Economy expected to rebound


THE economy is better placed to rebound this year on the back of the resources sector with gold, copper and liquefied natural gas (LNG) prices expected to be strong, says K92 Mining Inc chief executive officer John Lewins.
Lewins told The National that it would be achievable provided the impact of the Covid-19 on operations were managed. He, however, views 2021 as a difficult year for many economies as the impacts of the Covid-19 continue.
Gold price rallied briefly in early January to US$1,960 per ounce (K7,072.10) before dropping back to the current US$1,840 an ounce (K6,639.12), according to Lewins.
The general consensus on gold price for 2021 from the main analysts and banks is for a price above US$2,000/oz (K7,216.43).
The drivers of the gold price strengthening in 2021 are the expected to be the monetary and fiscal stimulus in the US, low interest rates, the US dollar expected to remain weak, inflation threat as the impact of the Covid-19 eases and people start spending.
Lewins said if the Wafi-Golpu project and the Papua LNG project were approved, they would have a very significant positive impact, plus the restart of the Porgera mine.
“Other areas such as agriculture and fisheries should also perform well as hopefully demand increases as the major develop economies recover with the roll-out of the Covid-19 vaccine,” he said.
“However, international tourism is unlikely to recover until 2022 at the earliest.
“So this will impact hotels, airlines and the like.”
Lewins said the restart of Porgera and the start of Wafi-Golpu and the Papua LNG projects could however see a shortage of skilled workers which could have a negative impact on existing operations such as the K92.
“This is something we seek to address by increasing our commitment to training.”