Chamber alarmed by decision

Business

THE Papua New Guinea PNG Chamber of Mines and Petroleum says it is alarmed at the Government’s decision to fast-track adoption of production-sharing contracts for mining and petroleum.
The chamber said this would replace the royalty/tax concessionary system that had operated successfully since independence.
“The chamber remains cognisant of the government’s prerogative to review and reform the country’s resource laws and has never been opposed to it,” it said in a statement.
“The chamber also works to ensure there is sufficient protection to both existing investment, and there is accountability and governance to promote a fair investment climate to see continued, strong future investment in the country’s resources.”
The chamber said the significant changes proposed would directly affect a wide range of people in PNG, including landowners, provincial and local level governments but there had been no consultation on it. According to the chamber, under the proposed changes, the State intends to transfer ownership of minerals and hydrocarbons to Kumul Mining and Kumul Petroleum, both of which would operate independently of government in pursuing exploration and development activities.
“Petroleum and Energy Minister, Kerenga Kua, when speaking at a recent chamber webinar, spoke about production-sharing, and acknowledged that there was little evidence of PSCs (production-sharing contracts) working in mining sectors around the world.”
The chamber disputed the Government’s claim that under the proposed PSCs there would be no changes to royalties, equity or other benefits that usually accrued to affected landowners and provincial governments.
“Under the proposed changes, these stakeholders will still be entitled to an unspecified share of royalties, but will have no specific entitlement to equity or other benefits, which will be up to Kumul Minerals and Kumul Petroleum to determine.”