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MRA is an important initiative
THE Minerals Resources Authority (MRA),
a subject of significant controversy in recent times, is now
fully funded and operational.
Not many people are aware that the MRA had its roots in the
devastating 1997 drought, when some people are understood to
have died of hunger in the Highlands.
In response to that crisis, the European Union began studies to
assess ways in which the economy could be made more sustainable
and, in that way, better able to cope with national disasters
such as severe droughts.
The decision to set up MRA was an outcome of these studies.
The EU made the formation of MRA, and its cornerstone role in
managing development of the country’s mineral resources, the
focus for a 50 million euro grant, now equivalent to around K200
million.
The grant was made under the EU’s 8th European Development Fund
Sysmin Special Financing Facility.
Under this programme, vast new databases of geological and
geophysical information is being collated in an effort to ensure
the long-term sustainability and future growth of PNG’s mining
sector.
Together with legislative changes in 2003, these reforms are
already generating a big rise in exploration and development
activities that will provide the basis for new mineral
discoveries and future economic growth.
Management of minerals sector activities by the MRA will ensure
a more sustainable future for the industry and
increased levels of government and landowner revenues from
corporate taxes and royalties.
However, at the core of the decision to set up MRA is an
assurance of improved governance which, given the potential of
the sector, could be as significant of the privatisation of the
poorly performing PNG banking corporation and previous financial
sector reforms.
Australian and other foreign visitors to the former department
of mines, which has shed its regulatory role, were generally
taken aback at the poorly maintained facilities at PNG’s premier
export generating agency.
One Australian company representative said it was the worst
maintained department he had seen in visits to many countries
around the world.
This, of course, was not the fault of the department since it
was bereft of adequate funding by successive governments who
were forced to use mining generated revenues for a raft of other
purposes within the national budget.
Despite a much bigger budget for MRA – Mining Minister Dr Puka
Temu this week announced an K18 million budget for MRA this year
– this arm of government will be virtually self-funded.
A levy of 0.5% of assessable mine revenue will be utilised to
fund the MRA, which will be able to use these funds for
institution building purposes.
Besides overseeing the vast new geophysical surveys now being
flown, efforts are underway to revitalise its geological survey
and other technical functions.
Housed in the newly constructed ‘Mining Haus’ in Port Moresby,
one of the likely outcomes of the establishment of the MRA will
be its ability to provide improved technical inputs to
government on potential environmental and other regulatory
issues.
But it will be improved governance and greater transparency that
will ensure that MRA will operate as well as its sister
organisations in Australia and other countries.
One of these will require a regular flow of information to the
public, possibly on a quarterly basis in view of the normal
reporting regimes of most listed exploration and mining
companies.
This will provide updates on on-going mining activities and
their impacts as well as information on exploration spending and
other technical issues.
At the moment, the organisation will be busily trying to build
its management and technical capabilities.
The setting up of MRA has been delayed by internal debate and
other issues but, hopefully, the agency now will be able to play
its rightful role and to possibly provide a model for regulatory
bodies for other commodities, especially where performance has
been less than ideal for many
years.
 
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