Chinese fund armoured cars, troop carriers for PNG
I apologise, and I want the 'asples' to be progressive

Aid's not the answer; let's develop those resources

BRIAN WAWN | Project Monitor | My Resources

MICK LEAHY (1901-79) was an Australian explorer and prospector, who worked in the rugged mountainous country of Papua New Guinea in the 1930s.

He said to a colleague at the time: “Jim, good country, good climate, good kanakas (traditional people), too good to find gold in”.

But in time, the country Mick Leahy explored gave rise to two major mines operating today: Porgera and Ok Tedi.

Following growth in gold mining between the 1930s and 1950s, PNG had only one major operating mine at independence in 1975: the Panguna copper mine on Bougainville.

Operations at Panguna ended in tears in 1989; the development was closed in the face of fierce local opposition, accompanied by civil war on the island.


Notwithstanding this, mining in PNG – notably of gold – has grown strongly since independence. Gold production in 2011 totalled 4 million ounces.

Resources (mainly mining) now account for over 70% of exports and 25% of government revenue.

There are several major mining projects on the drawing board, such as Wafi-Golpu (copper and gold), Frieda River (copper and gold), Mount Kare (gold and silver), Woodlark Island (gold), Yandera (copper, gold and molybdenum) and Mambare (nickel).

These six projects alone will entail capital expenditure of at least $15 billion, partly on infrastructure such as roads, pipelines, power stations, ports and accommodation camps.

In addition, some $15 billion is being spent on ExxonMobil’s liquefied natural gas project, which will come into production next year.

The PNG government is publicly committed to the development of the resources industry and foreign investment in the industry.

At the same time, it faces pressures to become more active in mining policy.

For example, the government is currently in dispute with Nautilus Minerals of Canada, terminating last year an agreement with the company under which the government is to contribute 30% of the cost of developing this company’s Solwara 1 project (entailing the sub-sea mining of copper). And it is in dispute with BHP Billiton over ownership of the Ok Tedi mine.

In addition, it faces moves from some quarters to give local communities the right to own minerals, something that is strongly opposed by the industry.

(As stated by the PNG Chamber of Mines and Petroleum, “because there is no system of land title for customary land, an explorer would be left with the task of dealing with a resource owned by a community that was always open to challenge from within and without”.)

Dealing with local communities is a difficult issue in PNG, given its cultural diversity (the country is home to hundreds of tribes and languages) and by the communal nature of much land ownership. Local protests, sometimes violent, have been part-and-parcel of mining since independence in PNG.

Underneath these issues lie serious economic problems. Papua New Guinea receives more foreign aid per capita than almost any other country. At the same time, an estimated 40% of people live on under $1 per day.

In the forceful words of Professor Helen Hughes of the Australian National University, foreign aid has boosted, not the lives of villagers, but rather large-scale corruption and the privileges of “cadres of aid officials” and “non-government aid organisations with political agendas”.

In the more gentle words of an Australian government review in 2010, the model of “capacity building through advisers” is not working.

The development of a new economic model for PNG and the development of the resources industry will go hand-in-hand.


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Paul Oates

Des, at the risk of boring those who have heard me say it all before, I can only repeat what I've always maintained. PNG is not unique in battling corruption.

It is a constant threat to all public finances. You only have to look at the present political debacles going on in NSW or with Union funds. The essence of the PNG problem is only one of degree.

Either you have an equally applicable law and order policy or you do not. There is no grey area when public finances are concerned. You can't turn a blind eye to a crime just because it involves a wantok.

Until and unless an inviolate line is drawn in the sand, the same problem will continue to plague PNG. 'Poroman, inogat narapla rot'

People everywhere must stand up for what they believe in or be prepared to continue to suffer the consequences.

Desmond Kuluwah

What an interesting article. Let's get it straight here; most of the foreign aid is boomerang aid. It can change the lives of the community but it also brings advantage to the donors in one way or another. Aid is not the answer.

If developing our own reasources is the answer, then how can we best do it if there is large scale corruption everywhere?

So what is the answer?

Lei Atua

Papua New Guinea is so rich naturally. And with the booming of mining industries and other business there is a large amount of money coming into the country. But where is all the money going?

Our country has been depending mainly on aid from other countries since the beginning. When are we going to be fully independent with all the bulk of resources.

There's no point being proud of all the resources because they are not benefiting the entire population.

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