By MARK HAIHUIE
THE strength of the Kina used to be equivalent to the US dollar when there was only one mining company in PNG but has dropped substantially since, a company board chairman says.
Kumul Consolidated Holdings Limited board chairman Paul Nerau was addressing a panel of company executives in the extractive sector during the Australia-PNG Business Forum and Trade Expo in Port Moresby on Tuesday.
He said the performance of the Bougainville Copper Limited was able to push the Kina value to be equal to the US dollar. But this is not the case today even though there are more large companies in the extractive sector.
“In the ‘70s, Bougainville Copper was the only large mining company in this country,” Nerau said.
“The Kina at that time was stronger than the Australian dollar and equal to US dollar. How come now with all the mines and oil and gas the Kina is where it is? This is something that disturbs me.”
Newcrest PNG country manager Peter Aitsi said economic policies today had changed and that the companies needed to work with the Government more to ensure that wealth was better distributed.
“Back in those years, we had a pegged kina. It’s essentially saying that it wasn’t a free-flying currency in that it was pegged until 1994. So it wasn’t a correct sort of market,” Aitsi said.
“Part of the frustration is on the conversion of wealth generated by the sector. This is really the discussion that we need to have with the government. If the industry is paying, who is the Government paying it to? Who are the landowners paying it to? What are they doing with the wealth in terms of building something meaningful for the community and the nation?”
By MARK HAIHUIE