Higher gold prices positive for PNG: Bank
By CLARISSA MOI
HIGHER gold prices and increased production are positive for Papua New Guinea in terms of balance of payment and profitability for State-owned enterprises and landowners, according to Westpac.
The bank was responding to questions from The National regarding the increased gold price and the impact it would have on the country.
“Commodity prices generally are reflecting the extraordinary amount of monetary and fiscal stimulus being made available by governments and central banks in response to the Covid-19-induced economic slow-down,” the bank said.
“Very low interest rates make non-yielding assets like commodities more attractive to investors.
“A weak US dollar (commodities are priced in US dollars) makes gold and copper more affordable to non-US investors as the buying power of their local currencies is enhanced.
“Markets fear that governments will try and inflate their way out of enormous debt burdens.
“Gold is a well-known hedge against inflation.
“In general terms, higher prices and increased production are positive for PNG in terms of the balance of payments and profitability (dividends) for state-owned enterprises and landowners.”
According to Westpac’s financial markets summary for July, PNG export commodities mostly had a strong month in terms of price.
It stated that gold and copper were both higher with the gold price being supported by ultra-low interest rates and a weak US dollar.
“Prices are setting records close to US$2,000 (K6,825.79) per ounce.”
K92 Mining Inc chief executive John Lewins this week also noted that the higher gold price would increase the profitability of local gold producers.
Meanwhile, the Westpac financial summary for July also noted that energy prices continued to recover with both liquefied natural gas (LNG) and oil prices higher.
5 comments
Alluvial miners must should also benefit from this price hike meaning local gold buyers should also transfer the gains onto them.
Gold prices are high right now and the government keeps Porgera mine closed in all it wisdom. During this time of crisis and economic melt-down, we need the gold money. Marape, stop acting like you are the savior here. You are doing more harm than good for both the short and long term!
Haven’t been hearing any news from our Mining Company “Kumul Minerals Holdings(KMH)” have they been involved in some business prospects around the country? Or using up their annual budget to pay wages/salaries/allowance of the organisation.
KMH must not only look at investing but start small, and go into small scale alluvial mining with our locals/Landowners.
KMH must go into 50/50 partnership arrangements with Alluvial lease holders of Wau and other parts of the country.
Part of this plan is for KMH to revive the MRO smelting facility or Set up one it won’t cost over K1m to build one.
Once KMH has a smelting facility all the locals who KMH is in partnership with will bring their Gold to KMH to smelt and buy.
The decision can be made by the Government that BPNG start to buy KMH gold and convert some of our foreign exchange into gold value.
Some of the KMH gold can be sold to our “good friends” China and India to increase our US Dollar foreign exchange.
Let’s take back PNG and make it the richest black country.
PNG a Christian country gives thanks to the God of Abraham, Isaac and Jacob for giving us knowledge, wisdom and the will power to implement.
KMH and KPH were created to enrich themselves. Employees are living luxury lifestyle as if they are really on the ground getting their hands dirty to deserve such lifestyle. As a matter of fact, they are no different to an owl. Owls keep their mouth/beak open for insects like mosquitoes to enter, they don’t hunt for insects like other birds do.
Leadership team of these entities are big time day dreamers and does not have any SMART and innovative ideas and creativity to take these companies to next level. All they do is to collude with corrupt politicians to steal and rob from the people of these great nation. What a shame.
Aiyo Mel, trupla tok. Mi lap go, go na eye wara pundaun bikos what you said really matched some owls I know personally.
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