Mining, oil account for 80% of export income

Business, Normal

The National, Wednesday 30th November 2011

THE mining and petroleum industry generates 80% of total export income in PNG and provides over a third of government tax revenue.
This was revealed at the opening day of the mining and petroleum seminar in Port Moresby yesterday by president of the PNG Chamber of Mines and Petroleum Dr Ila Temu.
He set the pace for the four-day conference, which will have all the major players give their project updates in the resources sector.
The chamber is hosting the conference.
Prime Minister Peter O’Neill opened the conference yesterday with a firm message that the government will not make any changes to legislation and promised not to take a confrontationist approach with resources sector.
This had allayed fears of any purported move to shift mineral ownership to landowners.
Temu said since 2005 and 2010, both the mining and petroleum companies had paid more than K9.674 billion in corporate taxes and mining levies.
He said additional money was in terms of dividends, royalties, salaries and wages tax, production levy for Mineral Resources Authority and the tax credit scheme.
In 2005, the industry paid K1.149 billion.
Payment in 2006 was K2.002 billion, while 2007 received the highest amount of K2.39 billion.
In 2008 K1.973 billion was paid while in 2009, K693 million was received.
Last year, the amount was K1.471 billion.
The 2009 figure was down due to the global financial crisis and the 2010 figure was only an estimate as the real figure was likely to be higher,  Temu said.
The state, as an equity participant in the projects, was paid a total of K1.225 billion in dividends from 2005 to 2010.
This excluded payments to Petromin and the National Petroleum Co of PNG (now abolished).
With regards to mining and petroleum royalties (from 2005 to 2010) paid to landowners and host provincial governments, mining companies paid a total of K817 million while petroleum companies paid K342.2 million for a total of K1.159 billion.
In terms of employment and spin-off business,   Temu said employment in the sector increased from 12,000 in 2004 to 30,000 last year, and was still increasing.
In the exploration area, a large numbers of village people had been employed all over PNG and about 60,000 to 80,000 people were employed in grassroots alluvial mining.
Local contractors and PNG/overseas joint ventures by Ok Tedi Mining, Porgera and Lihir alone were paid a whooping K2 billion alone last year.
The mining and petroleum sector had associated business linkages  with a wide range of support and services industries like aviation, drilling, trucking, earthmoving, accounting legal, shipping wholesaling and retailing, and many more.