What we don’t see under our feet
The smoke from the house

Gold stolen on a massive scale

Alluvial gold miners  Dantanai  Kieta District.
Alluvial gold miners,  Dantanai,  Kieta District. A Human Rights Watch investigation found illegal artisanal gold miners around Porgera routinely use mercury,  a poison which has had significant health impacts on both miners and their families

SAM JAY KAUPA

The unlawful extraction and export of gold is a scandal in both Papua New Guinea and Australia. Among the major beneficiaries, it seems from a recent investigation by the Australian Financial Review, even the respectable institution, the Perth Mint. Sam Jay Kaupa is an experienced mining engineer and manager with extensive domestic and international experience - KJ

PORT MORESBY - There is a question people need to ask. Why can’t the central bank of Papua New Guinea buy gold to curb smuggling and build reserves to stabilise the plummeting kina?

The mining sector accounts for about 9% of GDP and the overall resources sector contributes about 26% of GDP. This will continue to rise with the current demand for cobalt, a by-product of the precipitate from Ramu Nickel.

Copper and nickel are on the rebound and so is gold, now hovering above $US1,700/oz. According to analysts, the gold price will continue to go up.

Gold is stolen on a massive scale from PNG mines and gold production is under-reported, which is a massive scam.

For example, it has been estimated that, over the last 25 years, 20 million ounces salted away from the giant Porgera gold mine has been shipped by helicopter to Mt Hagen and private jet to Perth.

Who from Internal Revenue, Customs, Treasury or the mining regulator runs checks on this?

No one – I mean no one.

The Mineral Resources Authority is provided with a piece of paper, a Form 25, on which export minerals are recorded by the mine manager (who for all the big mines is an expatriate).

The information provided is minimal and it's negligent to accept what's there as gospel as it is an unverified sales record, especially for gold shipments.

The Treasury department relies on this record of sales to project future revenues and plug them into the national budget. The same information is shared with the central bank and other agencies.

Surely the government can get some of those lazy public servants at points of exit - like the helipad at Porgera - to physically weigh, record and sign off gold shipments.

I guess we caught the late bus. Tough luck. Twenty million ounces out the back door. A lazy $US34 billion at today’s prices.

Other mines such as Lihir and Ramu are doing the same thing. The PNG government does not have people on the ground like I used to see everywhere in Africa where I once worked.

They are everywhere because it's the mine sites where the money comes from. It’s not rocket science, you don’t collect government revenue by sitting in an air conditioned office and praying for God’s intervention. These public servants should get their fat bums out in the field and get their smooth fingers dirty.

So the bottom line is that gold is effectively stolen everywhere. It’s rampant.

Why on earth does the Bank of PNG give licences for companies to export gold?

The bank should be buying the gold instead of relying on dollars alone. It should reserve both dollars and gold to stabilise the kina, starting with the artisanal gold market.

The East African nation of Tanzania had a prolonged spat with fully-owned Barrick subsidiary, Acacia, over a $US190 billion tax bill for its mining operations. Echoes of Porgera.

Eventually, the Tanzanian government found out and calculated the back tax owed to them. This is doable in PNG if the government is serious in recouping lost revenue.

In PNG when such laws are proposed to reform the mining sector, the industry, backed by the PNG Chamber of Mines, always complains they will be onerous and costly and bitterly contests them.

You may (or may not) be surprised that such protests are strongly supported by certain government agencies.

One day this will change and the people of PNG will take back their resources and develop them using decent companies so the benefits go to the people whose faint cries are always ignored by the greedy.

Don’t mess with God’s people. One day they will rise and the stealing will cease.

Thank you and God bless PNG.

Comments

Feed You can follow this conversation by subscribing to the comment feed for this post.

Jackie Koglkia

Wantok KJ, good to hear you getting out of hausik.... wishing you speedy recovery....I have omitted a key word in my previous commentary and have included it this time.... can you please update the commentary so it reads right?

Yae SjK, with due respect, I am not sure what happened to all the mine planning/budgeting processes as mining engineers we have been thru..... budgets are prepared and communicated to corporate offices, mining/milling plans are generated to attempt to deliver on the budget... any variances HAD to be explained - Any Gold shipment HAD to be done via government approval... the cash generated HAD to be communicated back to the mining/milling teams/the operating team on site who are measure against the budget.

The only correct information is the government officials not physically counting shipment - as eluded, done elsewhere. - And is a simple fix - THEY ARE MORE THAN WELCOME to site close to the VAULT if they choose to.

As an mining engineer / Registered MINING MANAGER (PNG MMM # 02/2017), I will totally disagree that the information published is NOT correct and such incorrect information is miss leading and should not be published

Jackie Koglkia

Yae SjK, with due respect, I am not sure what happened to all the mine planning/budgeting processes as mining engineers we have been thru..... budgets are prepared and communicated to corporate offices, mining/milling plans are generated to attempt to deliver on the budget... any variances HAD to be explained - Any Gold shipment HAD to be done via government approval... the cash generated HAD to be communicated back to the mining/milling teams/the operating team on site who are measure against the budget.

The only correct information is the government officials not physically counting shipment - as eluded, done elsewhere. - And is a simple fix - THEY ARE MORE THAN WELCOME to site close to the VAULT if they choose to.

As an mining engineer / Registered MINING MANAGER (PNG MMM # 02/2017), I will totally disagree that the information published here is correct and such incorrect information is miss leading and should not be published

John Conroy

This important piece deserves to gain attention. Whether the central bank wants to buy all the gold is another question, because (unless some means could be found to avoid it) BankPNG would stand to make capital losses in a falling gold market and this would be a threat to the integrity of its balance sheet.

Michael Dom

What the flying fuck is this? Is this verifiable?

Forget God's people rising up, get the goddamned Internal Revenue, Customs and Treasury people working.

"It’s not rocket science, you don’t collect government revenue by sitting in an air conditioned office and praying for God’s intervention. These public servants should get their fat bums out in the field and get their smooth fingers dirty."

I can't believe the vermilion of this shait.

Lindsay F Bond

Quite at odds to the busy intensity of 'The Flight of the Bumblebee' (music orchestrally grand and evoking the flight of bees), comes this call-out that could be titled the 'Plight of the Humble Free'.

Thank you Sam Jay Kaupa.

And for folk wanting the physics of bumblebee flight: "Eddies of air above its wings helps the bee stay aloft."
See: https://www.livescience.com/33075-how-bees-fly.html

Verify your Comment

Previewing your Comment

This is only a preview. Your comment has not yet been posted.

Working...
Your comment could not be posted. Error type:
Your comment has been saved. Comments are moderated and will not appear until approved by the author. Post another comment

The letters and numbers you entered did not match the image. Please try again.

As a final step before posting your comment, enter the letters and numbers you see in the image below. This prevents automated programs from posting comments.

Having trouble reading this image? View an alternate.

Working...

Post a comment

Comments are moderated, and will not appear until the author has approved them.

Your Information

(Name and email address are required. Email address will not be displayed with the comment.)