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Whose side is the Chamber of Mines on?

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Kuimas project area map

STANLEY ARURU PUNDIYE
| CEO, Kuimas Minerals Company Ltd

PORT MORESBY - While the Chamber of Mines and Petroleum pleads with the Papua New Guinea government to postpone reforms to the mining act, issues affecting resource owners are being ignored.

The changes to the mining act are being addressed by parliament to fix possible issues that may affect foreign investors.

It has been a step forward for the PNG government to move to take full ownership of mineral exploration in order to fully precipitate in equity contributions when the deposit is economic viable for mining;

However, a clear policy and a workable plan must be in place to fully implement the idea, including indications of where the money will come from to fully fund exploration activities and how this will assist the participation of grassroots village resource owners, on whose behalf I write.

PNG does not much need investors to do all the exploration work nor does PNG much need skills, equipment and a workforce of overseas labourers to begin and complete mining activities.

However, we know that experts are required and we know that this expertise can be hired to fill specialist positions.

Where we do not have the required equipment, it can be brought from overseas to do the work.

The transfer of mining wealth to the village level is very important in PNG so our country can generate wealth from the bottom up, thus strengthening the economy.

Yet nothing much has been indicated in the new act to address these needs and issues.

The government needs to provide a funding scheme for local and overseas exploration companies to boost exploration activities and encourage new resource finds.

This will particularly help local companies take part in exploration.

The government should invest in companies so, on behalf of the people, it will participate fully in equity and benefit when the inferred resources from exploration finally transform into mining.

This issue needs to be clarified in government policy so we begin to take real control of our own resources.

The Chamber of Mines and Petroleum must not only talk about issues that affect overseas investors but also bring forth ideas that will benefit the PNG government and local companies.

We need a two-side view.

When we allow foreign investors to do all the work that Papua New Guineans can do, we lose around 60-70% of the profits from mines that operate in PNG.

The ideas that the Chamber needs to bring forward is how to make PNG and its companies benefit from these profits so they will not be lost in future years.

My argument is that such ideas can only be realised if the government can identify funds for exploration work from the initial stage to the final identification of resources.

The Chamber thinks that the new act is a threat, but I think it is a win if only the government can develop appropriate policy and a strategic plan and then execute it.

If the government really wants to go ahead with a new act and implement the idea, then PNG will take ownership of many works, including any ideas that the Chamber brings forward.

Stanley Pundiye
Stanley Pundiye

The Kuimas Minerals Company is 100% owned by local resource owners of Kuimas in the Maramuni area of Enga Province.

The company was formed in 2016 to develop over nine minerals including platinum, carnelian, palladium, gold, silver and copper in nugget and ore form.

We believe PNG companies must participate in the resources sector to the fullest extent possible and that the government and the Chamber of Mines and Petroleum should be doing their utmost to encourage this.

Comments

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Arthur Williams

When I was training to come to PNG as a kiap we were told our basic role was to assist PNG develop so as we would become redundant.

Stanley Pundiye has written a good essay on the reform of the mining resource industry. Surely after fifty years of mining projects in PNG there must be capable persons able to control a mine?

Twenty years ago I noted that Lihir Gold was employing plenty of nationals in its workforce from the menial tasks through to middle management levels. I guess the situation today is even better.

Likewise Ok Tedi which has 40% of its workers from the immediate areas around the pit of the 95% of all workers who are nationals.

The obvious and almost unsolvable problem for a PNG company to own and manage a mine is the massive startup costs of getting a mine developed.

So as Stanley says all the current mining projects provide the mining company with huge percentages of the profits while the landowners and their three levels of government get tiny percentages.

I believe that is why the current government is on the right track in its attempt to increase the returns to the state and people of PNG.

The PNG Mining Chamber’s mission statement says:
"To promote the mineral and petroleum exploration potential of Papua New Guinea and the development of a world-class sustainable resources industry that provides benefit streams to improve the welfare of all Papua New Guineans."

Ignoring its blatant use of the oxymoron, ‘sustainable extractive industry', it does suggest it is interested in the people of PNG.

Sadly too often though it appears as a mere lobby group for the mining companies while maximising profits for them.

Jos Pahau

A well-thought insight into the new act for a way forward in our mining industry.

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