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New mining act poses economic threat


PORT MORESBY – A month ago, on Wednesday 17 June, the Papua New Guinea parliament passed a mining amendment bill suppressing the participation of landowners in the development of PNG mineral resources projects and promoting the participation of the State.

The bill provides a legal basis for the government and foreign investors to take their cut of the pie but the position of landowners’ equity is not very clear.

Indeed it seems the amended bill continues to suppress the opportunity for the people to participate.

The landowners own the land and should be given the utmost opportunity to participate in acquiring mining and exploration licences in order to fully participate in the equity that derives from it.

But it seems this will not eventuate.

Now, the 7% equity contribution of the government is not the limit—it can contribute up to 50% or even 70%. However, for landowners 5% is the limit.

This is an unfair equity distribution for resource owners.

This disaster that the amendment would bring to the people of Papua New Guinea was foreseen by the PNG Chamber of Mines and Petroleum in 2019.

The chamber believes that conducting an independent review would help the government fully understand the negative economic consequences the proposed changes to the Act will have on PNG.

In short, if legislated, the proposed amendments will render the mining industry in PNG internationally uncompetitive.

This may force the withdrawal of investors and threaten the ongoing operation of many mines in PNG.

As a result, thousands of jobs will be lost, PNG’s credit rating will drop and PNG’s political risk rating will increase.


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Anonymous government officer [email provided]

Domestic economic growth is expected from the participation of the landowners to secure tenement for mining and which will allow landowners to take part in equity contribution is not very clear in the Act.

The new mining bill (amended) 2020 continues to suppress the opportunity for people to participate in equity contribution.

The landowners own the land and they have the utmost right to participate in the equity.

This has been suppressed by the government through the amended mining act which is about to be passed by parliament and is currently in the hands of the speaker.

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