore said the policy will ensure stakeholders such as provincial governments, authorities such as the Mineral Resources Authority (MRA), Mineral Resources Development Cooperation (MRDC), as well as landowner association chairmen and landowner company CEOs declare revenue received for the bene t of all.

“You fail to do that and you will be held accountable and you will be penalised under the law. So it becomes a practise. Every quarter they just declare their interest. We know that so much money goes to our landowners but whether it trickles down to the peoples is another thing,” said Kore.

The policy idea is similar to a draft legislation currently being drawn up by the PNG Extractive Industry Transparency Initiative to make mandatory all revenue from the mineral, petroleum and gas sectors to be fully disclosed as per good governance standards.

Kore said they are yet to have formal discussions regarding the policy idea however, there is cooperation and the policy complements that of the work the EITI is undertaking.

Secretary Kore added that one of the agendas of the policy is to ensure there is sustainability in how revenue is invested back in the country.

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Tuke Optimistic About Mining Act Review

Post Courier | September 21, 2017

Mining Minister Johnson Tuke says he is optimistic about the outcome of the Mining Act review.

Mr Tuke told the Papua New Guinea Chamber of Mines and Petroleum this during his ministerial meeting yesterday.

He told the Chamber officials that despite his proposal to review the Mining Act which has created a lot of anxiety within the industry, he is optimistic of an outcome that would be accepted by affected parties.

He said as per the review of the Mining Act, his ministry and the National Government were working in line with government priorities to address it.

He said Prime Minister Peter O’Neill will meet with the Secretary for Department of Mining Harry Kore for a briefing on the review of the Mining Act this week and that the Mineral Resources Authority (MRA) and the Department of Mining will also conduct a power-point presentation next week for all industry stakeholders.

His meeting with the chamber was to enhance the ministry’s relationship with the industry at which the minister said he is more than happy to hear what the chamber has to say regarding the mining industry in Papua New Guinea.

“All economic ministries have been given a 100-day ultimatum to perform by the National Government and therefore I would like to work closely with you, the Department of Mining, Mineral Resources Authority and all extractive industry companies in order to realise the government’s agenda.

“My plan is to visit all mining projects in Papua New Guinea as minister responsible and I would like to meet with company officials and discuss matters of importance,” said the Minister.

He also announced that during his term in the ministry he will take on board the Wafi-Golpu and Frieda River mining projects and ensure that these important mines are operational.

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Revised mining act will be passed: Minister

Cedric Patjole | PNG Loop | August 23, 2017

Mining Minister, Johnson Tuke, has announced that he will make it his business to have the revised Mining Act passed in Parliament this year.

Tuke said the revised Mining Act, which contains six new laws, will immediately be brought before the National Executive Council for endorsement.

The Minister announced this during a Ministry handover-takeover ceremony in Port Moresby.

He takes on the role of Mining Minister from former Namatanai MP, Byron Chan.

In his maiden speech as Mining Minister, Tuke said he will ensure the new law is passed by the end of the year. This also includes the Mineral Resources Authority Act (2005) review.

“The proposed changes to the Mining Act are focused on improving the regulatory framework of the mining sector through the application of international best practice principles.

“So inline with the undertaking that was given by the Prime Minister at the PNG Mining and Petroleum Conference in Sydney last year, I will ensure the new law is passed by parliament before the end of this year,” he said.

“In addition, I’m also quite pleased to know that the six new policies that were developed for the mining sector in PNG, these new policies will be brought before cabinet immediately for endorsement so that they can be applied in PNG to address predominant issues in the mining sector.”

Minister Tuke gave praise to Chan for his leadership as the Mining Minister in the 9th Parliament and that he will continue the progress he has made.

That includes the review of the Mining Act (1992) and the upgrading of the Department of Mineral Policy and Geohazards Management (DMPGM) capacity.

Tuke has given the assurance that while the Government is committed to bringing change, it will also protect the interest of investors.

“Let me assure the people of PNG that this government is a government that will bring about change to bene t the people and serve the interest of Government.

“It will also protect the interest of the investor and ensure there is transparency, accountability, in the mining sector under my leadership,” Tuke said.

Chan said he was happy that a man of Tuke’s stature has taken on the role.

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