Reports highlight risks from Panguna mine
Australia wants 'closest possible relationship'

China gold has been tarnished under Marape

When prime minister O’Neill visited China frequently. “Peter O’Neill could not resist red carpets, and the Chinese rolled them out for him,” Paul Barker, PNG Institute of National Affairs

Tallest building in PNG  the Noble Centre
The 23-storey Noble Center, the tallest building in PNG built at a cost of $95 million (K230 million) by the China Railway Construction Engineering Group, was denied an occupancy certificate by the city building authority last September. It remains unoccupied


| The Monthly | Extract

MELBOURNE - Heading a new term of government, prime minister James Marape said he would issue a list of business categories reserved for Papua New Guineans below a certain investment level.

“I am not going to be prime minister to see the erosion of business opportunities for PNG nationals, like restaurants, guesthouses, lodges, being filled by entrepreneurs or businessmen from outside,” he said.

Abd added: “Ask me five years from now. I want to tidy this space.”

Large-scale Chinese investors have also had a tougher time under Marape, who ousted Peter O’Neill in May 2019 and declared he would “take back PNG”.

In 2020, the Marape government refused to extend the expired lease of the giant Porgera goldmine, jointly owned by Zijin Mining, a Chinese company whose biggest shareholder is a local government in Fujian Province, and Canada’s Barrick Gold.

A two-year shutdown resulted in an agreement to lift the stake of Enga Province, where the mine is located, from 5% to 15%, though the mine is yet to reopen.

The Porgera stand-off led to speculation that the government might also terminate the lease of the Ramu nickel and cobalt mine near Madang, run by the state-owned Metallurgical Corporation of China.

It would not be hard to find cause. Right from the start of investment in 2006, the Ramu project has been controversial, for employing Chinese on semi-skilled jobs that could be filled by locals, and for its dumping of mine waste through a pipeline to the Bismarck Sea.

A fatal industrial accident in 2016 is understood to have revealed that safety mechanisms, in place for acid and high-pressure steam use, had been deactivated to speed up production.

In 2019, a spill of toxic slurry turned nearby waters bright red, taking locally caught fish off the market in Madang and causing rashes on swimmers for the next year.

In March of this year, a task force of 30 immigration, labour and police officials raided the Ramu mine to check the status of workers.

According to a person on the raid, they found 260 staff doing jobs not in compliance with their work permits and visas. Deportation orders were made against 12, and many others were issued fines.

But interventions were made by Madang Province governor Peter Yama and former chief justice Sir Arnold Arnet, who argued that the raid was detrimental to foreign investment.

Chinese ambassador Zeng Fanhua convinced newspaper editors to play down reports and not identify work permit offenders as Chinese, according to one senior journalist.

Then the country moved into election mode, and action was postponed.

Meanwhile, a flagship building constructed in Port Moresby’s central business district by the state-owned China Railway Construction Engineering Group is also fast becoming a symbol of Chinese shoddiness.

The 23-storey Noble Center, built at a cost of $95 million (K230 million), was denied an occupancy certificate by the city building authority last September because of 75 listed electrical, fire safety and structural faults. It remains unoccupied.

Ahead of the 2015 Pacific Games, held in Port Moresby, Chinese construction companies came to PNG for quick builds of sport facilities using their own workers, and stayed on, undercutting existing competitors.

Business and aid agreements abounded, helped by two Chinese migrant businesswomen, Ni Yumei and Ru ‘Dora’ Lu, who had developed rapport with O’Neill and his ministers, and became investment promoters in Port Moresby.

Lady Ni Cragnolini (as she is known since her husband, Italian-Australian builder Luciano Cragnolini, was knighted) also helped found the Butaka Academy, a secondary school in Port Moresby based on a Chinese model and aimed at cultivating a new elite.

When prime minister O’Neill visited China frequently.

“Peter O’Neill could not resist red carpets, and the Chinese rolled them out for him,” says Paul Barker of the Institute of National Affairs.

In June 2018, O’Neill signed up to Xi Jinping’s Belt and Road Initiative.

Over the following year, the number of Chinese state-owned enterprises (SOEs) operating in PNG jumped from 21 to at least 39, according to Peter Connolly at the Australian National University, and around 79 if Chinese provincial enterprises are counted.

Connolly says this is effectively a ‘fourth wave’ from China.

The new influx speaks Mandarin, employs a Chinese workforce as much as possible, is segregated from PNG society and, as one state-owned enterprise executive admitted to him, pursues Chinese state interests over commercial interests when required, even if it means a loss-making venture.


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