Chamber calls for caution

THE PNG Chamber of Mines and Petroleum is calling on the Government to seriously consider the implications a revised Mining Act would have on the country’s economy before tabling the Bill.
The chamber raised the concern after the secretary for the Mineral Policy and Geo-Hazard Management Department, Harry Kore, said the Act would be tabled in Parliament next month.
Kore launched the public consultation on the Review of the Mining (Safety) Act in Goroka, Eastern Highlands, yesterday.
The chamber said, in a statement, that conducting an independent review would help the Government fully understand the negative economic consequences the proposed changes to the Act would have on the country.
It said the amendments to the proposed Act would render the mining industry in PNG internationally uncompetitive.
The amendments were also a serious deterrent to investment in future mining projects, and may even threaten the ongoing operations of mines currently in operation.
“The changes to the Act will also cause investors to either cancel future projects or leave PNG altogether,” the chamber said.
“This means a loss of thousands of jobs across the resources sector and also the wider small business and service industry that supports the sector.”
The chamber warned that the country’s credit rating would drop and its political risk rating would increase.
Furthermore, the economy would suffer a drastic loss of taxation in GST (goods and services tax), duties, payroll tax and corporate tax.
This would translate to an inability of the State to fund basic services including schools, hospitals and maintain existing infrastructure.
The chamber said it respected the right of PNG, a sovereign state, to review and revise its laws, legislation and regulations.
However, as a responsible government, it needed to consider all elements of proposed revisions to the Mining Act including compulsory Government acquisition rights along with potential royalty and tax increases.
The chamber said this could only be fully realised through the implementation of a rigorous independent review. “The industry is ready to engage with the Government in constructive, open dialogue that will help to establish a way to better refine the proposed Act amendments while displaying fiscal discipline and strategic governance,” it said.
“Failing to maintain a Mining Act that strikes a balance between national and investor interests places a risk on the economic wellbeing of the country with serious flow on consequences to society.”