PNG Business News - Issue 4, 2024

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ISSUE 4 2024

OK TEDI MARKS 40 YEARS OF RESILIENCE AND EXCELLENCE MCWALTER: PETROLEUM SECTOR REFORM: A FURTHER DISCUSSION & JUST WHAT ARE PSCS? AUSTRALIA-PNG NEW DEVELOPMENT PARTNERSHIP PLAN LAUNCHED PNG WELCOMES NEW MINING MINISTER GOI

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CONTENTS COMMENTARY Petroleum Sector Reform: A Further Discussion & Just What are PSCs? > 10 Addressing Impacts of Sudden Mine Closures, Community Resilience in PNG > 24

BUSINESS Australia-PNG New Development Partnership Plan Launched > 28 APNGBX: Strengthening Ties and Driving Growth > 30 ADB, PNG Agree on Action Plan to Accelerate Projects > 34

Marape Holds Bilateral Meeting with New Indonesian President > 44 New Zealand ‘Steady, Reliable’; Marape Commends Neighbor for Consistent Support to PNG > 46 Marape Thanks Japan for 50 Years of Development Assistance to PNG > 48 Agreement Reached to Develop Fully Integrated SEZ in Madang > 50

MINING Kainantu Gold Mine Hits Record Production in Q3 > 52

Aropa Airport Upgrade Scheduled for 2025 > 36

Mayur Secures 10-Year Exclusive Premium Quicklime Supply Strategic Alliance > 54

PM: Paga Hill SEZ, Casino to Spur Port Moresby’s Next Development Wave > 38

Tolu Minerals Bags A$26.7M Placement for Gold Mine Development > 56

Marape Hails Achievements of Commonwealth Gab in Samoa > 40

PNG Welcomes New Mining Minister Goi > 58

ON THE COVER

Ok Tedi Marks 40 Years of Resilience and Excellence > 64 PNG Mining Minister Outlines Priorities Before 2024 Ends > 60 Garry Tells Alluvial Gold Miners to Diversify, Reinvest, Manage Better > 62 OTML Donates K550,000 to UPNG’s Earth Sciences Division > 66 MRA, China Sign MOU for Geological Survey; Garry Stresses Need for Exploration > 68

OIL & GAS KPHL Hosts Successful Energy Conference > 70 Santos CEO Gallagher: PNG LNG Project ‘World-Class Asset’ > 72 PEC 2024: PM Marape Welcomes Investors > 74 Santos Sells 2.6% of PNG LNG to KPHL > 76

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CONTENTS ExxonMobil: PNG Well-Positioned for Future Regional LNG Demand > 78

Minister Maru: PNG Has ‘Serious Energy Crisis’ > 96

Information Workshop 2024 Addresses Corruption > 112

Digital Transformation is Just the Start > 132

TOURISM

COMPANY

Kumul Petroleum Signs FLNG Pre-FEED Contract > 82

Tourism Minister Calls for Better Visitor Numbers, Enhanced Safety Measures > 98

AsiaPac: Your Trusted Global Procurement Partner > 112

Head Hunters: Executive Search Leaders in Australia & PNG > 136

Marape Meets with State Negotiating Team, Twinza to Advance Pasca A Gas Project > 84 Santos Signs Mid-Term LNG Supply Contract > 86

PNG Tourism Focuses on Law, Infrastructure, and Safety > 100 Tourism Business Incubation Center Officially Opens in Port Moresby > 102

Remington CEO Navin Raju on the Future of Business Technology > 114 Steamships Breaks Ground on Portside Business Park > 118 Ark Modular Buildings: Speed, Cost, Quality AND Green Too > 120

Ensuring Fuel System Integrity: The Future of Leak Detection with Acoustic Technology > 88

American Expert: PNG Has Potential for Historical Tourism > 104

AGRICULTURE

FINANCE

Marape Announces $1.2-B Agro-Forestry Project in Western Province > 90

American Expert: PNG Has Potential for Historical Tourism > 104

PNG Ports to Develop Lae’s Industrial Park > 124

TISA’s Growth: From Credit Union to PNG’s First Homegrown Bank Under CEO Koisen > 106

Secure Your Success in PNG with PNG CR Services Limited > 126

ENERGY PNG Pushes Nature-Based Solutions for Climate Resilience at PEC 2024 > 92 PNG Solar Supply Lights Up South Pacific International Academy > 94

PNG Forest Products: Sustainability in Motion > 122

Why is Oral Health Essential for Staff Well-Being? > 138 Four Salvages in PNG for Pacific Towing > 140 Peopleconnexion Launches the 2024/25 Salary Guide for Papua New Guinea > 142 Sprint Networks: A Decade of Cyber Security Excellence in PNG and the Pacific > 144 Progress and Pride – Hastings Deering Celebrates 75 Years of Caterpillar in PNG > 148

Tropicair: We Fly for You > 128 BPNG’s Genia Unveils Sept.

Monetary Policy Statement > 108

Atlas Steel Expands Services for Mining Sector > 130

From Factory to Aisles: ‘Tenkyu-wara’ Now Available at Tango Supermarket > 154

BPNG Explains Legislative Changes to Central Banking Act > 110

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Petroleum Sector Reform: A Further Discussion & Just What are PSCs? EDITOR’S NOTE: Michael McWalter, former Director, Petroleum Division and Adviser to the Government of Papua New Guinea and erstwhile petroleum adviser to the Governments of Ghana, Liberia, Cambodia, Sao Tome, and South Sudan picks up his prior discussions of petroleum sector reform (Issue No. 3 2024) and describes in more detail exactly what a Production Sharing Contract, or what a PSC, is all about.

Michael McWalter is a certified petroleum geologist and technical specialist in upstream petroleum industry regulation, administration, and institutional development.

I

n my commentary of PNG Business News, Issue 2, 2023 entitled: Petroleum Sector Reform for Papua New Guinea, I wrote about the need to apply better governance to the sector to achieve optimal outcomes for the State. In particular, I spoke of the need for the petroleum revenues arising from petroleum resource development to be deployed wisely for the benefit of the people of PNG on capital formation activities like: education, health, social welfare, infrastructure, etc. – all of which should promote the National economy to grow, and thus improve livelihoods. This translation of the value of resources with appropriate management into sustainable development is often called the value chain, and each aspect of the chain needs most serious and competent management.

There is little point in mobilising one’s natural resources to make an income for the State, if that money is not put to good purpose, but rather wasted one way or another by folly or malady. Those resources may only be produced once, and not again; they are finite and have value now

at such time as that kind of resource is sought after in global markets. We must remember that there may come a day when oil and gas are no longer consumed with such avid demand as today. This might eventuate as more investments are poured into the development of renewables sources of energy and advancements are made with cleaner nuclear fission and sustainable thermonuclear fusion. Oil and gas might become a quixotic, antiquated and outmoded source of energy, and thus attract considerably less value.

So, if a government is going to foster investment in petroleum exploration and development, it needs to embrace such grave and important responsibility to ensure that the Nation’s petroleum business is conducted most professionally and with total accountability. Government must ensure that the resultant Publisher Elizabeth Galura Editor Jimbo Owen Gulle info@pngbusinessnews.com Journalist Roselyn Erehe roselyn@pngbusinessnews.com

revenues from subsequent production are appropriate, reasonable and respected as being derived from the overall patrimony of the people of the Nation. This requires investment by the State in professional excellence to manage, moderate, administrate and regulate the sector and its operations firmly and fairly. The oft cited National Petroleum Authority (NPA), which was first defined in the Government’s 1976 White Paper on Petroleum Policy and Legislation by two of our greatest leaders, Sir Michael Somare and Sir Julius Chan, has been repeatedly conceived, only to be still born. Into that vacuum, Kumul Petroleum Holdings Ltd, PNG’s de facto National Oil Company (NOC) has steadily and bravely taken the lead and embraced National development in the oil and gas sector, and all that it entails.

Meantime, the Department of

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Figure 1: The series of management steps needed to obtain value from extractive industry resources, after Eleodoro Mayorga-Alba, Extractive Industry Value Chain, Working Paper No. 125, World Bank.

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PNG Business News is published for the PNG Business community.

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Commentaries and contributed articles published in this magazine are the views of their authors and do not necessarily reflect the views of PNG Business News – our main role is to provide our readers in PNG and the region with a digest of business news in various sectors of Papua New Guinea.

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COMMENTARY Figure 2: Much has been written on PSCs. Celebrated analyst, Daniel Johnston, is prominent with his simplified mapping of fiscal and commercial regimes.

King & Spalding, an American multinational corporate law firm, has also written a most comprehensive book on the topic, ex libris McWalter.

< Page 10 Petroleum and Energy has valiantly tried to keep up with ever increasing core and essential petroleum sector functions, like licensing, operational approvals, and data collection, whilst otherwise becoming absorbed, and perhaps overwhelmed, in the peripheral though absolutely essential tasks of dealing with project area landowners, their benefit claims and their many other concerns and worries.

Plans for a NPA have been formulated in great detail several times over in the last few decades, only to be forsaken, lost, sidestepped, and derailed time and time again. The whole notion of the NPA was to bring together a cadre of PNG excellence to lead the petroleum sector as the guardian of PNG’s petroleum resources. The members of that cadre were to have been well-paid for their experience and important responsibility, and as an Authority of the Government, the NPA might have been able to retain and attract some of PNG’s finest graduates in such exciting and challenging work.

I also discussed the vital need for the commerciality of petroleum developments without which investment by the industry in field development would be withheld. I discussed how the 2020 amendments to the Oil and Gas Act imposed a test on a proposed petroleum development project that the applicant’s proposals should ref lect a minimum expected return to the State over the life of any recovery of petroleum.

However, that minimum expected return to the State is not specified in law and is only examined and determined by the Petroleum Advisory Board (PAB), and then considered by the Minister at the time of application for a development licence. This leaves investors with great uncertainty and unnecessary risk throughout the period of exploration, appraisal, development planning and the application phase of petroleum resource development.

There is thus now no absolute certainty of development if a discovery of commercial extent is made. Either the PAB or the Minister may set a threshold minimum expected return to the State during the consideration of an application for development.

This is at a very late stage in the

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cycle of petroleum resource development investment and comes just before the investing companies have to elect to develop their discovered petroleum accumulation, or not.

If a field development is marginally economic, the setting of such a minimum expected return to the State might in some circumstances make corporate consideration of development uncommercial, and as a consequence the field might be left undeveloped.

In any normal distribution of petroleum accumulations, there are a few large fields, a fair number of medium size fields and many smaller fields. It would not be wise to disadvantage the development of smaller and often smaller marginally economic fields, which tend to be developed after the larger fields have been found and produced, and which can readily sustain a domestic petroleum industry populated by smaller, and likely local companies with smaller investments. Oddly, as I said in 2023, the potential introduction of Production Sharing Contracts (PSCs) would obviate such a risky situation because the terms of development are normally locked into a PSC when originally negotiated and agreed between the State and the investing companies as contractors to the State at the outset. Being a contract, any capricious demand by the State for unexpected returns on petroleum development pursuant to a PSC would end up with the contract being the substance of legal proceedings.

I now want to pick up on my themes of a year ago and discuss

optimal and necessary arrangements for petroleum development in the light of some creeping petroleum policy change in recent years, and a keen desire by the Government to change the PNG petroleum regime and to adopt the use of PSCs. I particularly wish to demystify PSCs.

WHAT ARE PRODUCTION SHARING CONTRACTS? The notion of a Government sharing the production of oil and gas arising from the development of a successful petroleum exploration campaign by companies as part of a commercial venture was first developed and employed in Bolivia in the 1950s. A Production Sharing Contract (PSC) is an arrangement between a host Government and an international oil and gas company (IOC) for the division and allocation of the oil and gas produced between those two parties under a contract which provides for the exploration for and the development and production of petroleum resources. The allocation of a share of the production to the IOC serves to recompense the IOC for its investment and to provide a reasonable reward for its success. The Government, as owner of the resources, also provides a mechanism called a cost recovery allowance to the contractor for its work, but keeps the rest of the petroleum produced. The PSC was introduced in Indonesia in 1966, and PSCs of this kind or variants of the same are used extensively to agree the arrangements for oil and gas exploration, development, and production with oil and gas companies.

PSCs of one kind or another are used

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< Page 12 in over 40 countries, throughout the world.

The PSC is not the only manner by which a government may grant oil and gas exploration, development and production rights to commercial investors and gain a share in the value of successful petroleum production. Prior to the development of the PSC, exploration and production of oil and gas was typically governed by way of a licence or a concession agreement, and such regimes still remain in effect in many different places around the world. In many developing nations, the PSC is now the most common means by which a government allows corporate investment in the oil and gas industry. It provides a company or consortium of companies the right to explore and produce oil and gas. In many jurisdictions, there are political or nationalistic reasons for the adoption of PSCs as they perceptibly provide the Government with greater and more direct control over its resources and the ability to exert National sovereignty over the industry more readily.

After gaining independence in 1945, Indonesian’s concessions regime came under attack by certain nationalist groups leading to the nationalisation of Royal Dutch Shell’s assets. Indonesian Law 44/60 abolished the old concessionary system and specified that: “Oil and gas mining shall only be carried out by the State and implemented by State enterprises,” and further that, “the Minister may appoint other parties as contractors of the State enterprises.”

Alas, a decline in foreign investment in Indonesia’s oil and gas sector inevitably ensued. To mitigate this decline, the government eventually negotiated and agreed in 1962 with the Pan American Indonesia Oil Corporation, a subsidiary of Standard Oil of Indiana (later to become Amoco), a new contract based on legislation that was much more favourable to the Government.

The other large foreign petroleum investors, Caltex (a venture of Chevron and Texaco), Shell, and Stanvac (a venture of Socony [Standard Oil of New York] and Vacuum Oil and Standard Oil of New Jersey, later to become Exxon) followed by signing

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Contracts of Work in September 1963. These early PSCs were widely considered to be less controversial than the previous concessions system, as they enabled the government to maintain formal ownership of the resources until sold, while permitting the IOCs to exploit them for and on behalf of the Government. These contracts provided for the recovery of the costs of the contractor up to an agreed percentage of overall production plus an agreed, but often scaled, share of the produced oil and gas as a reward for its investment.

Although often cited as the example of the use of PSCs, in 2017, in a somewhat odd twist, the Indonesian Government established a new form of PSC called the Gross Split PSC. This completely abolished cost recovery systems pioneered in the classic PSCs of the 1960s. Instead, this new arrangement simply relies on an agreed split of the actual production between the Government and the IOCs, typically 43% to the contractor for oil and 48% to the contractor for gas production, with the balance of production going to the Government. Due to a loss of faith in Pertamina (Indonesia’s national oil company) in the late 1990s (an audit had shown that Pertamina had allegedly lost about US$6.1 billion from inefficiency and corruption in 1997 and 1998) the Indonesian Government took steps to rein in control of the industry at the Ministry level, but they had no financial ability to manage the proceeds of the sale of oil and gas which

were remitted to the revenue account of the National government. Without any retained funds, this then entailed the Ministry having to seek parliamentary appropriations to pay the cost recovery allowances to the IOCs, but then the Indonesian Parliament questioned these payments.

This brings home the need to think through the implications of changes in regime and the management of any given regime, especially if one is contemplating changing from a licence or concessionary regime to a contractor-based one.

Figure 3: Contents of a PSC: A sample from Equatorial Guinea, after the Republic of Equatorial Guinea, 2006.

WHAT IS A PSC? In a PSC, a government makes a contract with an IOC to provide the necessary and requisite financial, technical, management, environmental, social, planning and logistical skills in order to explore for, and hopefully, if successful in finding oil and gas accumulations, to produce the oil and gas. The host State (that throughout most of the world, normally owns the subterranean resources) will usually be represented by the Government or a Government Petroleum Ministry, Department, Authority or quite often some other type of agency of the State, such as its National Oil Company (NOC), which will take delivery of the State’s share of production and generally manage the commercial aspects of the PSC. The IOC is typically granted an exclusive time-limited right to explore for petroleum accumulations, appraise any discovery, plan and

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< Page 14 execute development and produce oil and gas within a defined area, generally known as the contract area. Under the PSC arrangement, the IOC bears the entire risk of the project, both technical and financial. If a commercial discovery is declared, the IOC becomes entitled to a portion of any subsequent petroleum produced as an effective payment for its efforts, in addition to recouping all its costs from the production. Conversely, if no discoveries are made, the IOC receives nothing.

The Government retains ownership of all the oil and gas produced, save for what oil and gas is allocated to the IOC as cost recovery petroleum, or is the subject of sharing between the IOC and the NOC as profit petroleum. This causes the Government to be involved in selling its share of the produced oil and gas.

In some jurisdictions, the IOC is allowed to keep the physical oil for itself, and the IOC makes just cash payments only to the NOC, based on the sale of the NOC’s petroleum entitlements; in others, physical oil and gas allocations are used to reward the IOC. The extent to which the NOC is involved with the exploration, development and production process varies from country to country with some NOCs seeking to take a significant lead in the business other than a just managing the PSC, whilst other NOCs take only a small participating interest in the commercial venture, so as to be within the operating consortium and to learn from it. There are commonly four key financial aspects to a PSC: royalty, cost recovery petroleum, and profit petroleum, though many other relevant matters are agreed in the PSC.

ROYALT Y Most often and foremost, the IOC is typically expected to pay a prescribed or agreed royalty as a percentage of the gross value of oil and gas production to the State as valued at the point of export from the contract area. The royalty is often, at the State’s option, taken as a physical share of production, or alternatively by way of a payment by the IOC equivalent to the sale price of the State’s royalty share of produc-

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tion. Sometimes, the percentage rate of royalty may be the subject of bids for a contract area by competing oil and gas companies when bidding for the same or similar areas. Royalty is a payment made in kind or related to produced volumes and price without regard to the profitability of the business. Therefore, in times of low petroleum commodity prices it has the effect of digging deep into profitability. However, for a host Government, royalty is an assured payment regardless of profitability, but proportionate to the value of the produced oil and gas.

COST RECOVERY PETROLEUM Following payment of any royalty, the IOC is normally entitled to a pre-determined maximum percentage of gross production from which it may recover all its genuine costs, with any costs not recovered being carried forward to the next accounting year. Such production is known as cost oil and cost gas, and again may be taken in cash or kind. Obviously, the IOC attempts to maximise cost recovery early in the cycle of production up to the agreed maximum percentage limit, so as to recoup its expenses soonest, and likewise the Government will scrutinise the costs submitted to it for recovery as to their genuine eligibility. That scrutiny involves approval of all procurements and sub-contracts of the IOC, and represents an enormous accounting burden for the Government.

PROFIT OIL The oil and gas remaining after the payment of royalty to the Government and the cost recovery allowance to the IOC by the host Government is known as profit oil and profit gas, and it is generally divided between the IOC and the Government in accordance with the production sharing provisions agreed and defined in the PSC. Quite often the Government’s share of profit oil and profit gas increases as the production rates increase.

INCOME TAX Finally, the IOC is quite often required to pay income tax on its share of net benefits which should strictly amount only to profit oil, as cost oil and cost gas represent only a recoupment and recovery of costs. However,

the application of income tax varies from jurisdiction to jurisdiction and in some cases the IOC’s notional income tax due is often paid by the NOC, or the State on behalf of the IOC, such that there is no financial impact on the IOC, there being just a journal entry between different parts of the Government. An income tax superposed on the PSC regime without appropriate tax deductions can rapidly make a fair PSC regime become a very hostile one.

In the calculation of the net take to the State under a PSC, one has to include the results of any Corporate Income Tax and all and any other taxes, levies or imposts that affect the outcome of the overall PSC. In some PSCs, there is simply no tax, and the royalty, cost oil and gas, and production share are deemed to be final fiscal devices.

Figure 4: It must be noted that the production or profit oil split is not the same as the overall net take to each party, after Daniel Johnston in International Petroleum Fiscal Regimes and Production Sharing Contracts.

GOVERNMENT INVOLVEMENT The objectives of the parties when negotiating a PSC and its terms will generally be diametrically opposed.

An IOC will strive to negotiate for itself as much independence and control as possible over operations, and it will want any State intervention in the running of the project to be kept to a minimum. Naturally, it will be keen to keep its costs low, by negotiating the highest cost recovery allowance and the largest production share it can, and it will seek the full recovery of all its costs. The Government will wish to have an

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< Page 16 overall say in the development of its resources in an orderly and systematic manner that creates synergies for future development. The Government will also wish to make as much money as possible, reduce cost recovery allowances, and have access to an IOC’s resources and relevant expertise, without spending much time and money. The Government may also have economic priorities for domestic petroleum supply to its economy to mitigate energy import requirements and obviate foreign exchange requirements.

Throughout the contract from exploration to development to production, the Government will want to ensure that the IOC is undertaking a technically appropriate exploration work programme with appropriate levels of investment and that the exclusive right to access land or the offshore area is being used efficiently. In addition, the Government will typically be concerned to secure as many rights and benefits for the people and local businesses, including affected local communities, as possible. This is generally accomplished by the optimisation of jobs and training for local workers through requirements to use local goods, services and contractor and subcontractor services as far is feasible and practical – this is what is typically called local content.

WHY THE PSC MODEL? The obvious advantage of the PSC model for a government is the minimal risk on its part throughout the value chain of the enterprise. It is thus able to reap the benefits of its natural resources without having to spend its own time and money even for development. This is not to say that the State does not pay. It inevitably pays for its share of all and any costs of exploration, development and production through the cost recovery process payable to the Contractor. In most cases, the Government will not have the technology needed to explore for and produce oil and gas, and so contracting the help of an IOC that has the appropriate skills, capacities and technology is usually necessary in order for the Government to exploit its natural resources optimally, especially in the offshore areas. The same is, however,

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Figure 5: The main elements of a PSC, after Hassan Harraz, Tanta University, Egypt, 2016.

Production Sharing Fiscal and Contract/Structure National Legislation Operational Aspects

Revenue or Production Sharing

Contract Negotiation

•

Government Participation

•

Work Commitment

•

Ownership Transfer

•

Relinquishment

•

Arbitration

•

Commerciality

• •

Insurance Royalties *

•

Bonus Payments

•

Taxation *

•

Cost Recovery Limits

•

Depreciation

•

Production Sharing*

•

Investment Credits

•

Domestic Obligations

Figure 6: Some terms of the petroleum regime may still be contained in legislation whilst others will be negotiable depending on the particular regime, after Daniel Johnston in International Petroleum Fiscal Regime and Production Sharing Contracts.

• Ring-fencing * Features commonly associated with contractor take

also true for licence and concessionary arrangements where even if the host Government has an equity option to take up a participating interest in a petroleum development project it will still pay for at least its pro rata percentage share of sunk and past exploration, appraisal and development planning costs up to the point of the establishment of facilities for development and the commencement of the recovery of the petroleum.

As and when exploration proves to be successful, the Government can secure long-term supplies and/or exports of oil and gas in a PSC regime, which it can trade as it sees fit. The long-term nature of a PSC enables the Government to predict future levels of oil and gas for domestic use, export and to make provisions in the national budget accordingly.

Alternatively, the PSC model can be most lucrative for the State, if it takes the option of taking its share of production as a cash payment, rather than in kind. It is also very common for PSCs to contain provisions that

as the production rate increases, the proportion of the production attributable to the Government may also increase, meaning that a significant and increasing proportion of the value of profit oil is paid to the host Government and its representative entity defined in the PSC. In all cases, at the initial stage of petroleum resource development, the IOC bears substantially all the financial risk. If, and only if, exploration proves successful and the discovered oil and/or gas accumulations are developed and produced, the IOC may be able to recover its costs through cost oil and/or cost gas and an agreed share in the profits of the remaining quantity of oil and gas.

As to whether the PSC model is more favourable to the State than to IOCs in contrast to the licence or concessionary system, ultimately depends on the rates used for the various fiscal and commercial parameters in each system. In a concessionary regime, costs are only recovered slowly as depreciation allowances against assessable

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< Page 18 income. The speed of the recovery of costs depends entirely on the terms set by law and those allowed to be negotiated in the framework of a PSC. It may or may not be possible for an IOC to negotiate the terms of a PSC with more, or less financially and commercially attractive terms for petroleum development than a licence or concession arrangement might otherwise have offered under a prior regime. It is all about the terms of the selected regime, whichever is applied.

One possible negative aspect of the PSC model is that it is an agreed and contractual arrangement, and not the product of binding and enforceable legislation. Thus, any breach of the PSC by either party will constitute a breach of contract for which civil relief may be obtained. Pursuant to the PSC model, the State always remains the owner of the resources, with the contract establishing the applicable compensation arrangements and level of NOC or Government involvement in the asset. The negotiation of a PSC is up front before any investment is made in exploration by the IOC, so the terms are locked in. PSCs tend to afford IOCs less freedom to run an asset, with Contractors being subject to restrictions and required approvals in addition to those contained in the applicable legislation and regulation.

COMMONLY USED ALTERNATIVES TO THE PSC There are several substantial alternatives to the PSC model. The differences in these alternatives are mainly in relation to the level of control granted to the IOC, the level of involvement of the NOC, and the compensatory arrangements for the investment made.

LICENCES Generally, under a licence arrangement, there is normally little scope for an IOC to negotiate specific fiscal or commercial terms in relation to its exploration and production rights.

Licensing regimes and their terms and conditions are typically standardised and embedded in legislation, such that the terms of each licence are near identical. This regime is most common in developed countries,

20 PNG BUSINESS NEWS

e.g. UK, Norway, the Netherlands, and Australia. The terms of licences may change from time to time as the Government seeks to restrain or encourage sector investment. The IOC is typically granted complete control over the contract area and complete ownership over any oil and gas that it successfully produces. Unlike PSCs, where ownership of the resources always remains with the State, in licence regimes ownership generally passes to the IOC at the wellhead, with the IOC’s profits from the sale of the oil and gas produced being the subject to general tax legislation, or specific petroleum taxation legislation. Like in PSCs, if the IOC fails to find commercially producible oil and gas within the limited terms and periods of their licence, they go home empty handed. In some jurisdictions, the Government has an entitlement to join in at the development stage when the risks of finding oil or gas have been mitigated and it may either chose to pay its proportionate share of costs of exploration and development and participate alongside the IOCs, or be carried in some form or another. This can be a very profitable feature for the Government, but it essentially takes a slice of the venture away from the IOC venture at the proportionate sunk costs only, without any regard or compensation for the commercial value of any oil and gas discovered by the IOC.

CONCESSIONS A concession arrangement is generally subject to a greater level of negotiation than a licence. The IOC is typically granted proprietary rights over the contract area and complete ownership over any oil and gas that it successfully produces, subject to the payment of a royalty and income tax, each of which may vary in rate depending on the level of production as negotiated and agreed. There may be specific taxes like the Additional Profits Tax (APT) which progressively applies further amounts of tax, the greater the rate of return of the production project.

In some jurisdictions, licences have become more concession-like as the terms and conditions of the licences have increasingly become the subject of Agreements with the Government defining those agreed terms which are supplementary to or adjust the current and applicable legislation as sought by and agreed by both the Government and/or the IOCs.

Figure 7: The IMF has some excellent specialists in its Fiscal Affairs Department who advise Governments on resource regimes and it has often commissioned books and studies on such matters as in the excellent handbook on Administering Fiscal Regimes for Resource Industries

by Jack Calder, formerly of the Oil Taxation Office of the UK, ex libris McWalter.

SERVICE CONTRACTS Under a service contract, the IOC provides its technical services to the State to explore and develop oil and gas resources, and therefore in so many ways, it is similar to a PSC. However, remuneration to the IOC is usually by way of a service fee or payments based on the value of oil produced in US$ per barrel for oil and other hydro-

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PNG BUSINESS NEWS

21

COMMENTARY

< Page 20 carbon liquids, or per million British Thermal Units (BTU) of energy for natural gas. The term of a service contract is often very short, leaving an IOC with considerable risk and no guarantee of a long production period.

Service contracts are common in Iran, Iraq and Kuwait and have also been used from time to time in Indonesia and the Philippines.

THE OVERALL PICTURE By and large, about half the world’s petroleum prospective Nations use licence/concessional systems and about half use PSC arrangements, though many of each of these are strictly hybrids involving features of one regime and the other. No particular petroleum regime is superior to any other and much depends on the degree to which the host Nation wishes to promote or reduce exploration investment according to the terms applied. Sometimes, the IOC will tolerate a slightly tougher regime, if they know that it will be stable and well-implemented in a professional and organised manner.

Good subsurface prospectivity and

a consequent high chance of finding accumulations of oil and gas can often be spoilt by self-imposed surface risks.

Factors that may induce surface risk are Governments that: successively make petroleum regime changes, politically drive or make unqualified determination of fiscal and commercial terms without regard to the ultimate take to each party in the case of success, and the poor governance of the sector in general leading to untimely and late decision making.

Indeed, a good regime whether it be a PSC-type or a licence/concessional one, will depend on the enforcement of its terms and conditions and the values agreed for those terms and conditions that determine economic outcomes.

The great difference between PSCs and other arrangements is that PSCs keep control over the produced oil and gas and its sale and disposal with the State, whereas licences and concessions leave such matters and the fate of the industry more to the will and imperatives of the corporates.

The intrinsic control of a contractor by the NOC under a PSC means the Government has to be better equipped, more efficient and

more knowledgeable to operate such a regime than under a licence or concessionary regime. The State or its representative (usually its NOC) needs to make the PSC work in its favour as it is the manager of the entire enterprise and needs to lead the way. Any failure to step up to such challenges will result in a poorly planned development of the industry with delays, unrealised synergies leading to lost production, and overall loss of value from the resources.

No matter what regime is applied to the development of petroleum resources, there is no doubt that resolute and appropriate petroleum policy formulation and firm and fair administration of the sector will pay dividends for any host Government willing to invest in such. The definition of a petroleum regime is not a new game; it has been done many times across the world by many Governments and there is very sound collective advice on the subject which is relatively inexpensive to access compared to the enormity of the task and the value of managing a Nation’s petroleum resources optimally.

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COMMENTARY

Addressing Impacts of Sudden Mine Closures, Community Resilience in PNG

A

research Officer with the PNG Extractive Industries Transparency Initiative says lack of realistic policies and framework to address impacts of sudden mine shutdowns, affect businesses and communities among those whose lives depends entirely on the mine.

Eileen Mosusu, in her presentation at the Geoscience, Exploration and Extraction Conference in Port Moresby shed light on a pressing issue faced by communities affected by sudden mine closures.

Her research, which focuses on the ‘absence of realistic policies and frameworks to address the impacts of mine shutdowns’, offers both insights and recommendations for industry leaders and policymakers. Miss Mosusu identified two key areas of concern:

THE NEED FOR REALISTIC POLICIES ON SUDDEN MINE CLOSURES Mosusu emphasized that Papua New Guinea (PNG) has experienced several sudden mine closures, notably the Panguna Mine on Bougainville in the Autonomous Region, the Porgera Mine in Enga Province, and the Hides Gas Project in Hela Province.

These unexpected closures of operations leave impacted communities vulnerable, often triggering social unrest and economic collapse.

“When mines close abruptly, the lack of a structured plan for the affected communities’ results in chaos.

There is a breakdown in social and economic systems, which escalates tensions,” she said.

COMMUNIT Y RESILIENCE AND ADAPTATION IN THE FACE OF ADVERSIT Y Despite the challenges, Mosusu highlighted the resilience of communities like those in Panguna, in Autonomous Bougainville. Thirty years after the mine closure and a subsequent civil war, Panguna’s communities have developed innovative survival strategies.

“From artisanal mining to

24 PNG BUSINESS NEWS

geo-tourism, these communities have found ways to thrive. They’ve turned to reusing and recycling materials and fostering a new market economy.

This adaptability showcases their resilience,” Mosusu explained.

MOTIVATION FOR THE RESEARCH Mosusu’s connection to Bougainville played a significant role in shaping her research.

“Bougainville’s history is deeply intertwined with the extractive industries, and as my home island continues its journey toward independence, the lessons learned from the Panguna Mine closure remain critical.

“My background as an Environmental Scientist, specializing in heavy metal assessment, further motivated me to explore the impacts of artisanal mining on the environment

and local communities,” Mosusu stated.

ALIGNMENT WITH PNGEITI’S GOALS Although her research began prior to joining PNGEITI, Mosusu highlighted how her findings align with the organization’s broader objectives of promoting transparency and accountability in the extractive sector.

“Sudden mine closures often leave communities without critical support and economic stability, which underscores the need for better risk management strategies.

PNGEITI’s mission to ensure extractive activities are managed in a way that minimizes negative outcomes for communities directly aligns with the discussions my research generates.”

Mosusu pointed out that PNGEITI can play a key role in ad-

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COMMENTARY

< Page 24 vocating for the inclusion of sudden mine closures in policy discussions, ensuring companies and governments are held accountable for their responsibilities toward affected communities.

SHAPING FUTURE POLICIES Mosusu hopes her research will inspire conversations around creating frameworks that anticipate sudden mine shutdowns. She noted that while mining projects are required to present Mine Closure Plans, these often fail to address unexpected closures.

“We must ask ourselves, what happens if a mine closes ahead of schedule? Do we let the community crumble, or do we implement policies that allow these communities to thrive sustainably, with or without the mine in operation?”

IMPLICATIONS FOR STAKEHOLDERS Mosusu acknowledged the sensitivity of discussing the Panguna Mine, giv-

26 PNG BUSINESS NEWS

en its historical context and ongoing human rights complaints.

However, she stressed the importance of considering the longterm impacts of mine closures on communities and the role artisanal mining plays in sustaining local economies.

“Engaging in transparent and accountable practices is essential.

Policies must ref lect the realities on the ground, especially for artisanal miners, and include proper licensing and environmental protections.”

FUTURE RESEARCH AND RECOMMENDATIONS Looking ahead, Mosusu plans to participate in the 6th Alluvial Mining Convention to further explore the discussions around the alluvial mining sector.

She also called on PNGEITI to continue supporting research in the extractive industries by publishing comprehensive reports, partnering with academic institutions, and sponsoring case studies that showcase best practices in governance.

Executive Director of PNGEITI,

Lucas Alkan said the underlying objective of PNGEITI is to promote transparency and accountability in the extractive sector and that its mission to ensure extractive activities are managed in a way that minimizes negative outcomes for communities directly aligns with the discussions points raised

by Miss Mosusu in her research paper.

In saying this Mr. Alkan said it is “on PNGEITI to continue supporting research in the extractive industries by publishing comprehensive reports, partnering with academic institutions, and sponsoring case studies that showcase best practices in governance”.

In her concluding recommendations for policymakers and industry leaders, Mosusu urged stakeholders to engage in conversations about sudden mine closures and their impacts on local communities.

“We need frameworks that sustain local economies with or without mine operations, ensuring that communities can continue to thrive after the mine is gone.”

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PNG BUSINESS NEWS 27

BUSINESS

Australia-PNG New Development Partnership Plan Launched By: ROSELYN EREHE

T

he Australian Minister for International Development and the Pacific, Hon. Pat Conroy, officially launched the Australia-PNG Development Partnership Plan (DPP) for 2024-2029 at the Australian High Commission on Thursday 19th September in Port Moresby, Papua New Guinea.

This initiative reinforces Australia’s commitment to PNG as its largest development partner, Conroy’s office said in a statement.

With an estimated $637.4 million in Official Development Assistance funding for the 2024-25 fiscal year, and over $2.5 billion in budget support loans since 2019, Australia aims to strengthen PNG’s economic growth and stability.

Minister Conroy emphasized that the DPP is aligned with Australia’s new International Development Policy, which prioritizes locally led development.

He said, “We know that infrastructure is a huge piece of that puzzle, particularly, telecommunications, roads, ports, aviation and energy. This is why we are scaling up investments in critical economic and social infrastructure from $200 million annually to $250 million annually, recognizing the role this will play in PNG’s future prosperity.

“Through this plan we will work with PNG on building access to electricity across the country, but we’ll do it through innovative, smart solutions that use renewable energy and resilient technologies.”

The importance of continued economic growth is central to PNG’s Medium-Term Development Plan.

Conroy stated, “Our approach is to be guided by your priorities, your needs, your ambitions.”

“We know you want a stable economy that continues to broaden and generate jobs for your people,” he added.

The DPP outlines a roadmap for Australian assistance over the next five years, with key features including a $200 million bilateral security agreement, an increase in educational investment to $100 million, and intensified efforts towards addressing climate change and promoting gender equality.

28 PNG BUSINESS NEWS

Minister Pat Conroy giving his Official Remarks at the Launching of the Australia-PNG DPP.

Conroy noted, “We’re scaling up investments in critical economic and social infrastructure from $200 million annually to $250 million annually, recognizing the role this will play in PNG’s future prosperity.”

At the launch event, 21 Australian development programs were featured, showing the extensive reach of Australia’s investment in various sectors across PNG. Conroy addressed the necessity of improving security in PNG, stating that “people need stable, safe and secure societies in which to thrive.”

The $100 million Australia-PNG Law and Justice Partnership will focus on enhancing internal security, police training, and infrastructure across ten provinces.

“This is why we are stepping up our work with you on policing, improving internal security. Through our $100 million Australia-PNG Law and Justice Partnership, we are: • providing targeted police training and supporting police recruitment, • building much-needed police infrastructure across 10 provinces and • providing full circle law and justice support, from investigations to the courts to corrections as well as improving access to justice.”

Moreover, the plan seeks to create inclusive communities. Conroy mentioned the ongoing support for women and individuals with disabilities, as over the past six months, the PNG Women Lead program has assisted over 3,000 women and girls in accessing crisis support services for

gender-based violence.

On education, the plan will increase investments to help students complete their studies and diversify their skills.

Conroy announced the launch of a new “Diploma in Teaching Primary” aimed at upskilling 15,000 elementary teachers, with funding for the first 400 teachers enrolled in the program.

Conroy reaffirmed Australia’s long-standing commitment to PNG, citing that since 2015, Australia has delivered over $5.6 billion in Official Development Assistance.

The DPP “is a collaborative effort to enhance access to renewable energy, improve infrastructure, and support health services, among other initiatives.,” he said.

Conroy reiterated the partnership and collaboration between both countries. “All of this work we do together, with our PNG partners, to improve the lives of people across Papua New Guinea.

“As we have for all of the 49 years so far since independence, Australia is backing PNG’s economic development and ambition for its people.”

Present for the event were Hon Sir Ano Pala, Minister for National Planning; Hon Kinoka Feo, Minister for Higher Education, Research, Science & Technology and Sports; Hon Lucas Dekena, Minister for Education; and Hon Rufina Peter, Governor of Central Province.

Heads of mission; heads of multilateral agencies; leaders from private sector and civil society were also present.

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PNG BUSINESS NEWS 29

BUSINESS

APNGBX: Strengthening Ties and Driving Growth By: ROSELYN EREHE

T

he Australia-Papua New Guinea Business Exchange (APNGBX) recently highlighted opportunities for collaboration and investment in PNG’s growing economy. Key discussions focused on infrastructure development, renewable energy, and the broader economic landscape. Key Takeaways included: Global Economic Trends: Senior Economist Justin Smirk from Westpac Bank analyzed the global economic outlook, emphasizing the need for ongoing investment and adaptation to changing conditions.

Smirk said this in the APNGBX Breakfast meeting, recently co-hosted by the Port Moresby Chamber of Commerce and Industry (POMCCI), which informed the private sector on Australian Government investments in PNG. In his presentation, Smirk emphasized the significance of geopolitical risks and the ongoing fragmentation of the global economy.

“We are moving to a world where we have been accustomed to low inflation and low interest rates for the past 20 years. This stable environment is shifting; we will see higher inflation and more volatility in energy prices, which means interest rates will rise and become more expensive,” he said.

Smirk also noted the trend of aggressive rate cuts in major economies, including the US as a response to global inflationary pressures.

“We are loosening rates to manage inflation while allowing growth to continue,” he explained, indicating a shift away from recession concerns in these regions.

Discussing China, Smirk remarked on its transition from housing investment to a focus on infrastructure development.

While China continues to play a critical role in global commodity demand, its approach to energy consumption is evolving.

“They want to export electric cars and are investing in wind and solar panels, indicating a significant shift in their economic strategy,” he said.

Turning to PNG, Smirk reflected on the nation’s economic recovery since earlier this year, despite facing challenges such as security issues and utility constraints.

“While there were concerns about growth, we observed solid employment growth in the early part of the year.

However, since then, we’ve seen a flattening trend.”

Smirk also provided insights into currency forecasts, noting that the Australian dollar is expected to rise against other currencies, despite a weaker position against the US and UK dollars.

“On current trends, I am comfortable with how things are unfolding. We expect the Australian dollar to strengthen further,” he added.

Australia’s Infrastructure Investment: The Australian High Commission highlighted Australia’s significant investments in PNG’s infrastructure, including power, telecommunications,

and transport as presented by Ms Diane Barclay, Minister-Counsellor.

Barclay, whose portfolio includes key sectors such as electrification, telecommunications, and transport, said: “I have both the privilege and challenge of looking after economic infrastructure and health engagement at the Australian High Commission here in Port Moresby.”

“The Government of PNG has requested that 50% of our aid funding be directed towards infrastructure investment,” she explained, reflecting PNG’s urgent need for enhanced planning and development in this area.

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< Page 30 Australia invests approximately $200 million annually in infrastructure across various sectors in PNG, alongside an additional $800 million in the pipeline through the Australian Infrastructure Financing Facility.

“Infrastructure investment is a key enabler for economic activity,” Barclay said as she elaborated on current projects, particularly in the power sector, aimed at improving the reliability of on-grid power.

“We have been repairing the Rauna hydropower station, which is expected to restore around 15 megawatts of power,” adding that another upgrade would bring the total to approximately 25 megawatts.

She also referenced efforts to enhance provincial grids by integrating solar and diesel power to reduce costs and improve reliability.

“In July 2023, the energy power reported less than 50 hours of power outages in our café, down from 500 hours in the same month the previous year.” This achievement underscores the positive impact of Australia’s infrastructure projects in local communities, she said.

Barclay noted the role of the Coral Sea

Cable in improving internet connectivity.

“While the Coral Sea Cable has made a significant difference, it remains underutilized,” she remarked.

Reducing wholesale internet prices is essential for increasing internet penetration, currently around 25%, she said. “With a three-fold improvement in affordability, internet penetration could rise to 70%, potentially contributing around $18 billion a month to the PNG economy.”

Barclay also touched on maritime investments, which are vital for enhancing transportation and trade capabilities within PNG. Partnerships: The APNGBX24 breakfast meeting is part of a five-day event hosted by Austrade, in collaboration with the Department of Foreign Affairs and Trade (DFAT), to enhance economic ties between Australia and PNG by offering Australian businesses direct access to key players and decision-makers in PNG’s growing economy.

Key collaborators of the event include ANZ, Westpac, and the Chambers of Commerce in Lae and Port Moresby. The event gathered industry leaders, government officials, and business representatives

in PNG, focused on expanding business opportunities in renewable energy, infrastructure, and construction.

Delegates attending APNGBX24 had the opportunity to participate in roundtable discussions, networking events, and business-to-business meetings, focusing on PNG’s evolving infrastructure and clean energy sectors.

The country’s development plans and vision 2050, including the Highlands Highway Investment Program and the PNG government’s Connect PNG by roads initiative, present significant opportunities for Australian companies in construction, logistics, and technology.

The delegation also focused on renewable energy projects in regards to PNG’s development-plan to electrify 70 per cent of the population by 2030.

This gave an opportunity for Australian companies specializing in solar, hydro, and other renewable energy solutions to find significant potential in partnering with local stakeholders on these long-term, sustainable projects.

The POMCCI Breakfast meeting was held in September 26th at Holiday Inn in Port Moresby. Follow and check both the PNG Business News Website and POMCCI website for the Next POMCCI Breakfast Meeting.

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PNG BUSINESS NEWS 33

BUSINESS

ADB, PNG Agree on Action Plan to Accelerate Projects

A HISTORY OF SUCCESS, A FUTURE OF GROWTH. Awards & recognition

18

T

he Asian Development Bank (ADB) and the Government of Papua New Guinea (PNG) have agreed on a timebound action plan to accelerate the implementation and enhance the performance of ADB-f inanced projects, following discussions at the 2024 Country Portfolio Review Mission Roundtable Meeting.

The hybrid meeting was cochaired by ADB Country Director for PNG, Said Zaidansyah, and Department of National Planning and Monitoring Acting First Assistant Secretary, Reichert Thanda.

It was attended by various government of f icials, including Department of Works and Highways Acting Secretary, Gibson Holemba, and Department of Treasury Deputy Secretary, John Uware, as well as project directors and ADB staf f.

Participants reviewed the overall performance of the project portfolio and discussed delegation of responsibilities with executing and implementing agencies.

“As the largest multilateral development partner of PNG, ADB will continue to support diversif ied, sustained, and inclusive growth in the country,” said Mr Zaidansyah.

34 PNG BUSINESS NEWS

“The development impact and ef fectiveness of ADB’s support rely on the quality of portfolio performance, and we will keep collaborating with the government to enhance this performance and build the capacity of the relevant government agencies.”

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PNG BUSINESS NEWS 35

BUSINESS

Aropa Airport Upgrade Scheduled for 2025

T

he Aropa Airport upgrade project is set to move forward following the recent contract signing between the National Airports Corporation (NAC) and China Railway Construction Group Ltd (CRCG Ltd), a significant milestone in the airport’s development since it was re-opened a decade ago.

The signing was witnessed by Autonomous Bougainville Government (ABG) President, His Excellency Ishmael Toroama, and the National Minister for Civil Aviation, Hon.

Walter David Schnaubelt.

Valued at K58,201,511.08, the contract forms part of NAC’s Civil Aviation Development Investment Project II (CADIP II). The project is slated to commence in the first quarter of 2025 and will take approximately 28 months to complete.

The scope of works for the Aropa Airport upgrade includes: • Repair and strengthening of aircraft pavements • Resurfacing with bituminous chip seal

• Construction of a new terminal building and car parking facilities • Installation of new precision approach path indicator (PAPI) systems • Upgrading airport power and water supply, sewerage systems, land airside electrical systems, and other associated infrastructure The Aropa Airport upgrade is a key infrastructure project that aims to enhance Bougainville’s regional connectivity and support the region’s economic growth.

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BUSINESS

PM: Paga Hill SEZ, Casino to Spur Port Moresby’s Next Development Wave

P

ort Moresby is set to become the heart of Papua New Guinea’s next wave of development and modernisation, with an eye on the booming Asian market, Prime Minister Hon. James Marape declared recently.

At the groundbreaking ceremony for the Paga Hill Special Economic Zone (SEZ) Satellite Casino, the Prime Minister emphasised the capital’s role in leading the country’s economic transformation.

This ambitious project, which includes development of hotel rooms, is backed by an international developer and is slated for completion within six months, marking another milestone in PNG’s progress, Marape said.

The Prime Minister stressed that the casino is strictly only for overseas guests, tourists, high-earning Papua New Guineans and “high rollers” and is not open to all citizens.

“Similar to Singapore’s casino model, where locals are protected by specific regulations, we will ensure that only Papua New Guineans with an annual disposable income above K200,000 will be eligible to participate. Entry will require identification and membership,” said Marape.

These measures align with recent adjustments to the minimum bet on pokies, increased to K100, to discourage participation by lower-income earners.

These changes are designed to curb overseas gambling expenditures by affluent Papua New Guineans, who currently travel to destinations such as Cairns, Brisbane, Singapore, and Manila for casino experiences, the Prime Minister said.

The Paga Hill SEZ project, which features hotels, residences, and commercial centers, is a transitional development poised for long-term expansion pending compliance with regulatory standards. Marape also announced a priority hiring initiative for local Motu-Koitabuans within the SEZ development.

Paga Hill Development Company (PHDC) Chairman, Mr. Peter Barge, underscored the project’s focus on attracting tourists and expatriates, assuring that stringent entry require-

38 PNG BUSINESS NEWS

ments will align the casino with similar establishments in Singapore.

“In modern PNG, you need facilities, you need entertainment, all manner of amenities for both citizens and visitors to enjoy living in our country,” the Prime Minister said.

“There can be no better place to start the next wave of our growth than in Port Moresby, which has been the hub of government and commerce over the last 100 years when we were first visited by government, missionaries, and traders.”

Reflecting on the city’s legacy, Marape highlighted Port Moresby’s deep historical connection with the Motu-Koita people, particularly the Hanuabada villagers, acknowledging the area as the birthplace of modern-day PNG. He continued by sharing his aspirations for Papua New Guinea’s future, recounting his recent speech at the United Nations General Assembly in New York City, where he declared the nation’s commitment to becoming a producer of finished goods instead of simply exporting raw materials.

The Prime Minister proudly reported on the nation’s economic growth, noting an increase from K79 billion in 2019 to a projected K122 billion by the end of this year, with forecasts of K130 billion by next year and K150 billion by 2027.

“I assure those who choose to invest in PNG that you are coming into a growing economy, not one that is

stagnant,” he said, noting the quicker return on investment achievable in PNG compared to larger economies.

Marape stressed the government’s commitment to tackling law-and-order challenges, improving education, and enhancing healthcare as part of a comprehensive strategy for a modernised PNG. He expressed his optimism about attracting tourists from major regions, such as China, Australia, and Southeast Asia, who are projected to enjoy the offerings at the Paga Hill Precinct. Additionally, he urged investors to prioritise local employment, particularly for the Motu-Koita people.

“Our vision for Port Moresby includes transforming the area from Koki to Konebada into a modern center for business and commerce, and establishing the Waigani Precinct as the governmental heart of the city,” the Prime Minister said.

“These two hubs will become symbols of PNG’s ambition to rise and progress on the global stage, developed at the very earliest.”

Looking forward, Marape acknowledged the success of Vision City Mega Mall as a prime example of what Port Moresby can achieve, serving as an inspirational model for future developments.

“I offer my congratulations and commendations and look forward to every step forward. May PNG prosper in this development,” he said, concluding with a vision of unity and optimism for the nation’s future.

Paga Hill Estate SEZ’s planned foreshore promenade, featuring various tourism infrastructure including craft market, alfresco dining, amphitheatre, public plaza, community cinema, mangrove promenades and various lookouts

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PNG BUSINESS NEWS 39

BUSINESS

Marape Hails Achievements of Commonwealth Gab in Samoa

P

rime Minister Hon. James Marape has applauded the significant achievements of the 2024 Commonwealth Heads of Government Meeting (CHOGM) held in Samoa, which he also commended for its successful hosting.

The meeting, themed ‘One Resilient Common Future: Transforming our Common Wealth’, brought together leaders from 56 Commonwealth nations from October 25-26 to address critical global challenges, including climate change, sustainable development, and social equity.

PM Marape underscored the importance of these agreements for Papua New Guinea and the broader Pacific region, describing them as “timely and critical” for building a resilient future. He reiterated his commitment to working closely with Commonwealth partners to advance these initiatives.

Key Agreements from CHOGM 2024 include: • Ocean Declaration: The leaders adopted a groundbreaking Ocean Declaration aimed at safeguarding the health and sustainability of the world’s oceans. This agreement focuses on mitigating the impacts of climate change on marine ecosystems, addressing ocean pollution, and promoting sustainable ocean-based economies.

Marape welcomed this initiative, stating, “The Ocean Declaration provides the Pacific region with a strong foundation to protect our oceans, which are vital for our food security, economic growth, and cultural heritage.”

• Climate Action and Resilience: A central pillar of the discussions was the urgent need for climate action, with leaders reaffirming their commitment to intensifying efforts to combat climate change.

This includes scaling up adaptation and mitigation strategies, particularly for small Pacific Island nations, that face severe climate risks.

Leaders agreed on the need for innovative climate financing solutions to support vulnerable countries.

The Prime Minister stressed the importance of this agreement, saying, “Papua New Guinea and

40 PNG BUSINESS NEWS

our Pacific neighbours are on the front lines of climate change. The commitments made here are not just about addressing environmental challenges—they are about safeguarding our future.”

• Strengthening Democratic Institutions: Commonwealth leaders pledged to strengthen democratic governance, uphold human rights, and reinforce the rule of law across member states. This agreement aims to promote political stability and peace through resilient democratic institutions.

“Strong, transparent, and accountable institutions are essential for peace and development. This is particularly important as we work to ensure that all citizens, including the most vulnerable, are represented and protected,” PM Marape said.

• Empowering Women and Youth: Recognising the vital role of women and youth in driving progress, Commonwealth leaders agreed on new strategies to promote gender equality and youth empowerment. This includes initiatives to enhance entrepreneurial opportunities, increase access to education, and develop skills for the 1.5 billion young people across the Commonwealth.

“Our youth are the future of the Commonwealth, and it is crucial that we invest in their potential.

Likewise, empowering women to participate fully in economic and social life is essential for our nation’s prosperity,” said Marape.

• Economic Recovery and Sustainability: In the face of ongoing global economic challenges, Commonwealth leaders agreed to support sustainable economic recovery and growth. This includes promoting trade, investment, and innovation, as well as fostering resilient economies that can withstand future disruptions.

The Prime Minister highlighted the importance of this agreement for Papua New Guinea’s economic development, saying: “A sustainable and inclusive economic recovery is key to building resilience. We must ensure that all citizens benefit from growth, particularly as we recover from the economic impacts of the pandemic.”

In addition to these landmark agreements, CHOGM 2024 also included discussions on key Commonwealth programmes such as health, education, and digital transformation.

The meeting featured ministerial and bilateral sessions, as well as four major forums—focused on youth, women, business, and people—where participants shared best practices and showcased progress on key issues.

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BUSINESS

< Page 40 Marape expressed his gratitude to the Government of Samoa for hosting a successful CHOGM and praised the leadership of His Majesty King Charles III, who attended his first CHOGM as Head of the Commonwealth.

He also acknowledged the work of outgoing Commonwealth Secretary-General Patricia Scotland, saying: “Her leadership has been instrumental in advancing the interests of small states like Papua New Guinea, and we are grateful for her dedication to the Commonwealth.”

The Prime Minister reaffirmed Papua New Guinea’s commitment to the Commonwealth’s shared values and goals. “Through collective action, we can address the challenges of today and build a resilient, prosperous future for all members of our Commonwealth family,” he said.

Before leaving from Apia for Port Moresby, Marape said: “I offer my highest commendations to Prime Minister, Hon. Fiame Naomi Mataáfa, her government and the people of Samoa on successfully hosting this Commonwealth meeting.”

The Prime Minister reaffirmed the importance and value of the Commonwealth, which he said continues to safeguard and promote ideals important to its member countries around the world, besides the economic significance of combining 56 nations as a block.

“The Commonwealth has found its place again in the world’s family of nations. We have many blocks of nations in the world, whether political or economic; some based on ideology, some based on commerce and trade, others based on region.

“But this family of nations, which covers a good part of the world, shares ideals of democracy, free trade, and promotes equality and equity.

“Most of us come from a shared colonial past, but from Papua New Guinea’s perspective, we say ‘past is in the past’.

We look forward to constructing a future for individuals, families and our people.

“The Commonwealth family of nations has over 2.6 billion people. The combined economic volume of these nations equals to $20 trillion making it a massive economic block in terms of people and economy, globally speaking,” said PM Marape.

The Prime Minister highlighted Papua New Guinea’s stance, delivered to the 27th CHOGM.

42 PNG BUSINESS NEWS

“Papua New Guinea spoke on the theme of reflecting the diversity of humanity. We have over 800 languages and many tribes within these language groups. Despite our vast diversity, we are able to hold together 49 years on since gaining Independence and together facing our 50 years of nationhood next year 2025.

“The Commonwealth, in every sense, represents a similar diversity on the global scale. Fifty-six (56) nations from all continents and areas of Planet Earth coming together in the goal of sharing beliefs and value of democracy, free trade and equality of people,

irrespective of religious preferences, individual cultures and differences, race and colour, by embracing our diversity and living together as the human race on Planet Earth,” said Marape.

The Prime Minister arrived in Samoa on Thursday, 24 October, joined the leaders for the opening of the CHOGM and meetings on Friday, 25 October, and departed on Sunday, 27 October 2024.

PNG Minister for Foreign Affairs, Hon. Justin Tkatchenko attended Saturday’s session on the Prime Minister’s behalf during his observance of Sabbath.

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BUSINESS

Marape Holds Bilateral Meeting with New Indonesian President

P

rime Minister Hon. James Marape met with Indonesia’s newly inaugurated President, H.E. Prabowo Subianto, in Jakarta shortly after the President’s official swearing-in.

The bilateral meeting, held at the Presidential Palace, focused on the future of relations between Indonesia and Papua New Guinea.

“President Subianto and I had a very productive bilateral meeting on behalf of our countries,” Prime Minister Marape stated, as was accompanied by Foreign Affairs Minister Hon. Justin Tkatchenko and Defence Minister Hon. Billy Joseph.

“Papua New Guinea was granted the unique privilege of holding discussions with the Indonesian President immediately following his inauguration. We ref lected on the progress in Indonesia-PNG relations under my leadership, starting with former President Joko Widodo and now continuing with President Subianto,” Marape added.

He highlighted the conversation’s focus on expanding cooperation across a wider range of areas, and also underscored the opportunity to learn from Indonesia’s economic achievements.

“Indonesia is a country from which PNG can gain valuable

44 PNG BUSINESS NEWS

insights, particularly in economic growth, and we anticipate a bright future in our relations under President Subianto.”

Background on Indonesia-PNG Relations Papua New Guinea and Indonesia have maintained a strong diplomatic relationship since PNG’s independence in 1975. The two countries share a common border and collaborate on matters such as trade, security, and education.

With Indonesia’s expand-

ing economy and its significant inf luence in the Pacific region, it remains a vital partner for PNG. Under Prime Minister Marape’s leadership, relations with Indonesia have deepened, particularly in economic development, defence, and border management.

This recent meeting builds on these foundations, marking a step towards further enhancing the partnership between the two nations under President Subianto’s leadership.

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BUSINESS

New Zealand ‘Steady, Reliable’; Marape Commends Neighbor for Consistent Support to PNG

P

rime Minister Hon. James Marape has described New Zealand as “steady and reliable” in its partnership with Papua New Guinea during his meeting with New Zealand High Commissioner, H.E Peter Zwart recently.

The bilateral meeting saw the two leaders discuss common issues of mutual interest between the two countries, New Zealand’s involvement in community-development projects throughout the country, ongoing technical support to the revitalization of the Papua New Guinea public service, and Bougainville.

In the next three years, New Zealand expects to invest some K350 million into projects and programs in PNG, including the rehabilitation of Lae market which has started.

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BUSINESS

Marape Thanks Japan for 50 Years of Development Assistance to PNG

P

rime Minister Hon. James Marape has acknowledged the special bond Papua New Guinea has with Japan, as he congratulated Japan International Cooperation Agency ( JICA) on 50 years of delivering Japan’s development assistance to PNG. JICA, the Japanese government agency that delivers the bulk of the Official Development Assistance (ODA) to developing countries worldwide, opened its office in PNG in 1974, one year before PNG gained its Independence and one year before Japan and PNG began their diplomatic ties.

This year 2024 sees 50 years of JICA’s operation in PNG, which has resulted in many successful initiatives in fisheries, agriculture, health, education, environmental protection, rural electrification, and projects such as a fisheries program with National Fisheries College in New Ireland Province, upgrading of the Port Moresby General Hospital, Port Moresby sewerage project, and the recently opened Nadzab Tomodachi International Airport in Morobe Province.

Marape, during a dinner event hosted to mark the occasion, thanked Japan and JICA on behalf of the government and people of Papua New Guinea in a moving speech, describing Japan as a “sincere and genuine friend”.

He said Japan has continually given assistance and support to PNG without asking for special favours, choosing to be with PNG in its infancy with an economy worth less than US$1 billion to now producing resources such as liquefied natural gas, supplying tuna to Japan, and maintaining a robust democracy.

“Your friendship is sincere. You come to the table without asking us to return the favour. You give fully and I want to say PNG subscribes to the

< Page 46 ing the growth of agriculture in the country, while inviting New Zealand companies to extend their investments in PNG.

48 PNG BUSINESS NEWS

principle of those who give freely, with heart.

“It is intrinsically Melanesian and Christian values that those who come to us with no obligation are those we hold as sincere and genuine friends,” said the Prime Minister.

The Prime Minister said because of Japan’s steadfastness in honouring the PNG-Japan partnership, Papua New Guinea would also honour its side of the bond in trade, commerce and investment with Japan; and further invited Japanese businesses to invest in PNG. He said, “PNG looks forward to our continued journey for modernization as we make progress from a raw-resource-rich export economy to the manufacturing economy in the next 20 years.

“We too look forward to continuing the trade and partnership with you, and in our own small way, contribute to peace and tolerance amidst various stresses we have in our shared Pacific Ocean.

“We look forward to standing in every forum to give Japan the needed support as the true friend of PNG

because of a friendship that you forged when we were not yet a nation.

“Today is a remarkable celebration. In 1974, you stepped out in faith and established a first partnership agreement (with PNG) even before we became independent. You were among the forerunners, working the frontier, preparing our country for Independence. Thank you very much,’’ said Prime Minister Marape.

He noted that Japan, in 1974, was still rebuilding its economy having come out of the great destruction of the World War II yet was still willing to give a hand to Papua New Guinea.

“In 1974, you were only about 30 years out of the great destruction of World War 2. But you taught the world the gains of tolerance, humility, forgiveness and kindness. You submitted to your adversary right after the war and you pursued economic progress for yourself.’’

The celebration of the 50th anniversary of Japan’s ODA to PNG was held at Hilton Hotel, attended by diplomats, government department representatives and various partners of the JICA.

The Prime Minister highlighted to Mr Zwart the country’s upcoming 50th Independence anniversary next year 2025, revealing that the Government was planning a special reconciliatory event for

Bougainville “to bring closure”, which, he said, New Zealand would have a special role to play in because of its continued involvement in the Bougainville peace process.

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PNG BUSINESS NEWS 49

BUSINESS

Agreement Reached to Develop Fully Integrated SEZ in Madang

T

he National Government, through the Ministry of International Trade and Investment, the Madang Provincial Government, and RD Corporation of the Philippines, have reached an agreement to initiate immediate feasibility studies for the proposed Madang Integrated Special Economic Zone (SEZ) in Vidar, Madang.

In recent discussions at the RD Corporation Headquarters in General Santos City, Philippines, the three parties committed to developing a fully integrated SEZ on 650 hectares of land owned by RD Corporation.

The SEZ will be modelled after the Java Integrated Industrial Port Estate ( JIIPE) in Indonesia.

Minister for International Trade and Investment, Hon. Richard Maru, stated: “This proposed integrated SEZ will include fish canneries, a fuel depot for all purse-seiners, cold storage, a slipway, a shipyard, and various associated businesses such as tin can manufacturing, a packaging factory, and aquatic feed production for aquaculture, including shrimp and inland fish farms.

“The SEZ will also feature a residential estate, shopping malls, schools, its own bank, and an international wharf. This wharf will serve as an alternative to Lae Port for the Highlands via the Baiyer-Madang Road, reducing freight costs by half due to the proximity of the new wharf compared to Lae Port.”

Minister Maru emphasised, “This SEZ is the highest priority for the National Government and the Madang Provincial Government.

It marks the beginning of Madang Town’s transformation into an industrial hub.”

During their two-day visit to General Santos City, Minister Maru and the Governor of Madang, Hon. Ramsey Pariwa, toured RD Corporation’s facilities, including their cannery, cold storage, packaging factory, aquaculture farm, and a state-of-theart shipyard complex equipped with floating dry docks and slipways.

50 PNG BUSINESS NEWS

The shipyard provides a full range of services, including ship repair and maintenance, and caters to both local and international clients, including the Philippine Navy.

The delegation also visited RD Corporation’s bank and hardware operations.

RD Corporation first built its vessel under the RD Fishing Group in 1984 and later expanded its fishing operations by acquiring other fishing companies. Today, it operates the largest and most modern fishing f leet in General Santos City, which is recognised as the Tuna Capital of the Philippines.

Minister Maru highlighted the significance of RD Corporation’s operations in Madang, stating: “What RD Corporation has established in Madang is just a fraction of what they have in General Santos City.

“The Marape-Rosso Government has made a sound commercial decision by partnering with RD Corporation, a well-established fishing company with extensive facilities, management expertise, and global industry networks. RD Corporation brings years of experience and an in-depth understanding of the global market.”

Minister Maru further stated, “Papua New Guinea (PNG) has missed signif icant opportunities over the past 49 years by being

merely a rent collector in the f isheries sector. We should have fully domesticated our f isheries industry, but we have not. As a result, 80% of our catch is taken overseas, and we have missed out on building additional canneries, losing 50,000 jobs.

“Our current net revenue is only K300 million a year, but we could be generating K5 billion in revenue.

We also lose out on landing fees, shipping licences, jobs, wages, income taxes, corporate taxes, GST, and local commercial opportunities linked to the fishing industry.”

He added, “PNG accounts for approximately 18% of the world’s tuna catch and controls around 15% of the global tuna trade, with an estimated value between USD$4 billion and USD$5 billion (K13.3 billion – K16.9 billion).

“However, the majority of this catch is rerouted at high seas and processed overseas, depriving PNG of significant benefits. The overall production output of PNG’s fisheries exports has remained steady at over K1 billion since 2016, but most of the revenue comes from resource rents.”

“The Government’s decision to partner with RD Corporation in the fisheries business is a bold step in transitioning PNG from a rent collector to a true Fishing State,” concluded Minister Maru.

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MINING

Kainantu Gold Mine Hits Record Production in Q3 By: ROSELYN EREHE

K

ainantu Gold Mine in Papua New Guinea has reported outstanding production results for the third quarter of 2024, achieving a record output of 44,304 ounces of gold equivalent (AuEq), which includes 41,702 ounces of gold, 1,278,492 pounds of copper, and 37,613 ounces of silver, according to K92 Mining Inc. John Lewins, K92 Chief Executive Of f icer and Director, stated: “As we guided to at the beginning of the year, 2H was expected to be the strongest, and it has certainly delivered thus far, with record ounces produced and sold, and record recoveries while benef iting from record gold prices in Q3.

“Importantly, the results have well positioned the Company to meet its 2024 Operational Guidance, while also delivering a notable strengthening to the Company’s f inancial position during the Stage 3 Expansion construction, which is very encouraging.”

The mine’s sales f igures were equally impressive, totaling 45,248 ounces of gold, 1,615,185 pounds of copper, and 46,062 ounces of silver.

With over 80 percent of its annual gold equivalent production guidance already met in the f irst nine months, the company is on track to achieve its 2024 target of 120,000 to 140,000 ounces AuEq. Lewins said: “In less than 9 months from now, the new Stage 3 Expansion Standalone Plant is scheduled to commence commissioning, marking a major milestone for K92 that has taken multiple years to reach, and it effectively represents the beginning of the Company becoming a Tier 1 Mid-Tier Producer.

“We are also excited to host an analyst and investor tour later this month, highlighting our progress across multiple areas, including current operations, the Stage 3 and 4 Expansions and exploration, while also showcasing the advantages of operating in the mining friendly jurisdiction of Papua New Guinea.”

52 PNG BUSINESS NEWS

During the quarter, the processing plant handled 104,992 tonnes of material, with a gold equivalent head grade averaging 13.8 grams per tonne, the highest since Q4 2020.

This increase was driven by the mining of higher-grade stopes that had initially been scheduled for the previous quarter, the company said.

The mine’s throughput was intentionally reduced to optimize recoveries at this elevated feed grade, K92 said. Notably, metallurgical recoveries also reached new heights, with gold averaging 95.3% and copper at 95.1% for the quarter, surpassing recovery expectations.

The mining operations saw substantial activity, with 112,333 tonnes of ore extracted across nine levels, including signif icant areas at Kora and Judd, Lewins noted.

The quarter also marked the completion of a 5-metre diameter raise bore for interim ventilation improvements, alongside the successful execution of several smaller raises.

K92 anticipates a signif icant

increase in development rates as it completes multiple infrastructure projects and enhances its mining capabilities with the introduction of additional equipment and initiatives aimed at boosting productivity.

PNG Mineral Resources Authority (MR A) Managing Director Mr Jerry Garry, while giving an update on the mining sector to PNG Business News, commented on K92’s production.

He said: “On track to meet the annual production forecast of 120,000 to 140,000 ounces gold equivalent.”

Garry said this will provide much needed f inancing for the construction of its Stage 3 Expansion, which will produce about 450,000 ounces of gold equivalent annum, comparable to Porgera miners’ annual production of 500,000 ounces per annum.

“This is indeed another sterling performance from K92 mine, and we highly commend their entire team,” he added.

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MINING

Mayur Secures 10-Year Exclusive Premium Quicklime Supply Strategic Alliance

M

ayur Resources Limited is pleased to announce the signing of a 10-year exclusive Strategic Alliance Agreement (Strategic Alliance) with Guangxi Zhongzi New Materials Co. Limited, a privately owned large-scale Quicklime and Limestone producer operating primarily in China. This agreement provides Mayur with immediate access to superior quality lime products, similar to what will be produced by Mayur’s Central Lime Project (CLP) in the future.

STRATEGIC ALLIANCE BENEFITS The Strategic Alliance allows Mayur to immediately lead the branding, marketing, sales, and distribution of Superior Quicklime across Australia and the Pacific with Mayur’s Premium Grade (Typical CaO 92-94%) and Premium+ Grade (Typical CaO 94-96%) Quicklime products. This offers superior quality compared to Australian domestic production and imports from Malaysia and Thailand.

This positions Mayur as the leader in providing high-quality Quicklime to these markets.

LONG-TERM COMPLEMENT TO MAYUR’S OWN PRODUCTION The agreement not only facilitates immediate sales but also complements

54 PNG BUSINESS NEWS

Mayur’s long-term plans. Once operational, Mayur’s CLP will initially bring an additional 400,000 tonnes per annum of Quick Lime supply online, with immediate plans of expansion beyond two kilns shortly thereafter.

One of the key advantages of this agreement is the guaranteed backup contingency, multi-jurisdiction supply source. Customers can have full confidence that Mayur will provide consistent access to superior Quicklime from multiple jurisdictions, ensuring reliability and supply chain security, all managed through a single, integrated organisation. This multi-jurisdictional sourcing strategy ensures that Mayur can deliver superior Quicklime quality consistently, regardless of market conditions.

STRENGTHENED SUPPLY CHAIN AND LOGISTICS Our Partner operates several major production facilities across China, with a current capacity of 2 million tonnes per annum of Premium Quicklime. Ongoing expansion projects, including new Quicklime plants and enhanced logistical infrastructure such as a railhead with direct access to seaports, will further improve the efficiency and reliability of supply to Mayur’s customers. Combined with Mayur’s own international wharf facilities under construction, this creates a

robust and seamless supply chain.

IMMEDIATE ACCESS AND CUSTOMER CONFIDENCE This Strategic Alliance enables Mayur to offer its customers immediate access to a more diversified product range, with Mayur’s Premium and Premium+ Grade Quicklime products, while providing the assurance of a long-term, secure, and reliable supply once Mayur’s CLP is in production. The superior quality of Mayur’s product offering, combined with a diversified supply base, positions the company to meet the growing demands of the Australian and Pacific markets.

With this collaboration, Mayur is uniquely positioned to deliver a comprehensive, customisable range of superior Quicklime products, tailored to specific market needs. The Strategic Alliance further aligns with Mayur’s strategy to expand its market presence across the Asia-Pacific region and demonstrates its commitment to providing the highest quality products and services.

Mayur will now commence broader engagement with the Quicklime market, providing samples and organising bulk trials. Further updates will be provided as Mayur progresses towards the first sales of Mayur-branded Premium Quicklime.

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PNG BUSINESS NEWS 55

MINING

Tolu Minerals Bags A$26.7M Placement for Gold Mine Development By: ROSELYN EREHE

T

olu Minerals Limited has announced a successful placement, raising A$26.7 million (Australian Dollars) from sophisticated and institutional investors at an issue price of A$0.80 per share.

In an exclusive interview, Tolu Minerals Managing Director and CEO Iain Macpherson told PNG Business News that this funding will significantly strengthen and accelerate the company’s ongoing efforts in exploration and redevelopment of the Tolukuma Gold Mine in the Goilala District of Central Province, Papua New Guinea (PNG).

The placement received strong demand from both new and existing investors, ref lecting confidence in Tolu’s strategy to leverage the historical infrastructure of the Tolukuma mine to not only grow a substantial Mineral Resource, but also to return the mine to high grade production, Macpherson said.

The proceeds from the placement will be allocated towards accelerating exploration activities, redeveloping the mine—which includes study work, mine development, and dewatering—and providing working capital to support operational costs, he added.

Macpherson said the placement was “a very pleasing outcome. I am also delighted with the ongoing support of a number of leading global institutional gold funds and existing shareholders.”

This placement enables Tolu Minerals Limited to accelerate both its regional and near mine exploration as well as to continue the rapid refurbishment of the mine “back into near term high-grade gold and silver production,” he said.

The CEO also provided insights to PNG Business News into preliminary findings from Phase 1 of the company’s Airborne Mobile Magneto Telluric (MT) survey, covering 723 km², including ML 104 and surrounding exploration licenses.

“The ongoing airborne survey is proving to be an invaluable tool in targeting future exploration and has already highlighted a number of near mine epithermal targets as well

56 PNG BUSINESS NEWS

Site preparation for the gravity plant at Tolukuma Gold mine.

The surface drilling that started TGM , targeting the Zine vein, at Tolukuma Gold mine.

as several regional targets,” he said.

The survey revealed advanced copper-gold porphyry and gold epithermal targets as a precursor to field work in preparation for drill testing. Based on reports, within ML 104, a significant conductivity irregularity shows an extension of minerals extending over 2 km south of the mine site, Macpherson said.

Furthermore, the Belavista target, located approximately 10 km west of Tolukuma, supports historical samples with high-grade readings, suggesting promising porphyry mineralization. The mineralized areas around Tolukuma are being prepared for immediate drill testing this year, he added.

The MT survey is continuing over Tolu’s other prospects and will ultimately provide a wealth of invaluable information “that will support the regional exploration not only for Tolu’s core target being epithermal structures and mineralisation, but also importantly copper-gold porphyry’s that represent an entirely different style of target,” the CEO said.

The ongoing airborne MT survey is also identifying potential exploration targets, having revealed several near-mine epithermal targets and regional prospects.

The survey, comparable to a successful initiative undertaken by another gold company, K92 in

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PNG BUSINESS NEWS 57

MINING

PNG Welcomes New Mining Minister Goi By: ROSELYN EREHE

P

apua New Guinea’s new Mining Minister, Hon. Wake Goi, was sworn in on September 25 at Government House in Port Moresby. Hon. Goi took over the role from Prime Minister James Marape, who had been f illing in as mining chief.

Marape expressed conf idence in Goi’s experience and qualif ications as the Member of Parliament for the Jimi electorate in Jiwaka Province and a member of the People’s Party of PNG. Following his appointment, Goi visited the Mining Haus in Port Moresby, where he was off icially welcomed by the Managing Director of the Mineral Resources Authority (MR A), Jerry Garry, along with his management team, staff, and party executives.

Mr. Garry highlighted the integrity, maturity, and experience that Goi brings to the Ministry.

He assured the Minister the MR A team has the expertise needed to support him in advancing the mining sector “to give you advice and appropriately position you and I, so that we can drive the industry forward.”

“The mining industr y is the largest contributor to the national purse, but it is also one of the

< Page 56 PNG, aims to uncover structures and mineralised zones extending beyond 1,000 meters in depth.

Macpherson said, “The survey is proving adept at identifying structures and mineralised zones, including both epithermal and porphyry style mineralization, to depths in excess of 1,000m below surface.”

“The survey will be continued over the coming weeks and I look forward to updating the market later this year with the outcomes of this work as well as providing a general update on progress. This survey work was instrumental in the value

58 PNG BUSINESS NEWS

Minister Goi addressing MRA management and staff in his recent visit in October to the Mining Haus in Port Moresby.

most challeng ing due to its complexities,” Garr y noted, g iv ing the Minister an over v iew of the MR A and the mining sector, including exports revenue statistics and the challenges faced by the sector.

In addressing the MR A staff, Goi encouraged strong cooperation between his off ice and theirs.

“It is the government’s wish to see that the country gets a fair share from the exploitation of its resources, and at the same time ensure that investors get returns on investments,” he said.

Goi said he would provide the

necessary political support and leadership to the MR A and the sector to ensure that all stakeholders are adequately serviced.

He encouraged strong cooperation between his off ice and the MR A to ensure the government’s agenda of “Take Back PNG” is realized, in which the country receives a fair share from its resources while also allowing investors to see returns on their investments.

After the formalities, the Minister was given a tour of the country’s Mineral Production Data Monitoring Hub and Data Repository.

creation path of fellow PNG gold company K92, which we aim to emulate.”

The company currently holds a strong f inancial position, with pro forma cash estimated at A$29.4 million before costs associated with the placement, Macpherson said. This robust cash position will support Tolu Minerals Limited ambitious plans to expedite both regional and near-mine exploration initiatives.

“This accelerator placement enables us to accelerate and add to our existing plans to accelerate exploration on some of those key targets with field work and ultimately with drilling. More than that though

it’s also about accelerating the return of the mine to production and being able to ramp up the production faster than we originally envisaged,” he added.

The placement details indicate that approximately 33.4 million new shares will be issued, utilizing the company’s available Listing Rule 7.1 and 7.1A capacity. The placement price represents a 60% premium over Tolu’s initial public offering price and a discount to its recent trading prices.

Stakeholders can anticipate further updates regarding the ongoing airborne survey and overall progress in the coming months, Macpherson said.

ISSUE 4, 2024 – www.pngbusinessnews.com

Building a stronger PNG together Local businesses play a critical role not just in the success of the PNG LNG Project, but also in the success of our communities and the whole economy.

This is why we are so proud to work with them and with landowner companies. They provide services ranging from road maintenance, construction works, and transportation, to catering, security, medical services, and waste management.

In 2023 alone, 131 PNG companies, including 10 landowner companies, supported us.

In fact, over the past decade, we have spent almost PGK6.8 billion with Papua New Guinean businesses, including PGK2.25 billion on landowner company services.

By engaging local businesses, we’re supporting their capacity building and helping them to become self-sustaining enterprises for years to come.

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PNG BUSINESS NEWS 59

MINING

PNG Mining Minister Outlines Priorities Before 2024 Ends By: ROSELYN EREHE

I

n an exclusive interview with PNG Business News, the newly appointed Minister for Mining, Hon. Wake Goi, shared his priorities, placing emphasis on transparency in regard to all mining deals done under his ministry.

“Any mining deals done under my ministry must be done with transparency,” he stated.

Minister Goi expressed enthusiasm for the challenges ahead, highlighting the importance of collaboration among the government, investors, and landowners.

His vision centers on creating a favorable environment for all parties involved, ensuring that everyone—especially investors, landowners and the government—benefits from a fair share of the resource development and commercialization, with open dialogue with stakeholders.

His statements follow discussions regarding the Wafi-Golpu project, a priority for the Marape-Rosso government, along with input from the electoral members and Governor for Morobe and the PNG Mineral Resources Authority (MRA).

With only two months left in 2024 and one parliament sitting remaining, Minister Goi outlined his top three priorities: 1. Appointment of a Board Chairman for the MRA – Hon. Goi underscored the urgency of filling this critical position to oversee budget approvals and ensure the governance oversight on the operations of the authority. This is important to ensure governance prudence within the State’s regulatory authority, he said.

2. Amendments to the Mining Act – The Minister indicated that some provisions of the Mining Act 1992 have been considered necessary for amendments after much consultation with the industry. Other critical aspects of the review such as the fiscal regime will be consulted with stakeholders and will be taken to NEC and tabled in Parliament.

3. Amendment of the Mining Safety Act 1977 – This law will now be changed to the Mining Health and Safety Act, Hon. Goi said, to reflect the inclusion and emphasis on mine employees health and safety, alongside the environment protection concern,

60 PNG BUSINESS NEWS

especially in mining regions. The minister emphasized the need for robust safety protocols to protect local communities and mining employees.

“I will do what I can under my capabilities by prioritizing,” he said.

Hon. Goi asserted that clear strategies and open communication are essential for effective crisis management and to prevent disputes among investors, landowners, and other stakeholders.

While he noted other important priorities, such as promoting alluvial mining and exploration in various regions, the minister stressed that these initiatives would be strategically implemented after the start of next year 2025.

He reiterated the significance of alluvial mining as a vital source of livelihood for many locals, stating, “We must protect and advance alluvial mining for our people, to be owned and operated solely by locals as per the amendment.”

Hon. Goi envisions providing better tools, training, and support for local miners, emphasizing collaboration with the Ministry of Commerce and Industry and other related departments and agencies.

Additionally, he aims to advance attempts to attract more exploration investments during his term, to PNG by fostering an environment that encourages exploration while responsibly managing associated risks. The minister is keen on increasing exploration licenses, but with a focus on sustainable resource management.

Recognizing PNG’s rich mineral resources and cultural-tribe diversity, he reiterated the importance of crisis management through transparency.

He said, “PNG’s clearly stands as a resource rich country, therefore we must apply all laws at all levels. Policy has to be implemented well.”

“I am determined to serve effectively throughout this term and beyond, creating a legacy that will benefit generations to come,” he added, reflecting his optimism about making a lasting impact.

“The mining industry is very exciting,” said Hon. Goi. “It keeps me busy and fuels my curiosity to learn more about everything from alluvial mining to deep-sea exploration.”

GOI LAUDS K92 RECORD PRODUCTION Hon. Goi also congratulated the K92 Mining Inc. for its remarkable performance at the Kainantu Gold Mine during the third quarter of 2024.

The mine reported record production figures in October, including 44,304 ounces of gold equivalent, underscoring the hard work and dedication of its employees.

The minister lauded the achievements of the K92 team, saying: “This outstanding production highlights the capabilities of our local workforce and also reinforces the importance of the mining sector in driving economic growth in Papua New Guinea.”

“The continuation of operations at Kainantu Gold Mine means more jobs for Papua New Guineans and provides a much-needed economic boost for our communities.”

Hon. Goi stressed the benefits of the continuation of the mine’s operation, which contributes significantly to the economy by paying corporate taxes, collected by the government as a primary source of income for the country.

These taxes help fund public services like education, healthcare, infrastructure, and social programs, benefiting the entire country, he said.

The tax revenue generated can also be reinvested into local infrastructure, improving roads, utilities, and public facilities, ultimately contributing to the overall growth of both the local community and the nation, Hon. Goi added.

The Minister emphasized that the success of the Kainantu Gold Mine places it firmly on the global map, further promoting the country as a resource-rich nation.

“As we celebrate these achievements, we also recognize the potential for future growth and investment in our mining industry,” Goi added.

“K92’s progress positions our country as a competitive player in the global mining sector.”

The minister reiterated his commitment to supporting the mining industry in the country, noting that responsible mining operations play a crucial role in the nation’s economic development.

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PNG BUSINESS NEWS

61

MINING

Garry Tells Alluvial Gold Miners to Diversify, Reinvest, Manage Better

A

lluvial gold miners in the country have the potential to become billionaires if they diversify their ventures, re-invest wisely, and manage their finances effectively, said Mineral Resources Authority Managing Director, Jerry Garry.

Mr Garry was speaking at the 6th Alluvial Mining Convention & Trade Show 2024 in Goroka, where over 300 miners, government regulatory agencies, gold buyers, exporters, financiers, and other relevant stakeholders gathered to share information, experiences, and discuss regulatory policies, among other topics.

The MD shared an inspiring story about how the former operator of the Porgera Mine, Placer Dome, had humble beginnings in the Wau-Bulolo gold fields in 1926. He explained that two expatriates—an Australian and a New Zealander—ventured into Wau-Bulolo in 1926, recognising the abundant gold resources in the area. The pair formed a company called Placer Development Proprietary Limited.

They raised funds, purchased eight dredge machines, and mined the Wau-Bulolo gold fields.

However, Mr Garry emphasised that these men did not limit themselves to gold mining; they diversified into other industries, including cattle farming, fishing, and forestry. The pine trees harvested today by PNG Forest Products in the Wau-Bulolo area were introduced by these two men as part of their business diversification efforts in 1926.

After more than 55 years, Placer Development Proprietary Limited acquired a mining licence to operate the Porgera mine. Some years later, the company merged with another, forming Placer Dome. By 2005, Placer Dome was operating about 16 gold mines across seven countries, with a market capitalisation of USD 6.7 billion.

Mr Garry reiterated that this successful company had its origins in alluvial gold mining at the Wau-Bulolo fields in 1926. He stressed that today’s alluvial gold

62 PNG BUSINESS NEWS

miners have the same potential to achieve billionaire status, much like those two men.

The MD also highlighted the economic significance of the alluvial mining sector, which at one point contributed around K640 million annually to the country’s economy.

Approximately 100,000 people are involved in the alluvial mining

sector nationwide.

The Alluvial Mining Convention, an initiative of the MR A, aims to promote and showcase the sector’s potential. It brings all stakeholders together on one platform to share experiences, discuss regulatory policies, and raise awareness about the latest challenges and success stories in the industry.

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PNG BUSINESS NEWS 63

MINING

Ok Tedi Marks 40 Years of Resilience and Excellence

O

k Tedi Mining Limited (OTML) is celebrating its 40th anniversary of operation, marking four decades of resilience and excellence in the mining industry in Papua New Guinea.

Starting in August 1984 as a gold mining operation by Broken Hill Property Limited (BHP), OTML transitioned to a copper-gold mine in 1987. From 2015 to present, OTML is a fully 100 per cent PNG owned mine.

OTML’s journey is characterized by both challenges and triumphs.

Throughout its history, OTML has demonstrated resilience in the face of adversity. These include: • Navigating two significant droughts in 1997 and 2015; • The volatility of the world market

64 PNG BUSINESS NEWS

and global gold and copper prices; • Legacy issues of its operations impact on the Ok Tedi and Fly River systems and the communities that depend on them; Despite these challenges OTML continues to remain resilient and has operated successfully by providing economic and social benefits to Western Province and Papua New Guinea over the last 40 years. They include: • K13.4 billion in Dividends; • K1.4 billion in Royalties; • K10.2 billion in Tax/Duties; • K1.6 billion in Compensation; • K1 billion in CMCA Payments; • K664 million in Tax Credit Scheme Projects; • Investing K146 million in educa-

tion and training of graduates, apprentices, trade trainees, and school and university scholarships.

• World class operational and environmental mitigation and monitoring measures.

OTML remains optimistic in continuing its operations for another 40 years. This is evident in the renewal of it’s Special Mine Lease (SML) to 2042 and the Company Boards in-principle agreement to extend mine life to 2050.

A series of events will be held in November to mark the 40th anniversary celebrations. These festivities will not only commemorate the past but also look forward to the future with optimism.

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PNG BUSINESS NEWS 65

MINING

OTML Donates K550,000 to UPNG’s Earth Sciences Division

O

k Tedi Mining Limited (OTML) has donated K550,000 to the University of Papua New Guinea’s (UPNG) Earth Sciences Division & Centre for Disaster Risk Reduction, upgrading the division’s Computer Laboratory for students and teaching staff.

The funds cover the purchase and installation of 28 desktops, seven laptops, and one uninterruptible power supply (UPS) device. Currently there are only six desktops that caters to the division’s 26 final-year students, 21 thirdyear students, and 20 second-year students.

Manager Mine Technical Services, James Bu, Manager Production Services, James Waisime, and Manager Corporate Affairs, Dexter Wagambie, attended the University’s Open Day on Friday October 11th to announce the donation.

Mr Wagambie said, “This donation complements OTML’s vision to create a sustainable future for our people, by positively impacting tertiary level students and mould them to be the workforce that we envision them to be in the future.”

OTML’s presence at the Open Day was also an opportunity for the three Manager’s to inspire students

66 PNG BUSINESS NEWS

(L to R) James Waisime, Associate Professor Joseph Espi, James Bu, Professor Lekshmi Pillai and Dexter Wagambie at the UPNG Campus.

eager to learn more about the mine’s operations, geological activities, and training programs.

The impact of OTML’s Graduate Development Scheme on the development of graduates and the benefits that the mine operation gains from these professionals over the years was highlighted.

“The GDS Program is all about building leaders in the industry.

The current Managing Director and Chief Executive Officer, Kedi Ilimbit, including Mr Bu, Mr Waisime, myself, and many other leaders in OTML are products of the GDS program,” Mr Wagambie said.

Head of the Earth Science Division Associate Professor Joseph Espi said, “Ok Tedi is an integral part of our vision to be the best because Ok Tedi is a nationally owned company and the largest open-pit mine in PNG right now with a 98% national workforce and national CEO. These are reasons enough to inspire our students excel in their chosen f ields of study.”

OTML is committed to maintaining an industry-institution relationship with key tertiary institutions, such as UPNG, to ensure they produce quality graduates that are ‘industry ready’.

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67

MINING

MRA, China Sign MOU for Geological Survey; Garry Stresses Need for Exploration By: ROSELYN EREHE

E

xploration is important for the future of Papua New Guinea’s mining sector, which plays a vital role in the nation’s growth.

Without continued exploration, the country will face a decline in mining activity, said Papua New Guinea Mineral Resources Authority Managing Director Jerry Garry.

“And if there is no exploration, there will be no mining in this country,” Garry said at a signing event on November 14th with a Chinese mining agency at the Mining Haus in Port Moresby.

He explained that the country faces a significant gap in junior exploration companies, a trend that has been on the decline for over 15 years -- worsened by the global mining sector’s focus on advanced projects and mergers rather than exploration in potential locations in the country.

“If we do not invest in exploration, we risk running out of new mining projects,” the MRA chief said.

Garry emphasised the importance of expanding exploration efforts and partnering with countries like China, which possesses advanced technology and expertise.

This was highlighted during the signing of a five-year Memorandum of Understanding (MOU) between the MRA Geological Survey and the China Geological Survey from 2025 to 2030, witnessed by Dr. Wang Tiangang of the latter’s Institute of Geology and Minerals.

The MOU will involve two main components. The first is a geoscience survey, which includes geochemical mapping, soil and rock sampling, and the use of remote sensing techniques in certain areas.

The second component focuses on capacity building for the MR A, with opportunities for MR A geoscientists to attend universities in China for advanced degrees (Masters and Doctorates).

“This partnership with China provides an opportunity to generate new data that could attract new exploration companies and potentially uncover new mineral deposits in PNG,” Garry added.

68 PNG BUSINESS NEWS

Mr. Gabriel Kuna, MRA Officer in Charge (OIC) Geological Survey Division, was also present to witness the signing.

The MOU aims to facilitate collaboration in geological research and scientific data analysis, providing a framework for the exchange of technical knowledge and enhancing geoscientific research capabilities, and is a follow-up to the initial MOU signed in 2012.

The key activities under the MOU will depend on the financial and human resources available to both parties. Other potential areas of collaboration include: 1. Exchange of scientific and technical information 2. Research visits and knowledge sharing 3. Joint projects and subject studies in areas of mutual interest 4. Training of research fellows for joint projects 5. Joint workshops, conferences, and lectures 6. Other mutually agreed forms of cooperation Following the signing, the two parties will begin conducting geological surveys throughout PNG. The data collected will be added to the country’s geological map, which is marketed to investors globally. This will help further promote PNG as a mineral-rich nation with proven resources.

China is recognized for its cutting-edge geoscience technology and innovation, and Garry emphasized that this partnership offers PNG a unique opportunity to learn from Chinese expertise Explaining the processes, Kuna said: “We will also be collecting soil samples and rock samples here in PNG. Some of those will be taken up to China.”

MR A will share the knowledge and experience gained from this collaboration with other agencies and government departments across PNG. The goal is to eventually expand the geoscientific research efforts to cover the entire country, he added.

Garry said since the onset of the COVID-19 pandemic, many international partners providing technical support to the MRA had been lost.

However, the MRA has since secured new collaborations, including a partnership with other country governments focused on capacity building in the Geological Survey Division, the only scientific arm of the government “responsible for collecting and providing new scientific data for the development of our country,” Garry said.

“Given the rugged and inaccessible terrain of PNG, collecting such data is challenging and costly. This collaboration will help us keep up with global technological advancements, which is crucial for enhancing our understanding of geology and mineral deposits in the country.”

Garry expressed his gratitude to Dr. Wang and the China Geological Survey for their commitment to the partnership.

“Such collaborations like this will put new scientific data on the table that may entice new players into the country. And hopefully we can be able to generate interest and a new scientific understanding that may unravel some of the new deposits within the country,” he said.

Dr. Wang, on behalf of his superiors and team, expressed his excitement about the collaboration and the opportunities it presents for both countries. “I take this opportunity to say thank you and look forward to our cooperation,” he said.

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PNG BUSINESS NEWS 69

OIL & GAS

KPHL Hosts Successful Energy Conference By: ROSELYN EREHE

T

his year’s Petroleum and Energy Conference (PEC) attracted an impressive 580 delegates from around the world to Papua New Guinea (PNG), which is the highest attendance to date.

The Managing Director for Kumul Petroleum Holdings Limited, Mr. Wapu Sonk, expressed optimism for future events, stating: “I look forward to a better and bigger event next year, with more exciting projects.”

Mr Sonk highlighted the importance of the conference as a platform for networking, idea sharing, and collaboration aimed at enhancing the sustainability and success of the oil, gas, and energy industry in the country.

The conference featured a comprehensive range of discussions, covering topics from green energy to regulatory frameworks, marking a significant step in the evolution of the energy sector.

Mr Sonk reflected on the event’s origins in 2016, noting its focus on petroleum and energy discussions distinct from mineral topics.

70 PNG BUSINESS NEWS

He pointed out that this focused approach led to meaningful changes, including the establishment of the National Energy Authority (NEA) and the deregulation of PNG Power, allowing for more competitive practices in the industry.

“This event started in 2016, and we had a break in between because of COVID, and this is the sixth edition of the conference. I have to say that I’m proud of the conference. It has achieved a lot, basically.”

“The progress we have made has transformed the energy landscape,” Mr Sonk said, noting the importance of building trust between the government and investors and the need for balanced relationships to ensure mutual benefits for both the country and the industry.

“Without your support, we would not have had a successful two-day event,” he said, thanking sponsors for their vital contributions.

Mr Sonk acknowledged the presence of Prime Minister James Marape and various ministers, including Minister for Energy Thomas Opa.

Minister Opa expressed appreciation on behalf of the Marape-Rosso government and the Department of Energy for the efforts of Kumul Petroleum Holdings Limited (KPHL) in organizing the event, highlighting its role as a vital platform for industry collaboration.

MP Opa, who joined MD Sonk and PM Marape on stage, reinforced the government’s dedication to licensing new energy projects.

He said: “In the next 12 months, we would like to come back and say we have covered another 20 or so districts in the MPP through licensing.”

Sharing similar sentiments, Prime Minister Marape shared ambitious plans for the energy sector, which aims to expand access to electricity in rural areas by 2030.

“We want to reach out to about 70% of public unions in the rural areas,” he said, as the conference concluded with a strong message of collaboration and investment potential in PNG’s energy sector, reflecting the government’s ongoing commitment to it.

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PNG BUSINESS NEWS

71

OIL & GAS

Santos CEO Gallagher: PNG LNG Project ‘World-Class Asset’ By: ROSELYN EREHE

S

antos CEO Mr. Kevin Gallagher recently called Papua New Guinea’s Liquefied Natural Gas (PNG LNG) project a “world-class asset” that boasts a lowcost, low-emissions intensity profile.

He told PNG Business News that the project continues to deliver reliable LNG supply to key markets in Asia, reinforcing its vital role in the global energy landscape.

“PNG LNG remains a world-class asset that is low-cost, low-emissions intensity and delivers reliable LNG supply to our customers in Asia,” Mr. Gallagher said.

He made this comment following Santos’ successful completed sale of a 2.6-percent interest in the PNG LNG project to Kumul Petroleum Holdings Limited on November 4th, which highlights the continued growth and potential of one of the country’s most significant energy assets.

Mr. Gallagher also pointed to the favorable regulatory framework surrounding PNG LNG, which ensures stability and continued investment in the sector.

The project is expected to generate significant economic returns for both domestic and international stakeholders, making it an essential driver of growth for the nation’s economy.

“The project is positioned in a supportive regulatory environment, with fiscal stability arrangements in place ensuring that it contributes strong cash f lows to project participants and delivers significant economic and social benefits to the nation,” he said.

“The finalisation of Kumul’s participation in PNG LNG is an important milestone for the country’s national petroleum and energy company.”

The transaction marks an important milestone for K PHL, and with this acquisition, the company solidif ies its position as a key stakeholder in the lucrative PNG LNG venture.

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PNG BUSINESS NEWS 73

OIL & GAS

PEC 2024: PM Marape Welcomes Investors By: ROSELYN EREHE

P

rime Minister James Marape invited international investors and energy experts to collaborate with Papua New Guinea (PNG) in harnessing its diverse energy resources, including hydro, geothermal, and solar power, during his keynote address at the opening of the 2024 Petroleum and Energy Conference at the Hilton Hotel in Port Moresby.

“We offer strong incentives and protections for investors,” Marape assured attendees. “Your investments in our cleaner energy solutions will not only yield returns but contribute to a sustainable future.”

He emphasized the strategic advantages of PNG’s location, being closer to Asian markets, and noted the nation’s vast forests provide a unique opportunity for environmentally-conscious investments, helping to offset carbon footprints.

Marape’s address comes amid a global trend of increasing coal consumption, particularly in Asia, where he urged stakeholders to prioritize environmental stewardship.

He highlighted PNG’s carbon-negative status, noting the country’s extensive forest resources capable of absorbing over 100 million metric tons of carbon.

Marape also expressed gratitude to Kumul Petroleum, ExxonMobil, and all sponsors for enabling this platform for contemporary energy discussions with a PNG focus.

“I’m honored to open this significant conference, focusing on the critical issue of energy and its impact on our planet, as well as what PNG is doing to regulate and promote the energy sector,” he stated.

He called for action against climate change, particularly in the Pacific Region, which faces significant risks despite its minimal carbon footprint, and reiterated PNG’s commitment to leading the change in clean energy production.

“I want to bring the spotlight on the production of heavy carbon-filled fossil fuels, especially coal. It is hard to believe that in this modern age of space travel and superspeed technology, the world is still burning coal,” he remarked.

“Coal accounts for the largest share of electricity production

74 PNG BUSINESS NEWS

worldwide, with gas coming in second. In Asia, economic growth and high populations have led to an unparalleled reliance on coal.”

Marape referenced reports from the International Energy Agency, which have highlighted alarming trends in coal consumption.

Figures from 2020 to 2023 reveal that China accounts for a massive 50.5 percent of global coal consumption, followed by India at 11.3 percent, the United States at 8.5 percent, Germany at 3 percent, and South Africa at 2.4 percent, with Poland, Australia, and Brazil also noted.

Recognizing the harmful effects of coal and other heavy carbon fossil fuels, Marape emphasized PNG’s determination to pivot towards sustainable energy solutions.

“PNG is getting our house in order to ‘think globally and act locally’… Our own carbon footprint remains under 10 million metric tonnes, and despite the high cost of energy, we choose to differ now and into the future. We want to remain a clean green country and we want to make and lead this transition to clean energy.”

“I firmly believe that liquefied natural gas (LNG) is the best energy source for transition between now and life after 2050, if we are to keep Mother Earth. LNG is

cleaner, more efficient, and aligns with our goal of reducing carbon emissions.”

“Our liquefied natural gas serves as a crucial transitional energy source, offering a cleaner alternative as we move toward a future powered by renewable energies,” he added.

Stakeholders from the business, industrial, and mineral sectors engaged in discussions focused on the development of PNG’s energy landscape, with an emphasis on securing a stable and sustainable energy future.

Marape reaffirmed his government’s commitment to facilitating a secure investment environment while leading the transition away from heavy fossil fuels towards a greener economy.

PEC 2024 is the only industry-specific conference focusing solely on the petroleum and energy sector. This sector is a major contributor to PNG’s economic growth, and the event offered a unique platform for ministry officials, industry leaders, resource owners, innovators, and charitable organizations to unite and shape the future of PNG’s energy sector.

Discussions included new policies, upcoming projects, and announcements in the petroleum and energy sector.

PNG Prime Minister Hon. James Marape speaking at the PEC2024 opening at Hilton Hotel. Port Moresby. - image supplied P.Ms dept.

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OIL & GAS

Santos Sells 2.6% of PNG LNG to KPHL By: ROSELYN EREHE

S

antos has completed its sale of a 2.6% interest in the Papua New Guinea Liquef ied Natural Gas (PNG LNG) project to Kumul Petroleum Holdings Limited (K PHL). The transaction, f irst announced on 29 December 2023 and detailed on 1 February 2024, was completed on 4 November 2024 and is worth US$602 million in cash (2.43 billion kina).

In addition, Kumul will assume approximately US$90 million (363 million kina) of existing project f inance debt associated with the sale interest. Effective 4 November, Santos’ working interest in PNG LNG is 39.9 per cent.

Santos reaff irmed its 2024 market guidance, stating there is no change to it this year. Managing director Kevin Gallaher and K PHL managing director Wapu Sonk conf irmed the equity sale on the same day.

Mr. Sonk also said that under its agreement with Santos, K PHL made a partial payment of US$352 million (1.42 billion kina) earlier this year, with the balance due by December 2024.

“We have just completed this share acquisition, well before the end of the year,” he added.

The acquisition increases K PHL’s stake in PNG LNG to 19.2%, including the 4.27% Kroton Equity Option shareholding, held for benef iciaries who are impacted provincial governments and landowner groups.

“Kumul Petroleum having an increased shareholding in the PNG LNG Project is clearly of great benef it to the company and

< Page 74

the country,” Mr Sonk said. “The project will be fully depreciated by end of 2024 and project f inance fully repaid by 2026, which means this additional equity is expected to provide high returns immediately and strengthen K PHL’s balance sheet.”

Mr Sonk said this increased equity will enable KPHL to expand its role in the country’s energy sector.

“For K PHL, the higher income from the PNG LNG Project means more ability for us to play a greater role in the country’s petroleum and energy sector as well as our ongoing support for nation-building development projects that will improve the lives of all Papua New Guineans,” he added.

In discussing K PHL’s future plans, Sonk said: “This acquisition positions the company to prepare to take up its mandated 22.5% equity in the forthcoming Papua LNG Project, whose FID is expected in late 2025, as well as other activities that the company continues to pursue.”

KPHL FINALISES LNG FORWARD SALE WITH CHEVRON On the same day, K PHL also completed a forward sale agreement with Chevron USA Inc. (Singapore Branch) to support K PHL’s acquisition of additional equity in PNG LNG. As part of the deal, Chevron will make an advance payment to K PHL in exchange for LNG and condensate cargoes over the next two years.

Sonk explained: “KPHL made a partial payment to Santos earlier

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DAY 1 SESSIONS INCLUDED:

DAY 2 SESSIONS INCLUDED:

1. The Global Picture – Supply and Demand 2. PNG Hydrocarbon Projects 3. Exploration and Stranded Field Development 4. Value Maximization & Fiscal

1. Energy Project Financing 2. Electrification in PNG 3. Industry Services Providers – Renewable Resources: Global Perspective, Technology, and Innovation

76 PNG BUSINESS NEWS

this year with the balance to be paid by December 2024. Following an extensive bid process with major trading, utility and other entities to source funding, we selected Chevron’s forward sales agreement.”

This agreement follows K PHL’s successful participation in the spot market, where it sold four LNG cargoes in 2024. Sonk emphasized the deal with Chevron will provide more security for K PHL as it continues to grow its energy portfolio.

“We appreciate Chevron being able to f inalise this deal. This agreement advances PNG’s hydrocarbon business, where we believe there is signif icant potential in LNG and related energy businesses, including carbon offset possibilities. We look forward to working with Chevron in the future,” he said.

(L-R) Santos managing director Kevin Gallaher and KPHL managing director Wapu Sonk confirm the equity sale. Image supplied KPHL

4. Decarbonization & Energy Switch 5. Roundup - Petroleum & Energy in Transition.

The conference featured 41 official speakers over two days and 48 exhibitors. PNG Business News served as the official media partner of the event, also showcasing a booth during the conference.

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PNG BUSINESS NEWS 77

OIL & GAS

ExxonMobil: PNG Well-Positioned for Future Regional LNG Demand

E

xxonMobil Senior Vice President of Global LNG, Mr. Peter Clarke, recently shared his insights on the success of Papua New Guinea’s liquef ied natural gas industry and the bright opportunities ahead as a keynote speaker at Kumul Petroleum Holding Limited’s Petroleum and Energy Conference held in Port Moresby.

“Papua New Guinea is truly well-positioned for the future -- one where LNG will have an even larger presence in the global energy mix,” said Mr. Clarke.

“With proximity to market and high-quality resources, PNG can continue supporting regional demand for decades to come, with Asia Pacif ic countries set to be core natural gas customers, and in the process help these countries meet their energy security and emissions reduction goals,” he added.

Through the PNG LNG Project, Papua New Guinea has demonstrated the ability to deliver reliable supply to customers, Clarke said.

“When the f irst shipment of Papua New Guinea’s LNG set sail on the ‘Spirit of Hela’ to Japan in 2014, and PNG entered an esteemed club of LNG exporting nations, no one could have foretold what the future would bring.

But with the benef it of 10 years of hindsight, I can conf idently say that through the strength of our partnerships, we have exceeded all expectations -- and together, we have f irmly established Papua New Guinea’s global reputation for excellence in the LNG industry,” Clarke said.

“In just its f irst decade of operations, the PNG LNG Project has generated tens of thousands of jobs and strengthened PNG’s economy. It has engaged 155 local businesses, including 10 L A NCOs in the production phase, and invested 6.8 billion k ina in PNG with these businesses,” Clarke said.

“A nd along the way, we have helped to deliver more than 27

78 PNG BUSINESS NEWS

billion k ina back to the State of Papua New Guinea and its people.”

ExxonMobil and its co-venturers’ investments in the country continue today, with multiple works currently underway to bring new volumes online and further strengthen PNG LNG’s production levels, Clarke said.

“We are also pleased to announce that the P’nyang LNG co-venturers are currently progressing its concept evaluation phase. This phase is critical to ensure that the design to develop this proven 4.6 TCF resource is as capitally eff icient as possible which is particularly important

given P’nyang’s remote location,” he added.

“Thanks to our close partnerships with the national and prov incial and governments, our co-venturers including Mineral Resource Development Company and Kumul Petroleum Holdings Limited, TotalEnerg ies, Santos and J X Nippon, our L A NCOs, local communities and landowner leaders and other business partners -- we are incredibly excited for LNG’s next decade and beyond in Papua New Guinea,” he added.

“Together, we have built a resilient, successful and globally respected LNG industry in PNG.” ISSUE 4, 2024 – www.pngbusinessnews.com

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PNG BUSINESS NEWS 79

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81

OIL & GAS

Kumul Petroleum Signs FLNG Pre-FEED Contract

O

n the sidelines of the 2024 Petroleum & Energy Conference today, Kumul Petroleum Holdings Limited Managing director, Wapu Sonk signed a Pre-Front-End Engineering & Development (FEED) contract for a Floating LNG (FLNG) facility in the Gulf of Papua, in PNG. Mr Sonk announced that this important contract had been awarded to Shanghai Wison Offshore & Marine Company Ltd. Mr Damien Nguyen, the Chief Technical Off icer (CTO), who signed on behalf of the company said Wison is delighted to work closely with Kumul Petroleum in its ambitious plan to commercialise gas f ields in Papua New Guinea.

“Kumul Petroleum Holdings Limited has for some time been investigating how to commercialise stranded gas resources, particularly those in our Petroleum Retention Licenses (PRLs 47 &50) over the

82 PNG BUSINESS NEWS

Pandora and Uramu gas fields, offshore of Gulf Province,” “This is a critical step and in the right direction, one we are extremely excited about as the National Petroleum Company,” Mr Sonk said.

“KPHL has evaluated these gas discoveries and completed reserve certification, which has given us confidence to move to this stage of the commercialisation plan.”

“KPHL is 100% license holder of the two PRL offshore licenses at the moment and intends to farm down

post this study to interested partners who see value in the 1.5mtpa FLNG project in PNG.” “This pre-FEED study is a necessary step to ensure that we understand the full scope, cost, schedule, risk and the full economic value before making a decision on moving to FEED and Final Investment Decision. The pre-FEED study is expected to take 8-12 months, leading to entry of FEED thereafter, and FID sometime in 2026 or 2027.

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OIL & GAS

Marape Meets with State Negotiating Team, Twinza to Advance Pasca A Gas Project

P

rime Minister Hon. James Marape announced that discussions on the Pasca A Gas Project, which aims to develop the Pasca A gas-condensate field located approximately 95km offshore from Gulf Province, are progressing well.

The announcement followed a meeting between the Prime Minister, the State Negotiating Team (SNT), and representatives of Twinza, the developer of the project.

The Pasca A Gas Project is expected to contribute over K30 billion to the economy and K15 billion directly to the country over the life of the project.

The development is being pursued in partnership with the Mineral Resources Development Company (MRDC) through a 50-50 Joint Venture.

“I met today with the SNT Chairman Dairi Vele and representatives of Twinza. The project is at a stage where we are progressing towards the Petroleum Retention

84 PNG BUSINESS NEWS

License (PRL). This will be followed by the Gas Agreement (GA), Final Investment Decision (FID), and finally the Petroleum Development License (PDL),” Prime Minister Marape said.

“Although there have been some delays, we all agreed that Pasca is part of the four ‘Ps’ of the Marape Rosso Government – Porgera Gold Mine, Papua LNG, P’nyang LNG, and Pasca A Gas Project. The SNT and Twinza are in very advanced discussions.

“We envisage that before we go to the 2024 Papua New Guinea Investment Week in Sydney, Australia, in December, we should have advanced the Pasca A Gas Project into a stage where it gives confidence to our investors.”

Marape reaffirmed the government’s stance on securing benefits of above 55 per cent for all major resource projects.

He further mentioned that during his upcoming visit to the United Nations General Assembly (UNGA) in New York, he will meet with the

leadership of ExxonMobil to discuss the PNG LNG Project, Papua LNG, and P’nyang LNG, with the aim of synchronising these major projects.

“Bearing in mind that Papua LNG has been slightly delayed, I want all the other projects to move, and there must be no more delays, especially on P’nyang,” the Prime Minister added.

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OIL & GAS

Santos Signs Mid-Term LNG Supply Contract

S

antos has announced the signing of a mid-term LNG supply contract with TotalEnergies Gas & Power Asia Private Limited (TotalEnergies).

The contract entails the supply of 20 LNG cargoes, or up to approximately 0.5 million tonnes of LNG per annum, over a period of three years plus one quarter. The contract will commence in Q4 2025, with LNG being supplied from Santos’ global portfolio of world-class LNG assets on a delivered ex-ship basis.

Santos Managing Director and Chief Executive Officer Kevin Gallagher said the contract with TotalEnergies marks a new LNG relationship for Santos, building on its existing joint venture partnerships.

“This oil-indexed contract, along with the recently executed long-term LNG Sales and Purchase Agreement with Hokkaido Gas in Japan and the mid-term contract with Glencore, demonstrates Santos’ strong LNG portfolio position and customer relationships in the region. Our portfolio

86 PNG BUSINESS NEWS

is well-balanced over the short to medium term, with around eighty percent of volumes indexed to oil prices and about twenty percent exposed to spot pricing,” Gallagher said.

“There continues to be extremely strong demand in Asia for high-heating-value LNG from projects such as

Barossa and PNG LNG, as countries focus on reducing their carbon emissions. Santos is committed to supporting the energy security of our valued customers across Asia, where gas will play a crucial role in decarbonisation efforts throughout the region,” Gallagher added.

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PNG BUSINESS NEWS 87

OIL & GAS

Ensuring Fuel System Integrity: The Future of Leak Detection with Acoustic Technology

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n the rapidly changing field of fuel management, maintaining the integrity of your fuelling system is crucial. Leaks compromise fuel quality, pose significant environmental risks and lead to costly operational disruptions. Our acoustic leak detection method is a highly effective, revolutionary solution for maintaining and securing fuel infrastructures.

IMPORTANCE OF CONTROLLING LEAKS Ensuring there are no leaks in your fuelling system is crucial for several reasons: • Preventing fuel from being contaminated with water guarantees the delivery of high-quality fuel to consumers • Avoiding pollution and potential shutdowns safeguards the environment and your business operations • Maintaining the overall integrity and functionality of your fuelling system is essential for smooth operations and long-term sustainability • Adhering to regulatory standards helps you to avoid legal repercussions and fines • Demonstrating a commitment to safety and reliability protects your brand’s reputation

ACOUSTIC LEAK DETECTION PROCESS The process begins with meticulous preparation to ensure accurate results. All tank-related activities, including fuel delivery and filling, are suspended. We ensure that all openings and gaps, including the filling line, vent, and suction lines, are securely closed to create a controlled testing environment.

Once preparation is complete, a specially designed coupler, which holds two sensors, is used to facilitate vacuum application. One sensor is placed within the liquid in the tank, while another is positioned in the air space above the liquid. This dual-sensor setup allows for comprehensive monitoring.

The background noise level inside the tank is measured and recorded to establish a reference value.

A vacuum is then used to create a controlled environment, essential

88 PNG BUSINESS NEWS

for accurate leak detection. The background noise level is measured again, allowing for precise comparison of the noise level before and after the vacuum was applied. Significant discrepancies between the reference background and post-vacuum noise levels may indicate potential leaks.

All readings are meticulously documented, and an inspection report is generated and printed on-site for immediate review.

WHY CHOOSE SGS’S ACOUSTIC LEAK DETECTION METHOD? More than 90% of leaks stem from accessories, fittings and joints, rather than the tank itself, and 95% of these leaks can be easily repaired by qualified pipefitters. This highlights the importance of comprehensive system checks and the efficiency of the acoustic method in identifying even the most minor vulnerabilities.

Widely recognized and approved, our acoustic method for leak detection is trustworthy and reliable, with many advantages: • It can be used to detect even the most minor leaks, providing you with a thorough assessment of your fuelling system • The tank and associated pipes can be evaluated without being disconnected, streamlining the process • Tests can be conducted with the tank containing fuel at between 10% and 90% capacity, minimizing operational disruptions.

• Fast, dependable results, along with onsite report generation and replay capabilities ensure accurate, thorough and dependable results and facilitate quick decision-making The acoustic leak detection method is a game-changer in fuel system maintenance. Its precision in detecting even the tiniest leaks ensures your entire system’s integrity, from the tank to the piping, and allows you to invest in the future of your fuelling infrastructure by prioritizing safety, efficiency and reliability.

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PNG BUSINESS NEWS 89

AGRICULTURE

Marape Announces $1.2-B Agro-Forestry Project in Western Province By: ROSELYN EREHE

P

apua New Guinea Prime Minister James Marape announced the launch of a “transformative” $1.2 billion (4.8 billion kina) agro-forestry project aimed at boosting the economy and infrastructure of the remote midlands of Western Province.

During a press conference, PM Marape outlined key features of the project, which promises to enhance connectivity and generate substantial employment opportunities in the region and the country.

The conference followed the signing of the GRE Drimgas Project in Western Province at the Government House on October 29th in Port Moresby.

The project will facilitate the construction of over 300 kilometers of sealed roads and an additional 300 kilometers of all-weather roads connecting Kiunga to Nomad, extending towards the borders of Gulf Province. Plans include further expansion of this highway to Kikori in the future, the Prime Minister said.

“This initiative is not just about road construction; it’s about processing and sustainable development,” Marape stated.

“Logs harvested from this corridor will be processed within Papua New Guinea by 2028 at a facility located in the deep-water area of Strickland River.”

The project, being developed by Italian investors, is set to process timber for export to European markets.

Landowners will receive 10% equity in the venture, along with log levies and royalties, benefiting directly from the project’s success.

Additionally, the provincial government of Western Province and the national government will each hold 5% equity stakes. After 25 years, the equity share for PNG beneficiaries will increase to 51%, ensuring greater local ownership and control.

The initiative is projected to create over 3,000 direct jobs, along with numerous indirect employment opportunities through various spinoffs. It emphasizes environmental compliance, adhering to national standards, and includes a five-year project review clause to monitor compliance.

“The state will not invest money but will provide necessary regulatory sup-

90 PNG BUSINESS NEWS

port, allowing the investors to take the lead in developing the project,” Marape explained.

In addition to the agro-forestry initiative, the Prime Minister highlighted the government’s plans to diversify agricultural production across the country. This includes the development of oil palm, rice, cattle, and coffee industries, as well as the expansion of cocoa

and copra production.

Marape also called on provincial governors from peaceful regions to seek out investors, assuring them of government facilitation.

“This is just the beginning. Our government is committed to unlocking the potential of our natural resources while ensuring sustainable practices,” Marape added.

ISSUE 4, 2024 – www.pngbusinessnews.com

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PNG BUSINESS NEWS

91

ENERGY

PNG Pushes Nature-Based Solutions for Climate Resilience at PEC 2024 By: ROSELYN EREHE

T

he government has reiterated its ambition to achieve carbon neutrality by 2050, with an interim target of a 50-percent reduction by 2030, at the recent Petroleum and Energy Conference 2024.

Recent reports indicate progress, particularly in the agriculture, forestry, and other land use sectors, which have successfully met initial CO2 reduction targets.

Papua New Guinea (PNG) Climate Change Development Authority (CCDA) Acting Managing Director Debra Sungi highlighted the collaborative efforts between the agency, the PNG Forest Authority, and National Energy Authority to advance these objectives.

Sungi said: “In our recent bi-annual update report, which we’ve submitted off to the United Nations Framework Convention on Climate Change, we have reached our target under the agriculture, forestry, and other land use, which is of 10,000 gigagrams of CO2 equivalent with zero debt in our recent findings.

“That is a positive step that the government have actually taken together with you all in terms of ensuring that we work together in a more sustainable way.

“Those targets are very specific for our agriculture, forestry, and other land use. And that is from our enhanced NDC, which was done back in 2020. We are in 2024, almost halfway through 2030.

“It’s a 10-year target. It is a positive milestones which we have achieved together,” she added Speaking at PEC24, Sungi, emphasized the urgent need for PNG to transition toward greener practices in the face of mounting climate challenges.

Her remarks centered on leveraging nature-based solutions to combat climate change, while also promoting sustainable development.

Sungi highlighted the importance of the country’s forests, as reiterated

by PNG Prime Minister Hon. James Marape.

“As we engage in international forums, we must fully utilize our forest resources,” she stated, noting the increasing frequency of climate-related

92 PNG BUSINESS NEWS

disasters over the past decade, which have disrupted traditional agricultural practices and altered weather patterns.

Despite contributing a mere 0.001% to global emissions, she argued that PNG cannot afford to ignore the impacts of climate change.

“If we don’t take action now, we risk becoming one of the highest emitters in the future,” she cautioned.

Sungi also addressed the challenges of financing climate initiatives, noting the delays often associated with accessing international funds like the Green Climate Fund.

“We need to mobilize resources effectively to respond to the immediate impacts of climate change,” she urged, noting the importance of public-private partnerships.

The CCDA executive detailed specific goals for transitioning from fossil fuels, particularly diesel-powered plants, to renewable energy sources by 2030. She said the National Energy Rollout Plan outlines potential investments in cleaner energy solutions across identified provinces.

Moreover, Sungi announced recent amendments to the Climate Change Management Act, which will enhance governance around carbon markets, enabling better collaboration between the government, local communities,

and the private sector.

This regulatory framework aims to streamline efforts in forestry management and carbon trading.

“I am pleased to say that even after the amendments of the Climate Change Management Act in 2023, we have made some few amendments to allow us as an authority to now manage and govern the space around carbon markets. And we have the regulation that maybe in a couple of days we will have a statement out that we have some endorsement.

“I would like to acknowledge our good Prime Minister in driving this agenda going forward together with our ministers,” she said.

“It a legislation that has been missing for a very long time. And having that around the forestry sector governs our work in terms of working together not only with our local communities, our landowners, but also with the private sectors around a different market approach, which we have identified another carbon market regulation.”

Sungi called for collective action, noting that achieving PNG’s climate goals requires partnership across all sectors. “We must ensure that our development is sustainable and inclusive,” she stated.

PNG Climate Change Development Authority Acting Managing Director Debra Sungi speaking at the PEC 2024 in Port Moresby. -R.Erehe

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PNG BUSINESS NEWS 93

ENERGY

PNG Solar Supply Lights Up South Pacific International Academy By: ROSELYN EREHE

T

he central goal of the Papua New Guinea (PNG) National Energy Authority (NEA) Corporate Plan 2023-2024 is to promote access to affordable, reliable, and sustainable energy services, which are crucial for economic growth and community prosperity.

A key focus is extending electricity access to 70 percent of PNG’s population by 2030 and achieving universal access by 2050. Currently, only about 15% of the nation’s population has access to electricity.

The NEA’s Corporate Plan for 2023-2027 outlines several key initiatives aimed at strengthening the country’s energy infrastructure and promoting sustainable energy development. Two notable initiatives are: Developing Renewable Energy: The NEA plans to invest in high-profile electric, solar, geothermal, biomass, and wind power projects across PNG. Strengthening Energy Infrastructure: This involves expanding the use of mini-grids, upgrading transmission and distribution networks, and utilising innovative financial mechanisms to attract private investment.

94 PNG BUSINESS NEWS

PNG Solar Supply (SPIA Enterprises Ltd) is committed to supporting this vision by providing sustainable energy solutions -- practically implemented recently with the South Pacific International Academy.

The Academy, located along the Papa-Lealea Highway, has faced power challenges over the past year, experiencing daily blackouts that severely disrupted educational activities.

From September 2023 to February 2024, the school endured eight-hour blackouts daily from 8 AM to 4 PM. Although the situation improved somewhat after February, the issues resurfaced during Independence Day celebrations this year.

On September 16, a damaged power line along the highway caused further instability in the voltage, leading to a potential threeweek blackout for both the school and staff housing. However, the academy had already anticipated these problems.

In a timely move, PNG Solar Supply commissioned an 80kW hybrid rooftop solar power system

over the same weekend as Independence Day. The solar materials are provided, designed, procured and commissioned entirely by the company, underscoring a commitment to 100% Papua New Guinea ownership and operation. Installation was completed by Construction Electrical Services Ltd. “We used the best materials in the world, and it is ref lecting in the system’s performance,” said Melvin Samuel, Sales and Marketing Coordinator, PNG Solar Supply.

Despite the unreliable grid power over the last three weeks, the new rooftop solar system has operated f lawlessly. With a robust battery backup of 122kWh and 80kW of solar panels, the classrooms have remained operational during the day, while staff houses enjoy reliable power throughout the night.

Switching on the hybrid solar system has completely replaced a standby diesel generator for the Academy.

“This solar solution is changing the game for us. We are no longer at the mercy of an unreliable grid,” Samuel added.

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PNG BUSINESS NEWS 95

ENERGY

Minister Maru: PNG Has ‘Serious Energy Crisis’ By: ROSELYN EREHE Minister for International Trade & Investment Hon. Richard Maru, speaking at the PEC 2024 Conference in Port Moresby. He pointed out the importance of the energy sector with the unfortunate Energy Crisis faced in PNG. -image Supplied by PEC2024, Official image online.

T

he Papua New Guinea (PNG) Minister for International Trade and Investment, Hon. Richard Maru, said PNG is still facing a pressing energy crisis, nearly half a century after gaining independence.

Minister Maru underscored the urgency of the country’s energy challenges, stating: “We cannot pretend, we can’t keep talking about providing for other countries in the world, talking about their energy security when we have serious issues at home.”

He expressed concern over the widespread blackouts affecting everyday life and businesses across the nation that holds back development, including his own region of Sepik, where residents can go up to five days without power.

“This is the reality,” he stated.

Speaking at the Petroleum and Energy Conference 2024 in Port Moresby, Minister Maru expressed gratitude for its location in PNG and acknowledging the critical discussions that needed to take place.

“To me, this is one of our most important conferences. I call on stakeholders to collaboratively tackle the energy crisis that has hindered economic development,” he said.

Despite PNG’s abundant natural resources, the nation has failed to capitalize on its hydro, solar, and wave energy potential, Maru said.

96 PNG BUSINESS NEWS

“The mining and petroleum sector did not deliver the result we were all expecting. Therefore PNG must now look at the non-resource sector with a focus on energy to drive the economy forward,” Maru said.

“Tourism, downstream processing, manufacturing, fisheries, that is where the future is. It will ride on the back of cheap and reliable energy. So much potential PNG has not turned into energy solutions. This energy crisis has held back the countries development, held back jobs, made it difficult to find investors,” Maru said.

He cited Madang province, where blackouts hinder the establishment of a fish cannery that could create thousands of jobs.

The Minister noted that PNG’s electricity prices are among the highest in the world, which has stunted the nation’s competitive edge in industries reliant on energy. He contrasted PNG’s situation with neighboring Indonesia, which benefits from significantly lower energy costs, enabling robust industrial growth.

Maru pointed to the need for a strategic shift toward renewable energy sources, urging the government and stakeholders to develop a comprehensive plan to transition to cleaner energy.

“We must move with the rest of the world,” he said, referencing global trends towards carbon neutrality by

2050.

Citing the low electricity penetration rate — only 19% of the population has access — Maru said: “The rest of the world is nearly 100%.”

He emphasized the urgent need for infrastructure improvements and criticized the lack of progress on the PNG Electricity Partnership agreement signed in 2018.

“We are looking for innovative solutions. We are inviting local and international energy companies to invest in PNG’s energy sector.”

The minister stressed the government’s commitment to deregulating the energy market and offering incentives to attract investment, aiming to increase electricity access to 70% of the population by 2050.

“We have a crisis. I’m not blaming anyone. We all have to take responsibility,” he said.

Maru told PNG Business News in an exclusive interview that Papua New Guinea stands at crossroads, and with strategic partnerships and innovative solutions, the nation can unlock its vast economic potential.

“We can talk all we want at this conference, but the fact is that PNG is facing an energy crisis, and we need to properly address this energy crisis before addressing other sectorial challenges. Energy is key to development,” he said.

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PNG BUSINESS NEWS 97

TOURISM

Tourism Minister Calls for Better Visitor Numbers, Enhanced Safety Measures By: ROSELYN EREHE

T

he Minister for Tourism, Art and Culture, Hon. Belden Namah, has emphasized the potential for Papua New Guinea (PNG) to significantly increase its tourist arrivals, stating that the current figure of 24,000 visitors is far below expectations.

“PNG should be receiving 2.4 million tourists annually,” he asserted, noting that neighboring countries like Fiji and Indonesia attract far greater numbers, with Indonesia welcoming 11 million visitors last year alone.

In his keynote address during the World Tourism Day Conference in September, Hon. Namah expressed concern over the number of tourists who bypass PNG while traveling in the region.

“Tourists are overf lying us. They are sailing around us. There’s only one reason they are doing that: there is no peace in this country,” he remarked.

According to a recent report from the PNG Tourism Promotion Authority (TPA), 24,407 visitors have arrived in PNG this year through 12 different international cruise lines.

The cruise industry is vital to boosting the nation’s tourism figures, with an additional four cruise ships expected to bring approximately 6,548 more visitors by the end of 2024, the TPA said.

The Pacific Encounter, operated

by Carnival Cruise Line, has been the most frequent visitor to PNG’s shores, while the French-operated Le Soleal has focused on the luxury market, albeit with fewer passengers.

Leading up to World Tourism Day, the CEO of TPA, Eric Mossman Uvovo, highlighted the country’s unique appeal, saying: “Papua New Guinea offers a truly unique experience, from our rich cultural heritage to stunning natural landscapes.”

Uvovo underscored TPA’s efforts to strengthen relationships with the international cruise industry, which he believes will enhance PNG’s po-

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The MS Nautica docked in Port Moresby earlier this year. The ship lay docked awaiting its many occupants who departed the ship to explore the city image Provided by TPA PR

A tourist, who arrived on the MS Nautica earlier this year, enjoying her tour at Tubuseria Village.

-image provided by TPA PR

sition as a must-visit destination.

Hon. Namah also addressed the need for enhanced safety to attract more tourists, emphasizing the importance of law enforcement over new legislation.

“We just need enforcement. Laws are there, but we need to enforce them,” he stated.

He proposed changing three specific laws related to littering, graffiti, and loitering, advocating for these offenses to be classified as criminal acts to improve public order.

“I believe when we change these laws to Criminal Code, like they do

it in Singapore, this place will be paradise,” Namah asserted.

He stressed the need for cleanliness and order across all regions of PNG, declaring that “first impressions are lasting impressions” and emphasizing the urgency of creating a safe environment for both locals and visitors.

As the country prepares for the holiday cruise season, both Namah and Uvovo remain optimistic about the potential for growth in the tourism sector, provided that safety and order are prioritized to ensure a welcoming atmosphere for travelers.

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PNG BUSINESS NEWS 99

TOURISM

PNG Tourism Focuses on Law, Infrastructure, and Safety By: ROSELYN EREHE

P

apua New Guinea (PNG) is focusing on improving safety and infrastructure to boost its tourism industry.

The Chief Executive Officer of the PNG Tourism Promotion Authority (TPA), Mr. Eric Mossman Uvovo, emphasized the importance of creating a safe environment for tourists during the World Tourism Day Conference on September 27th at APEC Haus in Port Moresby.

Uvovo acknowledged that while the tourism sector brings investments and global attention, concerns over law and order remain a significant barrier.

“Tourists need to feel safe, and businesses must operate without fear of disruption,” he said.

The conference highlighted the role of tourism in PNG’s development and the need for cultural preservation.

The event, hosted by PNG TPA, brought together stakeholders from the tourism sector to address key challenges such as law and order, aviation infrastructure, and the needs of tourism operators.

Uvovo called for cooperation between government agencies, security forces, and local communities to improve PNG’s image as a safe tourist destination.

TOURISM AS A CATALYST FOR PEACE Minister for Tourism, Arts, and Culture, Hon. Belden Namah, stressed the link between tourism, peace, and security.

In his keynote address titled Tourism as a Catalyst for Peace and Security in PNG, he stated: “There can be no tourism in the country without peace in our communities.”

He added that peace is essential for tourism to thrive, as “tranquil settings invite tourists and societal order fosters cohesion between communities.”

Discussions at the conference covered government security strategies, updates on aviation infrastructure, and the hurdles tourism operators face, fostering collaboration between public and private sectors.

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INFRASTRUCTURE AS THE BACKBONE OF TOURISM Reliable infrastructure is crucial for a successful tourism industry, according to Uvovo. He stressed the importance of accessible airports, roads, and utilities to attract international visitors.

Hon. Namah and Uvovo recognized the ongoing efforts to improve PNG’s aviation and transportation infrastructure, despite challenges.

STRATEGIES TO BOOST TOURISM Governor of the National Capital District, Hon. Powes Parkop, shared his vision to market Port Moresby as a unique tourist destination, calling it the “City of a Thousand Tribes.” He proposed re-establishing an international airport at a historically significant location, citing PNG’s World War II heritage.

University of Papua New Guinea (UPNG) tourism expert, Dr. Joyce Rayel, introduced the concept of “Tourism Police” to enhance visitor safety. Her research explored the challenges and potential benefits of this initiative, offering strategic insights on how to implement it successfully.

ENHANCING SAFET Y ACROSS PNG Chief Superintendent Kyle Salt-

marsh, Chief of Staff of the Royal Papua New Guinea Constabulary, highlighted the direct link between stable law enforcement and a thriving tourism industry.

“We must maintain stable law and order to support this vital industry,” he said, emphasizing the need for tailored solutions to address the unique challenges in different PNG communities.

Saltmarsh discussed the importance of infrastructure in policing, noting that the government is investing in police stations and housing through the Special Police Assistance Program.

In 2023, this program invested 150 million kina, with an additional 200 million kina planned for the following year. The program also provided 130 new police vehicles in 2023, replacing hire cars to ensure police visibility in the streets.

The Chief Superintendent emphasized quality over quantity in policing, stating, “Police officers are not security guards; quality counts.” He outlined ongoing collaborations with regional police forces to improve professional training for officers.

Tourism operators were encouraged to engage with provincial police commanders to ensure that security efforts support the tourism sector.

Saltmarsh called for open dialogue and collaboration to direct resources where they are needed most.

World Tourism Day Conference held in September at the APEC HAUS, Port Moresby.

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PNG BUSINESS NEWS 101

TOURISM

Tourism Business Incubation Center Officially Opens in Port Moresby By: ROSELYN EREHE

I

n support of small and medium enterprises (SMEs) in the tourism sector, the PNG Tourism Promotion Authority and the Ministry of Tourism, Art and Culture of f icially launched the Tourism Business Incubation Center on September 27th in Port Moresby.

Key f igures, including the Minister for Tourism, Arts, and Culture, Hon. Belden Namah, TPA CEO Eric Mossman Uvovo, National Cultural Commission CEO Steven Enomb K ilanda, and NCDC Governor Hon. Powes Parkop, were in attendance.

Hon. Namah emphasized the vital role of small businesses in the nation’s economic development in his keynote address, as he expressed gratitude to participants for their contributions to the country’s progress.

As the nation approaches its 50th independence anniversary, Hon. Namah ref lected on the need for economic independence, acknowledging the political foundation laid by the country’s founding fathers.

“It is time to fully realize our economic potential,” he stated.

The Minister acknowledged the proactive ef forts of the Governor of the nation’s capital, highlighting Hon. Parkop’s commitment to inclusive participation and the promotion of tourism, arts, and culture.

He recalled the Governor’s enthusiastic engagement upon Hon. Namah’s appointment, particularly concerning the well-known Kokoda Trail.

Hon. Namah also praised the leadership of Uvovo at TPA and K ilanda on the development of the f irst draft policy for arts and culture, and expressed enthusiasm for ongoing discussions around tourism policy.

“Tourism, art, and culture are inclusive industries,” the minister asserted. “They provide pathways for wealth creation and empower our communities.”

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He called for government support to enable local initiatives, noting that even small actions can lead to signif icant change.

The Minister also proposed a new co-location strateg y for key agencies involved in tourism and cultural promotion, aiming to streamline operations and enhance service delivery.

He underscored t he need for reg ulator y framework s to protect PNG’s cultura l her itage, advocat ing for t he patent ing of loca l desig ns and products to ensure t hey are aut hent ica l ly represented.

Hon. Namah stressed the importance of marketing PNG’s tourism internationally and the need for increased government investment in the sector.

“If we want to connect PNG, we must also prioritize tourism alongside agriculture, forestry, and f isheries,” he concluded.

The Minister’s vision is to see this initiative expand across all 22 provinces, empowering local communities and enhancing the tourism landscape in Papua New Guinea.

The center aims to provide essential training, registration, and support for local artisans, tour operators, and other small stakeholders in the tourism industry.

The TPA will provide necessary assistance to support small businesses to grow.

Governor Parkop congratulated the Minister and the National Cultural Commission on their ef forts. He emphasized the potential of small stakeholders in the tourism industry, including carvers and crafters.

“This incubation center will help many people in the city, especially those working independently,” Parkop said.

Hon Parkop also commended the collaborative spirit among stakeholders, saying, “We will call for partnerships to ensure the success of this center,” adding that this initiative is just the beginning of a larger journey to empower the local tourism sector.

For further information about the Tourism Business Incubation Center and upcoming programs, please contact the PNG Tourism Promotion Authority.

Another milestone for TPA, as they open Tourism Business Incubation Hub to empower PNG’s Tourism Entrepreneurs on September 27th-Port Moresby.

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PNG BUSINESS NEWS 103

TOURISM

American Expert: PNG Has Potential for Historical Tourism

By: ROSELYN EREHE

P

apua New Guinea (PNG) has the potential to become a key destination for historical tourism, according to Dr. Brent Glass, Former Director Emeritus of the Smithsonian Institution.

Dr. Glass said this during his recent visit to the Papua New Guinea Tourism Promotion Authority (TPA).

“Papua New Guinea’s war history is compelling and holds global interest, particularly in the context of World War II. Developing historical sites that are accessible to tourists will not only preserve this history but also create opportunities for international travelers to engage deeply with it,” he stated.

Dr. Glass emphasized that the PNG government and TPA should consider historical aspects as major attractions for international tourists.

The historian is a prominent figure in the global museum and history community, and has over 35 years of experience in government service.

Although he recently announced his retirement as Director of the National Museum of American History, he con-

104 PNG BUSINESS NEWS

tinues to serve as a senior advisor to the Smithsonian.

“Now, after more than 35 years in government service, I am excited to explore opportunities to promote history education, historical literacy, and public memory on a global scale, and PNG is one of those destinations,” said Dr. Glass.

Throughout his tenure, Dr. Glass oversaw significant transformations at the Smithsonian, including the creation of new exhibitions, the acquisition of key collections, and the development of online education initiatives.

Under his leadership, the National Museum of American History became a national treasure, achieving record attendance and widespread public engagement.

His visit on Tuesday, September 17, served as an opportunity to discuss the importance of promoting historical literacy and public memory in PNG. Dr. Glass was accompanied by Claudia Borevina, Acting Public Affairs Officer of the American Embassy, and Public Engagement Assistant Mathias Posu.

TPA’s CEO, Eric Mossman Uvovo, welcomed Dr. Glass and the team from the American Embassy, expressing gratitude for their valuable insights and support in promoting historical awareness in PNG. “We are deeply thankful to Dr. Glass for sharing his expertise with us.

His knowledge of promoting history and public memory is invaluable as we continue to develop our own tourism sector.”

Uvovo highlighted the Kokoda Track and other significant WWII sites as major selling points on the global stage.

“Our museums and war memorials hold a rich history that tourists from around the world are eager to discover,” he added.

“With the help of experts like Dr. Glass, we can further enhance our museums and war memorials to provide an even greater historical experience.

We look forward to building on these connections and continuing to promote Papua New Guinea as a destination rich in history and culture.” Uvovo said.

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PNG BUSINESS NEWS 105

FINANCE

TISA’s Growth: From Credit Union to PNG’s First Homegrown Bank Under CEO Koisen

T

eachers Savings and Loan Society (TISA), headquartered in Port Moresby, is the largest savings and loan society in Papua New Guinea (PNG) and the South Pacific excluding Australia and New Zealand.

Established in 1972, TISA began with a simple yet impactful mission: to provide registered teachers of the Department of Education a safe space to save and help one another during financial hardships.

In its earliest years, the Society had about 3,000 members and a total turnover of 2 million kina per annum.

Over the decades, TISA has transformed significantly in size, books, and inf luence under the leadership of Group CEO Michael Koisen, who has been at the helm for over 20 years.

Under Michael’s leadership, TISA has transformed from a small local credit union into a key player in PNG’s financial landscape.

Today, it serves over 85,000 members across the public and private sectors, with branches in 17 provinces.

As a group entity, it has diversified its portfolio to include banking, real estate and properties and insurance.

At the heart of TISA’s remarkable growth is its Group CEO, Michael Koisen, who joined the company in 2002, at a time when the organisation was under statutory management, and its books were far from healthy.

With a deep personal commitment to the organisation’s core purpose of improving the lives of ordinary Papua New Guineans, Michael stepped up to the challenge.

He saw an opportunity not only to restore TISA’s financial health, but to build a legacy of service and empowerment for its members.

“I’ve always believed that TISA’s mission isn’t just about financial transactions -- it’s about improving the quality of life for everyday Papua New Guineans,” Michael ref lects.

“This is a place where everyday mums and dads - teachers, police

106 PNG BUSINESS NEWS

officers, solders, nurses, and workers from all walks of life - who need financial support to help them live better lives sort help. That’s why I took on the challenge. I knew it was a huge task, but I felt it was the right thing to do.”

Before stepping in as CEO, Michael had already worked in various capacities within the organisation, gaining invaluable experience in operations, management, and governance.

This experience gave him the insight and understanding needed to lead TISA out of its most difficult period restoring stability and paving the way for future growth.

Under Michael’s leadership, TISA not only survived but thrived.

One of its milestones came when it became the first savings and loan society in the Pacific to offer its members a debit card, the YumiCard. This innovative step made it easier for members to access their funds and manage their finances more effectively.

In another first, TISA transitioned into a commercial bank - TISA Bank in August this year - making it the first homegrown bank in PNG. TISA Bank now offers a wide range of tailored banking solutions and digital services, further extending its reach and ensuring more Papua New Guineans can access the financial support they need.

Despite these successes, Michael is quick to point out that TISA’s rise has always been about more than just profit.

“Our core belief at TISA has always been service over profit,” Michael says.

“We are focused on making a real difference in the lives of our members, not just on financial returns.

We believe that when we prioritise people, everything else will follow.

Our members trust us because we stayed true to that purpose.”

This commitment to TISA’s purpose is at the core of Michael’s leadership.

In 2023, under his leadership, TISA become a member of the Global Alliance for Banking on Values (GABV), a network of banks com-

mitted to creating positive social and environmental impact through responsible banking.

For Michael, joining GABV was a natural next step for the business.

“Being part of this network aligns with our values and mission,” he says.

“We believe that banking should be more than just transactions; it should be a tool for change. Our mission has always been to serve our members and the communities we operate in.”

Michael’s vision for TISA goes beyond financial success; it’s about creating a lasting, positive impact on the lives of ordinary Papua New Guineans.

“Profit is essential for sustainability, but it’s never been my primary driver,” he explains.

“I’m committed to understanding the needs of our members and customers and delivering solutions that improve their financial well-being.

At the end of the day, it’s about making a difference in people’s lives.”

Michael hopes TISA’s story will not only inspire other financial institutions in PNG to embrace a similar values-based approach to banking but also encourage greater partnerships between TISA and other financial intuitions to promote ethical and responsible banking.

“We have the power to create a banking system in PNG that serves everyone and our businesses - that’s responsible, and that’s focused on long-term social and environmental impact and financial inclusion.”

For Michael, leading TISA is more than a job - it’s a calling.

As TISA continues to grow and evolve, his vision remains focused on empowering Papua New Guineans and helping them transform their lives through better access to banking and financial services.

“TISA is a household PNG brand. We are from here and PNG is home,” he says.

“We’re here for the long haul. We are not going anywhere. For TISA, we are building a bank, a business, and a legacy that will benefit all Papua New Guineans for generations to come.”

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PNG BUSINESS NEWS 107

FINANCE

BPNG’s Genia Unveils Sept. Monetary Policy Statement By: ROSELYN EREHE

B

ank of Papua New Guinea (BPNG) Governor Elizabeth Genia recently outlined the September 2024 Monetary Policy Statement at the Royal Papua Yacht Club in Port Moresby, amid the ongoing economic challenges and the central bank’s strategies to stabilize the nation’s economy.

Reflecting on the previous March Monetary Policy Statement, Governor Genia noted the persistent inflationary pressures that necessitated tough monetary decisions.

At that time, the Kina Facility Rate (KFR) was at a historic low of 2.0%. However, she reported that the central bank has since adopted a tightening stance, raising the KFR to 4.0% in September amid the need for price stability.

“We are maintaining our headline inflation projection at 5.0% for 2024, with underlying measures at 5.5%,” Governor Genia stated.

While headline inflation has decreased to 0.1% in mid-2024, core inflation measures indicate persistent pressures, particularly from domestic goods.

“A tighter monetary policy stance is necessary to manage these inflation risks,” she added, referencing potential global commodity price shocks.

The recent adjustments, including increasing the Cash Reserve Requirement from 10% to 12%, were aimed at tightening liquidity in the banking system. This resulted in rising yields on Treasury Bills and a notable steepening of the yield curve for the first time in years.

These measures help enhance the effectiveness of the monetary policy transmission mechanism, Governor Genia explained.

“The Kina Facility Rate was increased to 2.5% in May, accompanied with an increase in the Cash Reserve Requirement from 10% to 11% of all deposits held with the commercial banks. These complementary measures were designed to absorb some of excess liquidity from the banking system and to assist in strengthening the monetary policy transmission mechanism.”

“In further addressing the

108 PNG BUSINESS NEWS

long-standing issue of the excess of liquidity in the financial system, the Cash Reserve Requirement was further increased to 12% in June.”

“The more recent increases in the KFR to 3.0% in August and to 4.0% in September helped alleviate some of the pressure on the steepening in the yield curve while aligning our overnight policy rate with those of our major trading partners,” she added.

Genia observed that wholesale interest rates on government securities have returned to pre-COVID levels.

However, commercial banks have been slower to adjust their deposit rates, with indicator lending rates ranging from 7.20% to 11.70%.

“The excess liquidity remains a challenge, but we are exploring various policy options to address this,” she noted.

DOMESTIC ECONOMIC OUTLOOK On the broader economic outlook, Governor Genia expressed cautious optimism, noting that construction activity and higher agricultural prices, particularly for cocoa and coffee, are contributing to this growth.

“It has been a very difficult year for businesses in PNG. We do, however, believe the worst is behind us. We expect growth for 2024 to land at around 3 percent, driven mainly by the mineral sector, and while the non-mineral sector has experienced a slower expansion, it has been

driven by construction activity and higher prices for some agricultural exports, notably cocoa and coffee.

Government spending, particularly on construction, has also supported growth this year.”

Genia continued with PNG’s growth forecast for 2025 and 2026 of around 4.3 percent and 3.7 percent, respectively, reflecting increased capacity and full year production from the Porgera gold mine and construction activity in other resource projects.

“The prices of PNG’s agricultural exports remain high, but most are easing from their 2022 peaks. Gold and copper remain strong, while other metals are easing. Oil and gas prices have come down from COVID pandemic highs as supply increases, helping to moderate global inflationary pressures but potentially reducing profitability for PNG’s extractive industries,” she added.

BPNG GOVERNOR Elizabeth Genia delivering her speech during the Breakfast Presentation of the September 2024 Monetary Policy Statement in October 07th at the Royal Papua Yatch Club, in Port Moresby.

-image supplied BPNG PR

FOREIGN EXCHANGE DIFFICULTIES Governor Genia also said the difficulties in sourcing foreign currency “remain a significant concern.”

The introduction of a crawl-like exchange rate arrangement and a weekly foreign exchange auction aim to improve access to FX liquidity.

Despite net outflows in the foreign exchange market, she reported that interventions by the Bank have gra-

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www.workwithpngmphsl.com PNG BUSINESS NEWS 109

FINANCE

BPNG Explains Legislative Changes to Central Banking Act By: ROSELYN EREHE

T

he Bank of Papua New Guinea (BPNG) Governor Elizabeth Genia addressed recent significant legislative changes to the Central Banking Act during the September 2024 Monetary Policy Statement presentation at the Royal Papua Yacht Club.

The amendments, passed by Parliament in September, pave the way for the establishment of a new Monetary Policy Committee (MPC) aimed at enhancing the independence and transparency of monetary policy in PNG. “This is the last Monetary Policy Statement from the Bank of Papua New Guinea under the current governance structure,” Governor Genia stated.

“The recently passed amendments include a provision for the establishment of a new Monetary Policy Committee, comprising myself as

Governor, our Deputy Governor, and three appointees who are not members of the Bank of Papua New Guinea Board.”

The new committee’s formation marks a critical step in strengthening the independence of monetary policy decision-making, Genia said.

With only the Governor and Deputy Governor sitting on both the MPC and the Bank’s Board, the committee’s membership will be determined by the Head of State, based on advice from the National Executive Committee and the Treasurer.

The appointment of the three additional committee members is expected to progress smoothly, with the aim of having the new MPC operational as soon as practicable.

“This change will facilitate more robust discussions and decision-making processes in our monetary policy

framework,” she noted.

An essential aspect of the legislative amendments mandates the MPC to publish a statement following each meeting, detailing individual votes and the rationale behind decisions.

“This will add transparency to the process of setting monetary policy and provide greater insight into the considerations behind our decisions,” Governor Genia explained.

Moreover, the recent changes clarify the objectives of the BPNG, placing price stability as the primary and overarching goal.

“Our secondary objectives are to ensure financial stability; promote sustainable medium term economic growth, especially in the non-mineral and non-petroleum sector; and to promote the development of Papua New Guinea’s financial system,” Governor Genia said.

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“We are currently intervening in the domestic foreign exchange market with US$125.0 million each month and we will continue to support the market, with that level of intervention, for as long as is needed.”

currency and contributing to longterm prosperity for all Papua New Guineans.”

BPNG Business Sentiment Survey The Bank’s Business Sentiment Survey, conducted in July 2024, suggested that firms are operating in a very high-cost environment which is adversely impacting on their operations.

Governor Genia said: “Prices are expected to remain high while efforts are being made to source cheaper alternatives to manage costs and increase revenue and profit margins.

“It has been a very difficult year, but we are expecting further improvement in the second half driven by higher activity in construction, agriculture, wholesale and retail, finance and insurance, and mining sectors.”

She added: “The challenges you face are not unique to PNG; but they are made more difficult by our domestic barriers to business, including excessive red tape and poor infrastructure.”

Attendees included government representatives, CEOs of financial institutions, and members of the diplomatic corps.

dually improved the situation.

“We also introduced a weekly Foreign Exchange Auction in May 2024, to provide more frequent and predictable access to FX liquidity – providing increased transparency to the market with those intervention funds used for essential orders only.”

Genia said even though progress has been slow, she was pleased to report these reforms have had a positive impact.

“Access to foreign exchange has very gradually improved, and, while outstanding orders remain high, the extent of the Bank’s intervention with its foreign reserves means there is more foreign currency available in the market, though the excess of demand for foreign currency over that actually available, remains high.”

“Over the eight months to August, inflows into PNG’s domestic FX market amounted to PGK12.8 (or US$3.4) billion, while total outflow was PGK17.4 (or US$4.6) billion. As a result, there was a net outflow of K4.6 (or US$1.2) billion which was primarily met by BPNG’s intervention of K3.8 (or US$1.0) billion.

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LEGISLATIVE CHANGES TO CENTRAL BANK ACT Genia also noted recent legislative changes to the Central Banking Act, which will see the establishment of a new Monetary Policy Committee.

This committee “will enhance the independence of monetary policy decisions and require transparency in its operations.”

“We are in a period of transformational change,” Governor Genia affirmed, underscoring the need for coordinated efforts between the government and private sector to address structural challenges hindering business growth.

She acknowledged the difficult landscape businesses are navigating but expressed hope for improvement in the second half of the year, driven by various sectors.

“Our focus is on ensuring these reforms are implemented effectively, allowing businesses to access foreign

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PNG BUSINESS NEWS 111

FINANCE

Information Workshop 2024 Addresses Corruption Event Promotes Citizen Participation in Budget Processes By: ROSELYN EREHE

P

apua New Guinea’s latest score on the Corruption Perception Index (CPI) is 29 out of 100, showing a slight improvement of one percent from 28 out of 100 in 2021.

Despite this progress, PNG remains among many countries with little to no improvement in tackling corruption.

This data was highlighted by PNG National Planning Minister Sir Ano Pala during the Government and Civil Society Joint Budget Information Workshop 2024.

He emphasized the importance of organizations and platforms such as the Open Government Partnership, stating that it “paves the way to address some of these challenges we have faced as a country.”

“Having access to information, participation of civil society organizations in both the budget formulation and implementation and dissemination of fiscal information is still a challenge. Having a consultative approach to decision making and a transparent industry provides the basis for democracy and importantly good governance,” he added.

The Consultative Implementation & Monitoring Council (CIMC), the OGP Secretariat, and the Australian Government through the Australi-

an-PNG Partnership, which aims to build community engagement in PNG, supported the workshop.

The OGP is a multilateral initiative that seeks to secure concrete commitments from national governments to promote open government, empower citizens, fight corruption, and leverage new technologies to strengthen governance.

A key topic during the second day of the workshop was the Extractive Industries Transparency Initiative (EITI), which serves as the global standard for promoting transparency and accountability in countries rich in oil, gas, and mineral resources. It is implemented through the participation of government, civil society, and industry.

CIMC houses the civil society umbrella body, the PNG Resources Governance Coalition, which aims to: • Raise public awareness on resource governance and sustainability.

• Advocate for accountability and good governance in the planning and management of the extractive sector.

• Develop options for community participation and safeguard PNG’s national heritage, consistent with the National Constitution.

The two-day workshop from September 24th to 25th at the Holiday Inn in Port Moresby had the theme “Citizens Participation in the Government’s Budget Formulation, Implementation & Reporting Process: Opportunities, Learning & Challenges.”

Day one included presentations from civil societies covering: - Key findings from regional workshops.

- Annual budget processes and reforms.

- Public hearings/forums on budgeting, planning, and implementation at all levels, focusing on shared experiences and learning.

- Initial impressions on citizen participation in government budget formulation, implementation, and reporting.

Day two featured sessions on: - Budget implementation, reporting, and local innovation.

- Continued discussions on budget implementation and reporting.

- Showcasing local innovations in participatory and inclusive budgeting.

- Plenary discussions for group recommendations.

COMPANY

AsiaPac: Your Trusted Global Procurement Partner

I

n the global economy, it is practically impossible to improve and expand a business without a reliable supply chain partner. This is where AsiaPac’s longstanding expertise proves invaluable.

Focused on dedicated and strategic business development in the global supply chain management arena throughout Southeast Asia, Australasia and Papua New Guinea, AsiaPac are specialists in door-to-door delivery, sourcing, logistics, procurement, commercial support services, certif ication, quality control and security of supply.

With its headquarters in China,

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AsiaPac is well-versed with its manufacturing systems and practises.

Its perfected long-term networking includes accredited associations that span decades, including within Australian certification standards, LCC, ISO, CE and ILO, all incorporating hundreds of well-established and reputable factories.

Additionally, the company oversees representation in Indonesia, Australia, Thailand and India, all with dedicated AsiaPac team outfits.

In Papua New Guinea, AsiaPac enjoys the benefits of several established joint ventures and continuing transactions in mining, oil and gas, construction, furniture, hotel fit outs,

camp fit-outs, white & brown goods, construction and heavy equipment.

The company is also into merchandising, print, packaging, electronics, technology, solar, machinery, motor parts, agricultural, chemicals, cleaning materials, PPE, fabrics, FF&B, boxing, medical, textiles, OS&E, and a vast array of consumables across the board.

AsiaPac looks to provide an ethical, reputable, first class supply orientated solutions that its high-end customers demand. Its end-to-end supply engine functions f lawlessly within its very well-practised scope of operations. Finally, its competitive results speak for themselves.

ISSUE 4, 2024 – www.pngbusinessnews.com

At PNG Solar Supply, we want to provide you with the tools you need to set up your solar systems. We are an experienced Papua New Guinean owned business focused on offering products from diverse manufacturers to best suite your needs.

We have a team that is able to help with design, and we handle everything for you. We challenge you to find an easier way to light up your world.

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PNG BUSINESS NEWS 113

COMPANY

Remington CEO Navin Raju on the Future of Business Technology By: ROSELYN EREHE

I

nnovative technology has shifted business operations from traditional to modern methods. In an interview with PNG Business News, Remington Group CEO Navin Raju shared his vision and stressed the necessity of adapting to these changes.

The Remington Group Board of Directors recently appointed Raju as the new CEO, recognizing his extensive experience in leadership and business development. Prior to this role, he was CEO of CPL Group PNG and held other senior positions in various companies, including Heli Nuigini Limited.

The Remington Group, formerly a key typewriter distributor in the Pacific and now a leading printer distributor in Papua New Guinea, faces new challenges. Raju mentions that the brand had an early presence in the Fiji Islands, as noted by his father.

“It began with typewriters, and Remington was a significant business across the Pacific. My 80-year-old father noted that Remington sold typewriters in Fiji when he was young,” he said.

The Remington brand has been supplying products to PNG since 1948 and has continuously adapted its business model to keep pace with technological advancements and changing times.

“The essence of our business has remained consistent, but we are now facing a pivotal moment. Our line of business is likely to decline as society increasingly adopts paperless solutions and e-commerce.”

He stressed that Remington Group must adapt to changing market dynamics. “We aim to find new products and services that match our current offerings. My goal is to grow the business while contributing to the country’s growth for the next many more years.”

“We aim to be leaders in the print and ICT sectors as technology evolves,” Raju said.

The Remington Group is the preeminent provider of business solutions, print technology, and related services in Papua New Guinea.

With an unwavering commitment to

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quality and local talent development, Remington has been a pivotal entity in PNG’s business sector for 76 years.

Since its inception, the Group has cultivated a comprehensive portfolio, encompassing Remington Technology, FX Business Centre PNG, Premier Business Solutions PNG, and BizPrint PNG. Its extensive national presence extends beyond Port Moresby to several key provinces, including Lae, Madang, Kokopo, Wewak, Goroka, and Mt. Hagen.

Remington’s print technology solutions furnish businesses, government offices, and organizations within PNG with superior operational platforms in business services, document solutions, and commercial printing.

During the interview, Raju detailed his journey to PNG. Originally from Fiji and having grown up in New Zealand, he arrived on a three-year contract in 2010 and has since made PNG his home over the past 14 years.

“My family and I have grown fond of this place. We feel integrated into the country and are committed to PNG,” he stated.

He emphasizing the cultural nuances in business settings. Drawing from his Fijian background, he remarked, “I understand Melanesian culture and the challenges that young Papua New Guineans face in the workforce.”

He stressed the importance of practical exposure, saying: “While theoretical knowledge is essential, providing practical experiences and exposure is crucial for success.”

Raju described the working environment in PNG as dynamic, with daily challenges emerging regularly.

“It is vital to understand the social circumstances of employees; often, a missed day of work stems from deeper underlying issues impacting their lives,” he concluded.

NATIONAL CONTENT: Raju emphasized the importance of having Papua New Guineans in management, advocating for their promotion to senior roles with the right skills. As he shared his past experiences, he noted the need for qualified candidates to prevent mismanagement.

Despite challenges like corruption, fraud, crime, and poor infrastructure in PNG, Raju remains hopeful about nurturing local talent.

“We need to invest in education and provide exposure to prepare Papua New Guineans that can effectively take on leadership roles.”

“Exposure is crucial. People may have the theoretical knowledge, but we must provide them with the practical experiences necessary to succeed,” he asserted.

ON BUSINESS IN PNG: On the economic front, Raju articulated concerns regarding the business sector, particularly with respect to the availability of foreign exchange.

“Our overheads are considerably affected by the forex situation, making it challenging for us to maintain competitiveness,” he explained. He urged for enhanced government support to improve the operational environment for businesses.

As Remington Group continues to adapt to market demands, Mr. Raju stressed the need for forming partnerships that prioritize local printing over international production.

“We must deliver the right products at competitive prices to remain viable. Increasing business volume is crucial for achieving cost efficiency,” Raju said as he reaffirmed his vision, which now forms the cornerstone of the Remington Group’s objectives.

“We have been a part of PNG’s growth for the past 76 years, and this company remains committed to contributing to the nation’s development for many more years. We aim to be integral to the print and ICT environment, furthering the advancement of modern technology.”

“Our vision is to become a leader in this domain as we pursue our business endeavors. This new vision reflects our ambition to lead and contribute to the country’s growth in this sector,” he added.

PNG Business News congratulates CEO Navin Raju on his new role and expresses gratitude to the Remington Group for their ongoing dedication to providing quality services.

ISSUE 4, 2024 – www.pngbusinessnews.com

Building Businesses

that Build PNG Located in the heart of Port Moresby’s industrial and logistics zone, PORTSIDE Business Park offers PNG investors seamless accessibility through land and sea channels thereby offering strategic connectivity to domestic and global markets.

Measuring 38 hectares of secured prime land that is registered on a clear 99 year state lease, PORTSIDE is envisaged to become a premier economic hub for the benefit of Papua New Guinea.

Backed by PNG-based Steamships Limited, an ASX and PNGX listed entity, it will include quality facilities and features designed to cater for the needs of a wide spectrum of organisations.

Proximity to Motukea International Wharf Supporting Retail Spaces Built-to-Suit Warehouses Industrial Flex Spaces Aggregate Storage

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COMPANY

Steamships Breaks Ground on Portside Business Park

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teamships was proud to break ground on Portside Business Park, its new large scale mixed-use development which is managed by its property division, Pacific Palms Property. The ceremony was attended by the Deputy Prime Minister and Minister for Lands Hon. John Rosso MP and Hon. Dadi Toka Jnr, NCD Deputy Governor and Chairman of the Motu Koita Assembly along with key managers from Steamships and Pacific Palms Properties.

Spanning a site area of approximately 38 hectares, Portside Business Park is strategically located adjacent to the Motukea International Terminal and on the energy corridor to the LNG Plant. This mixed-use business park development offers an end-to-end logistics solution with warehouses, hardstand yards, offices, retail outlets and a residential compound. In due course, additional facilities will be added, including a hotel.

Mr. Chris Daniells, Steamships Managing Director, added that “Portside Business Park represents Steamships ongoing commitment to developing Papua New Guinea, and when fully developed, Port-

118 PNG BUSINESS NEWS

side will represent an investment of circa. PGK1bn and help create over 1,000 new jobs. Today’s groundbreaking supports the National Government MTPD4 agenda to drive growth and to broaden the economy in the non-extractive sector and Portside provides the perfect location next to the port for any company looking to enter downstream processing or manufacturing.

Steamships has a number of other projects in the pipeline, and I look forward to groundbreaking ceremonies on those soon. At Steamships, we take a long-term view, PNG is our home.

General Manager of Corporate Affairs Mr. Vele Rupa comments “Steamships is delighted to be bringing another Grade A development to Port Moresby. It has taken considerable time to navigate the bureaucracy to get this project off the ground, but customers can be confident that they are coming to a development with bona fide title that will be developed to best in class international standards,” he further added, “Economic growth can only work when the National Government allows

private sector to make investment decisions by having a right policy and investment landscape.”

Pacific Palms Property will develop Portside in phases, with today’s groundbreaking kicking off the major infrastructure works. The residential compound is already complete, as are the perimeter works.

In his keynote speech, Deputy Prime Minister and Minister for Lands, Hon. John Rosso commended the Company’s investment “The Marape-Rosso Government welcomes and commends Steamships Trading Company for their continued confidence in our nation through their latest significant investment in the new Portside Business Park. This development will not only enhance the commercial landscape of Port Moresby but also create much-needed jobs, stimulate local industries, and drive economic growth. Strategic investments like these are essential as we strive to build a more resilient and diversified economy. We look forward to seeing the positive impact this partnership will bring to our people and the future of Papua New Guinea.”

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PNG BUSINESS NEWS 119

COMPANY

Ark Modular Buildings: Speed, Cost, Quality AND Green Too

This two-storey and 800- person accommodation complex is one of several camps Ark has delivered to its oil, gas and mining clients in Papua New Guinea.

Camp assembly was undertaken rapidly and incident-free via a localised workforce.

M

odular buildings from Ark Pacific are increasingly being chosen for mining and oil and gas camps due to their speed of assembly, low cost, high quality, and green credentials.

With a multitude of building configurations, Ark camps can be found throughout the world, including at some of its biggest LNG developments.

In 2010, Ark delivered its first LNG camp in PNG – a 1,000-person, multi-storey accommodation complex and support buildings assembled by a 99 percent local workforce in less than one year. Ark camps are now scattered across PNG. Ark’s impressive production capacity – 2,000 cabins (i.e., modular units) per month – continues to grow largely due to its substantial and ongoing investment in technology.

General Manager for Ark Pacific, Cass Ruka, confirms that for a 5,000-person camp it takes a maximum of three months, upon issuance of a purchase order, to have all components delivered to site. Moreover, given that the company manufactures and delivers in stages, the first lot of building componentry can be on site in less than one month.

Ruka explains that Ark’s production capacity is underpinned by an

120 PNG BUSINESS NEWS

intelligent manufacturing system that is powered by both robotics and data analytics. He goes on to emphasise that the same system also maximises quality.

“Not only can our robotic welders operate 24/7 and 365 days per year, but they’re incredibly precise, producing seamless and perfect welds to ensure the durability and longevity of Ark’s buildings irrespective of whether they’re needed in the jungles of PNG or deserts of Qatar,” he said.

Ark’s investment in technology, as well as in its expanded factory facilities, enables it to manufacture at considerable scale, which means that it can bring its product to market at a low cost.

“We don’t cut corners on quality to keep prices down. It’s our scale and our technology that enables us to price our building systems so reasonably” explains Ruka. “We’re an ISO 9001 certified company with plenty of other certifications such as our fire safety ratings to attest to the superiority of our buildings.”

In addition to the winning trifecta of speed, cost and quality, Ark’s modular buildings also perform well when it comes to their environmental credentials.

Ark has the lowest emission rates in the world of modular construction. Its high-tech manufacturing

system keeps production waste to a bare minimum and because they are assembled (as opposed to constructed) there is no on-site pollution, wet work, or special waste disposal required.

Ark buildings are also re-purposeable and largely recyclable.

Another important environmental advantage when building with Ark is a reduced freight footprint – up to 70 percent less than its competitors. Six of its flat pack units are equivalent to a single standard 20-foot shipping container when stacked together ready for transport.

This means less ships, trucks, barges, etcetera when building with Ark, which in turn equates to (1) lower carbon emissions, (2) lower costs, (3) reduced degradation of local road networks, and (4) in the case of river transport systems, less water traffic and hence vessel wake erosion.

Ark has a 20-year history of delivering fit for purpose camps to oil, gas and mining developers all over the world. It’s building systems continue to improve and evolve in accord with client requirements and international standards.

To learn more about Ark buildings in PNG, including its resource sector camp expertise and the advantages of its unique building systems: www. arkpacific.net ISSUE 4, 2024 – www.pngbusinessnews.com

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PNG BUSINESS NEWS 121

COMPANY

PNG Forest Products: Sustainability in Motion

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elebrating 70 years of manufacturing in Papua New Guinea this year, PNG Forest Products has long been an industry leader in Engineered Wood Products and is committed to building a better future through sustainable manufacturing practices.

All timber is sourced from renewable pine plantations managed by the PNG Forest Authority, with a focus on minimising waste to achieve maximum utilisation of the wood fibre.

“Traditionally, plywood manufacturers will peel the logs for the veneers down to a core of approximately 110mm, which they generally discard,” says Manager of Strategy and Development, Peter Robinson.

“But at PNGFP we re-peel that core in a special spindleless lathe to about the thickness of a broom stick; in addition, we also join less-than-full sheets of veneer to create useable full sheets thereby maximising the recovery.”

“All wood waste is chipped and used as fuel for the Biomass Boiler producing steam for the veneer driers, plywood hot presses and kilns; and any residual sawdust is used at PNGFP’s poultry farm. So you can see we are serious about complete log utilisation.”

PNGFP also works in conjunction with the PNG Department of Environment and Conservation (DEC) to ensure that the best environmental practices are maintained.

In fact, PNG Forest Products is the only company in PNG that has achieved PEFC Chain of Custody accreditation on the basis of 100% controlled wood. PEFC (Programme for the Endorsement of Forest Certification) is an international organisation based in Switzerland that promotes sustainable forest management through independent third-party certification.

As part of the company’s compliance with PEFC accreditation and certification, PNGFP’s environmental practices are audited annually and DEC conducts annual inspections as part of their operating permit conditions. PNGFP’s Chain of Custody certification demonstrates a commitment to sustainable forest management that is unique in this country.

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As a further commitment to sustainability, the manufacturing facilities in Bulolo are powered by PNGFP’s own Hydro Power stations which they continue to invest in heavily. In 2023, PNGFP Hydro commissioned their fourth power station at Baime, feeding 11.6MW into PPL’s Ramu grid and raising their capacity to supply PPL up to 22MW. “Our carbon footprint is extremely low due to the combination of electri-

cal power from Hydro and heat from wood waste, whereas in Australia, for example, the plywood manufacturers are powered by coal fired power stations and they use gas for heating the driers and presses,” Robinson explains.

“Our combination of renewable timber resources processed with sustainable hydro power and biomass heat energy makes PNGFP’s engineered wood products truly and uniquely green.”

ISSUE 4, 2024 – www.pngbusinessnews.com

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PNG Ports to Develop Lae’s Industrial Park

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NG Ports Corporation (PNG Ports) is actively pursuing new business opportunities and courting new investment partners.

The company is repositioning itself from being ‘all about ports’ to also being a major player in the country’s commercial and industrial real estate sector. This repositioning and appetite for new and different business is evident in PNG Ports’ development of the Lae Industrial Park right next to the nation’s busiest port.

As the owner of 15 ports, including the international terminals in Lae and Port Moresby, PNG Ports also owns hundreds of adjacent hectares of prime waterfront land. To date, this land has been largely underutilised. This is set to change, especially with regard to the proposed Lae Industrial Park, part of the Lae Port Development project.

Situated on the western side of the Lae Tidal Basin, the long-awaited development already has 45 hectares of hardstand, a sealed network of roads, utilities, storm water drainage and road lighting.

PNG Ports CEO Neil Papenfus describes Lae Industrial Park as “the perfect solution for businesses wanting to realise the cost, operational and logistical efficiencies of being located right on the doorstep of a modern, international port, and one that is strategically located close to major shipping routes connecting Asia and Australia.”

Prospective tenants for the development include those with manufacturing and processing requirements, as well as businesses needing all kinds of storage (e.g., laydown yards, warehousing, general cargo, dangerous goods).

Office complexes can easily be accommodated, and separate zones are available for a ‘fuel farm’. Lae Industrial Park’s project staging capabilities are particularly good, given the sheer volume of land available, and of course the port.

Lae Port, the key drawcard for the development, has made impressive gains in efficiency since international terminal manager ICTSI took over operations in 2018. An investment in new equipment such as gantry cranes has played a large role in the port’s transformation. The World Bank Container Port Performance Index (2023) rated Lae as more efficient

124 PNG BUSINESS NEWS

than several other ports in the region, including Melbourne, Sydney, Brisbane, Auckland and Napier.

The potential for Lae Port to become a significant regional shipping and logistics hub will be boosted by a 150 metre extension of the international terminal’s wharf, allowing much larger vessels to utilise the facility. With funding provided by the Australian Government’s Australia Infrastructure Financing Facility for the Pacific (AIFFP), construction will likely commence in 2026.

Businesses that establish their operations at Lae Industrial Park won’t just have easy access to Lae Port. PNG’s industrial centre of Lae has a large, willing and able labour market and there are plenty of local businesses operating across a broad spectrum of industries to feed into the supply chains of the park’s tenants.

“Not only is PNG Ports open for business, but we are also hungry for business” says Papenfus. “We know we need to make it as easy as possible for businesses to set up their operations at Lae Industrial Park, or indeed at any of our Ports. This is why we’re asking business leaders to tell us what they need and how we can help them. For example, if they need a purpose built facility, we can partner with them on that. Likewise, if they require flexibility around leasing during construction, we can accommodate that.”

The development also represents the perfect opportunity for a new and fit-for-purpose dockyard. Not only is Lae PNG’s major shipping centre, but currently many vessel owners are increasingly unable to have emergency maintenance and mandatory dockings completed in-country at the

existing Port Moresby facility. Papenfus believes that a Lae dockyard would not only better service PNG shippers but also those in the broader region, providing both Lae and PNG with a much needed economic boost.

Another drawcard for Lae Industrial Park is the potential for Special Economic Zone (SEZ) status and the tax advantages this brings.

Papenfus reports that PNG Ports is working closely with government on an SEZ application for Lae port and the hundreds of hectares it sits upon.

Papenfus points out that the park is just one part of the major Lae Tidal Basin development that PNG Ports and the PNG Government are partnering on. “There are many more hectares of land to be developed, buildings to be constructed, and major infrastructure to be delivered in coming decades.”

PNG’s business community has largely come to terms with the delayed commencement of the Papua LNG construction phase. Many are now turning their attention to the opportunities availed by other major resource developments, in particular Wafi-Golpu but also Frieda River.

Lae Port, given its proximity to these major projects, will be critical to their construction and businesses operating out of Lae Industrial Park will be ideally located to support (and prosper from) these developments.

In the meantime, Lae Port and Lae Industrial Park have an important role to play in the government’s ongoing desire to grow other export industries including agriculture, tourism and fisheries as a mechanism to lessen the nation’s reliance on the boom and bust nature of the resource sector.

Situated on the western side of the Lae Tidal Basin, the long-awaited Lae Industrial Park development already has 45 hectares of hardstand, a sealed network of roads, utilities, storm water drainage and road lighting.

ISSUE 4, 2024 – www.pngbusinessnews.com

Regulator of Exploration and Mining Manager of Mineral Resources

Mining Haus, Poreporena Freeway P.O. Box 1906, Port Moresby National Capital District, Papua New Guinea

Phone: (675) 321 3511 Facsimile: +(675) 321 5711 Email: info@mra.gov.pg www.mra.gov.pg

COMPANY

Secure Your Success in PNG with PNG CR Services Limited By: ROSELYN EREHE

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apua New Guinea, a nation known for its abundant natural resources, a strategic Pacific location, and untapped market potential, makes the country an attractive destination of opportunities for international investors.

However, operating in PNG can be complex, with challenges such as managing a unique regulatory environment, overcoming logistical hurdles, and managing cultural differences.

For foreign companies, these obstacles can hinder their ability to establish and maintain successful operations in the country.

A solution to these challenges is partnering with a locally established company with the expertise to guide international investors through the complexities of the PNG business environment.

PNG CR Services Limited, with over 14 years of experience, stands out as an ideal partner for those looking to succeed in this unique market.

PNG CR Services Limited is a multidisciplinary company that specializes in helping international companies manage the complexities of operating in Papua New Guinea.

Its deep local knowledge, extensive network, and ability to manage large-scale projects make them a reliable partner for any business looking to enter the PNG market.

With a portfolio that includes over 127 completed projects across various sectors, including mining, oil and gas, manufacturing, and government services, PNG CR Services has a proven track record of success in both remote and urban areas of the country.

The company has earned the trust of tier-one clients such as Kumul Petroleum Holdings, ExxonMobil, Newcrest Mining, Chevron, Australian Federal Police- Australian Government, Trans Wonderland Group, PNG Sustainable Development Programme and the United Nations Development Programme.

The legal and regulatory knowledge PNG CR Services has will help investors avoid common pitfalls, such

126 PNG BUSINESS NEWS

as delays due to non-compliance or misinterpretation of laws.

PNG CR Services Limited’s experience operating in the most remote parts of the country is uniquely positioned to help clients overcome remote geography and underdeveloped infrastructure barriers, ensuring timely delivery of goods, materials, and personnel.

The company has operation bases across the country, having established its main base in Port Moresby.

For potential investors and companies, establishing trust and building strong relationships with local stakeholders is crucial for the success of any foreign investment in PNG. The company’s longstanding presence in the country has enabled it to develop cultural f luency and establish strong connections with local communities, landowner associations, and government bodies.

Their ability to manage the social and business structures in PNG is a key advantage in building rapport with local stakeholders and ensuring that projects progress smoothly.

Additionally, PNG CR Services Limited places a strong emphasis on local capacity building. The company provides training, employment opportunities for more than 300 personnel in PNG, and provide support to local businesses which helps to foster sustainable economic growth and creates a lasting positive impact on the communities where

they operate.

The deep understanding of the local political, economic, and environmental landscape enables the company to help investors manage these risks.

The company’s extensive experience allows them to identify potential challenges early and implement effective strategies to mitigate risks, ensuring projects stay on track despite external uncertainties.

PNG CR Services Limited has demonstrated its capacity to deliver complex projects on time and within budget.

Notable examples include recently completed, large-scale infrastructure projects such as the health infrastructure projects like the Nursing College in Balimo Western Province, PNG SDP in Balimo and ABT ASSOCIATE – Agricultural Hub Morehead.

These successful projects highlight PNG CR Services Limited’s capability to manage projects across various industries and terrains.

Having a reputation built on the foundation of trust in the country’s business environment, partnering with PNG CR Services Limited puts both the investor and the country in a win-win situation.

For more information on how PNG CR Services Limited can help your business thrive in PNG, establish contact today to discover tailored solutions that will ensure the success of your investment.

ISSUE 4, 2024 – www.pngbusinessnews.com

COMPANY

Tropicair: We Fly for You

T

ropicair is making significant advancements in its operations with the return of its VIP/Medivac CJ3 jet, fully refurbished and ready for service in late November.

This aircraft stands out as the only jet within the Pacific region equipped for medical evacuations, emphasizing its vital role in emergency medical services.

Based in Port Moresby, the CJ3 jet offers rapid patient transfers with impressive cruise speeds exceeding 700 km/h, a crucial factor in urgent medical missions.

Tropicair has successfully utilized this aircraft for medivac operations across Southeast Asia, including countries like Indonesia, the Philippines, Singapore, and Malaysia, as well as in the South Pacific, covering destinations such as the Solomon Islands, Vanuatu, Fiji, Nauru, and Guam.

Australia remains a preferred destination for medical care, given its proximity and high-quality

healthcare facilities in cities like Cairns, Townsville, Gold Coast, Brisbane, Darwin, Sydney, and Melbourne.

To complement the CJ3 jet’s capabilities, Tropicair operates a diverse f leet of aircraft, including Twin Otters, Cessna Caravans, and K ing Airs, which can access smaller, remote airstrips throughout Papua New Guinea. This strategic f leet allows for seamless wing-to-wing international medivac transfers.

In addition to its medivac services, Tropicair has completed a terminal extension project, enhancing its VIP charter services. The new VIP terminal and lounge completed in mid-2024, will provide an upscale experience for passengers.

The refurbished CJ3 jet, along with a newly acquired VIP King Air, ensures that Tropicair will continue to deliver reliable and timely services in one of the most remote and challenging regions in the world.

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Industry ● Commerce ● Manufacturing ● Transport ● Shipping

Tel: +675 472 2340 Fax +675 472 6038 Email:admin@Icci.org.pg www.Icci.org.pg 128 PNG BUSINESS NEWS

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Pacific strength, Global connections!

In Business, Flexibility is everything.

BSP Financial Group Limited (BSP) is the leading financial services provider in the Pacific market, proudly head-quartered in Papua New Guinea.

We’re determined to earn your business and connect the Pacific to the World, with our global expertise and local knowledge.

BSP offers our customers a whole of bank solution to their banking needs; from Personal Financial Services, Private Banking and Corporate Finance products, which include import-export, money market, treasury and foreign currency. www.bsp.com.pg

ISSUE 4, 2024 – www.pngbusinessnews.com

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Atlas Steel Expands Services for Mining Sector By: ROSELYN EREHE

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tlas Steel PNG has broadened its services to meet the needs of the mining sector, eliminating the need for local mines to rely on overseas suppliers for mining support products.

The company, which has been Papua New Guinea’s premier steel manufacturer and distributor for 48 years, is now diversifying its offerings beyond its traditional focus on the industrial sector, building and construction.

Atlas Steel has long been a supplier to the country’s mining sector, and now, in response to increased demand, it is introducing a range of consumables and ground support products designed specifically for both surface and underground mines.

The company aims to streamline the mining supply chain by offering a more efficient, locally managed solution.

Mr David Kembek, Technical Sales Manager of Atlas Steel PNG, told PNG Business News: “For years, Atlas Steel has served the steel and construction industries in Papua New Guinea.

However, we are now venturing further into the mining sector, which holds tremendous growth potential.”

“Our focus is on introducing a new range of mining consumables and ground support systems to better support local mining operations.”

The company’s expansion is a direct response to the challenges faced by the mining industry, particularly during the COVID-19 pandemic, which disrupted global supply chains and led to higher shipment costs and longer lead times.

Atlas Steel aims to address these issues by holding stock locally, significantly reducing delivery times.

Kembek said: “We understand the importance of timely supply for mining operations.”

“Many mines rely on critical consumables being available when needed.

By carrying stock locally, we can ensure faster and more reliable deliveries to meet those needs.”

As part of its expansion, Atlas Steel is also working to develop the local supply chain and create new opportunities for local engineers and graduates to gain experience in the mining sector.

“We’re actively engaging with the country’s major mining operations,

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including established names like Lihir Gold Mine (Newmont PNG) and K92 Mining, which is PNG’s largest underground mine,” Kembek added.

“We are also continuing to service OK Tedi, one of our longest-standing customers. Additionally, we are eager to support emerging projects such as the Wafi-Golpu Joint Venture, which we believe will play a key role in the country’s mining future.”

Currently, Atlas Steel maintains strong relationships with all major mining companies in PNG, supplying its traditional range of products.

However, with this new initiative, the company is expanding its services to include a broader portfolio of mining-related consumables like shank adaptors, speed rods, drill tubes, button bits, mine mesh, cable bolts and split set friction rock stabilizers.

Kembek emphasized the company’s proactive approach. “We are planning

visits to key mining sites across the country to discuss both our established product range and the new consumables we are introducing. We are optimistic that these discussions will lead to stronger partnerships with the mining community.”

In addition to strengthening relationships with local mines, Atlas Steel is also in talks with Australian suppliers to further expand its range of offerings.

The company is positioning itself as a key player in PNG’s mining supply chain by ensuring that local mines can access high-quality materials, plus an added stock management service to save valuable space and keep stock counts, without the need to look abroad for these services.

“By supplying from our branches in Lae and Port Moresby, we can ensure that mining companies have the materials they need, when they need them.”

ISSUE 4, 2024 – www.pngbusinessnews.com

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Digital Transformation is Just the Start

T

he Information Management division of APCS (Asia Pacif ic Communication Specialists) may be new, but it comes equipped with more than three decades of experience in PNG information compliance and governance.

Better known across PNG for their expansive range of IT products and services, as well as business internet, APCS’s foray into the world of information management comes readymade to meet PNG’s governance and compliance requirements.

This is something that APCS’ Senior Information Consultant, Christine Noske, says is often overlooked in digital transformation projects.

A highly experienced information management consultant, Christine boasts more than 30 years’ experience in helping PNG enterprise and public sector navigate through the complex world of compliance, governance, and risk management.

Now at the helm of APCS’ information management division, Christine is passing on her wealth of experience to a new generation of information specialists.

This investment has been quick to show a return, as several government agencies have moved rapidly to take advantage of an ISO-compliant, information management framework to accompany their digital transformation activities.

When it comes to digital transformation projects, Christine explains why it’s not a good idea to simply jump into a scanning project, or procure a document software system, without the corresponding information management framework to support the process: “In PNG’s newspapers recently, or through the rumour mill, we are more frequently seeing articles about, or hearing stories of, information being stolen or ‘lost’ or not being maintained, of not being readable or of poor quality. So how can we address these issues?

Organisations should develop and implement an Information Management Framework,” she said.

In today’s information-driven world, effective information manage-

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ment (IM) frameworks are critical for organisations. These frameworks establish systematic processes to handle an organisation’s information from creation to disposal, ensuring compliance, information security, and operational efficiency.

Christine says a robust IM framework is foundational to effective governance and plays a signif icant role in risk management by safeguarding vital information assets and supporting legal compliance whilst ensuring organisational needs are met.

Information management frame-

works provide structured policies, practices, and technologies for handling organisational information which encompasses both documents and records. While documents typically refer to draft documents, records are evidence of organisational activities and transactions that require secure retention and access over time.

IM frameworks include procedures for the entire lifecycle of information - from creation and storage to access, retention, and disposal. Implementing these frameworks ensures an organi-

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< Page 132 sation’s information is accurate, accessible, and protected.

A comprehensive IM framework includes four key components: • Policy Development: Clear guidelines def ine the handling of information across all areas of the organisation.

• Information Classification: Assigning categories to information to ensure information can be readily retrieved and are also used as a basis to determine access and retention needs.

• Access Controls: Restricting access to sensitive information and protecting against unauthorised access.

• Retention and Disposal Schedules: Structured timeframes for information retention to support compliance with regulations and business requirements.

IM FRAMEWORKS AND GOVERNANCE AND RISK MANAGEMENT Governance refers to policies and structures that guide decision-making and accountability within an organisation. Effective governance frameworks rely heavily on access to reliable, well-managed information. IM frameworks support organisational governance by enhancing transparency, accountability, and operational eff iciency.

• Minimising Information Loss:

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Organisations face potential information loss from cyberattacks, accidental deletions, or natural disasters. An IM framework provides secure storage, regular backups, and recovery processes, safeguarding information against loss and ensuring business continuity.

• Transparency and Accountability: An IM framework ensures information is consistent, complete, and traceable. This transparency supports audit trails, providing clear evidence of decisions and transactions.

Such transparency is vital for internal governance and is often a regulatory requirement for external auditing.

• Streamlining Decision-Making: Reliable data and well-organised information improves decision-making processes.

Management relies on accurate, up-to-date information to make informed decisions. By maintaining easily accessible, accurate information, IM frameworks streamline decision-making, increasing the eff iciency of governance and business processes.

• Supporting Corporate Compliance: An organisation’s adherence to internal policies and external regulations is foundational to effective governance. An IM framework promotes consistent policy application, demonstrating an organisation’s commitment to compliance and governance.

For example, retaining financial records as per regulations builds stakeholder confidence, showcasing a commitment to ethical and legal practice.

• Enabling Continuous Improvement: Ongoing monitoring of IM frameworks provides insights into areas for improvement. Regular audits, feedback loops, and compliance checks help organisations ref ine their IM practices, supporting continuous improvement and adaptability in governance.

IM frameworks are indispensable for organisations aiming to achieve robust risk management and governance. By systematising the handling, storage, and protection of information, IM frameworks mitigate legal, f inancial, and operational risks, enhancing information security, and ensuring compliance.

Moreover, they lay the groundwork for effective governance by promoting transparency, accountability, and informed decision-making.

In an information-centric world, organisations with strong IM frameworks are better positioned to protect their information assets, uphold regulatory requirements, and respond adeptly to evolving challenges, ensuring sustainability and resilience.

For more information on how to get started on your organisations’ digital journey, get in touch at www.apcs.com.pg.

ISSUE 4, 2024 – www.pngbusinessnews.com

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Head Hunters: Executive Search Leaders in Australia & PNG By: ROSELYN EREHE

S

ince 2007, the Head Hunters team has sourced and connected professionals worldwide to match their clients’ talent and cultural needs.

With a mission to connect organisations with top-tier talent, the firm leverages extensive industry expertise and a global database to deliver exceptional results, ensuring clients find the right candidates for key positions time and again.

Head Hunters operates under a clear mission: “We Listen, We Hunt, We Deliver.” This philosophy shapes their recruitment approach, emphasising a deep understanding of each client’s needs.

For businesses aiming to elevate their hiring processes, Head Hunters offers a distinctive and effective approach that promises reliable results every time, using targeted methods that go beyond traditional recruitment.

By focusing on specific skills and experiences, Head Hunters ensures that clients receive a curated shortlist of the most qualified professionals in the market.

With over 15 years of successful placements, Head Hunters’ expertise spans sectors including finance, legal, engineering, sales, marketing, and technology. This broad industry knowledge enables them to meet diverse organisational needs, particularly for senior roles and C-suite positions.

Their commitment to understanding both the candidate and client landscapes in Papua New Guinea (PNG) and Australia allows them to provide effective solutions from day one.

Head Hunters stands out for its strategic approach and unique operational model. Unlike standard recruitment agencies that cast a wide net, Head Hunters employs a meticulous selection process focused on each role’s specific requirements.

This ensures that only the most qualified candidates are presented to clients, significantly reducing time and resources spent on hiring.

The firm specialises in placing expatriate talent in PNG, where sourcing experienced professionals

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can be challenging. By leveraging their network of expatriate specialists, Head Hunters provides skilled individuals ready to contribute effectively from day one.

As demand for high-calibre professionals rises, Head Hunters remains committed to its mission of excellence. By prioritising client satisfaction and focusing on quality placements, they are redefining what it means to be a recruitment partner.

Located at 339 Coronation Drive in Milton, Brisbane, and Monian Tower, Douglas Street, in Port Moresby’s town centre, this boutique recruitment firm not only serves key sectors but also fosters strong client relationships, ensuring ongoing support and communication throughout the hiring process.

Their local expertise and industry connections in both Australia and PNG make them a preferred partner for organisations navigating today’s recruitment complexities.

CONNECTING AUSTRALIAN BUSINESSES WITH TOP TALENT As local recruitment experts, Head Hunters is a trusted name in talent acquisition, transforming how Australian companies find skilled professionals. With a proven track record in matching businesses with ideal candidates, the firm specialises in placing exceptional talent across diverse industries.

Understanding the unique challenges of the Australian workforce, Head Hunters prides itself on an extensive database of skilled Australians. Their services include comprehensive database placements, executive searches, and an innovative express shortlisting service.

The express shortlisting service meets the needs of businesses requiring quick, cost-effective hiring solutions. Upon receiving applications, their local recruitment experts rigorously screen candidates against agreed criteria, delivering the top 3-5 candidates within a swift turnaround time for a flat fee. This approach streamlines hiring and saves businesses valuable time and resources.

Head Hunters is ready to assist, whether businesses require executive recruitment, talent sourcing, or express shortlisting services.

LEADING RECRUITMENT SOLUTIONS FOR PNG Head Hunters is the market leader in recruiting PNG professionals and identifying the best-fit expatriates for PNG, with a proven track record of placing C-suite professionals across various sectors.

The firm has successfully matched organisations with top-tier talent, including Board Directors, CEOs, CFOs, IT Heads, Project Engineers, Sales Managers, Retail Managers, Commercial Managers, Legal Counsel, and Audit Managers across all regions of PNG. Understanding the complexities of clients’ work environments, Head Hunters provides tailored recruitment solutions. The dedicated team is equipped to manage every aspect of recruitment, ensuring a seamless experience for both employers and candidates.

Their services encompass full executive recruitment, headhunting for professional candidates, and express shortlisting services designed to meet diverse business needs.

CONTACT HEAD HUNTERS TODAY For those seeking to enhance their talent acquisition strategies, Head Hunters invites you to start your recruitment journey today. Visit their website to learn more about tailored services and discover how they can help your organisation succeed.

Companies can register job openings or call for more information on finding the ideal candidates for their PNG operations. Businesses in PNG needing assistance with executive recruitment, talent sourcing, or express shortlisting services can reach out at +675 7090 7200.

For companies in Australia, those interested in optimising recruitment processes can contact the team at +617 3368 2523 to explore how they can find the ideal candidates for their operations.

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Why is Oral Health Essential for Staff Well-Being?

I

n high-stakes environments such as mining and shipping, where workers often operate in challenging conditions, the importance of oral health is frequently overlooked.

However, maintaining healthy teeth and gums is not just about having a bright smile; it plays a crucial role in overall employee health, productivity, and cost-effectiveness.

Investing in oral health can yield significant benefits for employees and employers, particularly in industries with high physical demands, and absenteeism can lead to substantial losses.

Let us look closely at the subject and understand the importance of healthy teeth.

TEETH PROBLEMS AND BROADER HEALTH IMPLICATIONS Oral health is often narrowly defined by the condition of teeth; however, research shows that healthy teeth are linked to the prevention of various systemic diseases.

For instance, poor oral hygiene and gum diseases such as periodontitis have been connected to many conditions such as arthritis due to shared inf lammatory pathways, cardiovascular diseases, with increased risk of heart and brain strokes, chronic kidney diseases, cancers (not only oral but also oesophageal cancer), liver dysfunction or respiratory infections when bacteria from decayed teeth can be aspirated to the lungs causing pneumonia.

This list can be much longer and is logical when we realize that teeth are connected through the blood system with all organs of our body: a minor infection of teeth can disseminate harmful bacteria to vital systems and cause dysfunction and life-threatening conditions such as brain abscess.

In high-risk occupations like mining, where employees may already face significant physical challenges, the last thing they need is the added burden of chronic illness related to inadequate oral care.

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Companies can help mitigate these risks by promoting oral health and ensuring their workforce remains fit and capable.

PREVENTING EMPLOYEE EVACUATIONS, REDUCING ABSENTEEISM Consider the scenario of staff working in the remote wilderness. If a worker experiences severe dental pain due to untreated cavities, the repercussions can be dire. Not only can this lead to the need for evacuation, disrupting operations and incurring hefty costs, but it also places unnecessary strain on emergency services.

By prioritizing oral health, employers can minimize the risk of such evacuations—keeping their teams on-site and focused on their tasks. But even without such drastic examples, healthy teeth can still improve the efficacy of the staff by reducing absenteeism.

Absenteeism is a persistent issue in many industries, and dental problems can significantly contribute to it. A study by the American Dental Association found that employees with untreated dental problems are more likely to miss work.

For businesses in the exploration sectors, where every team member’s presence is critical, the cost of absenteeism can be astronomical.

By investing in dental health programs or offering regular checkups, employers can help reduce absenteeism, ensuring that teams are consistently at full strength.

ENHANCING WORK CONDITIONS Healthy employees contribute to a better work environment. Workers not preoccupied with dental pain can concentrate better on their tasks, improving safety and efficiency.

A shipment crew on a vessel navigating rough seas must remain focused to ensure the ship’s and its cargo’s safety. If a crew member is distracted by discomfort, the potential for accidents increases, which could endanger that worker and their colleagues.

THE WAY FORWARD While oral health was an ongoing problem for employers in Papua New Guinea, there is a practical solution now that can help you implement the age-old true principle that “prevention is better than cure.”

One exemplary initiative in promoting oral health in the workplace is the partnership with LAMANA DENTAL CLINIC, which specializes in organizing training sessions for staff on proper dental hygiene and preventive care.

This Dental Clinic Company provides comprehensive dental check-ups and educates employees about oral health and well-being.

The company not only if offering workshops on oral health but also can do dental checks for all your staff and even provide services at work fields reducing costs of transportation of staff to Port Moresby or evacuation for dental treatment abroad that is still preferred by some companies despite poor cost-effectiveness of such practices.

LAMANA DENTAL CLINIC empowers workers to take charge of their lives. This proactive approach not only helps to identify and address potential dental issues early on but also fosters a culture of health and wellness within the organization, ultimately leading to a more productive and engaged workforce, and making employees feel valued and cared for.

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Four Salvages in PNG for Pacific Towing

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acific Towing (‘PacTow’) has been exceptionally busy with salvage projects in its home country, Papua New Guinea. Melanesia’s marine services and salvage market leader performed four salvages across three separate provinces in just two months. The salvages involved international fishing vessels as well as a domestic general cargo vessel.

Three of the recently salvaged vessels had run aground and another was adrift at sea. Two of the vessels were towed back to the capital city of Port Moresby for repairs and the others to Rabaul in East New Britain.

PacTow Manager Gerard Kasnari reports that “vessels running aground reefs, is the leading reason for PacTow’s salvage operations in PNG, and that this is especially so for international fishing vessels.”

Mechanical or engine failure is the second most common reason for PacTow’s salvages.

Unfortunately, an engine failure which was experienced by the cargo vessel PacTow recently salvaged occurred during unfavourable weather conditions on its approach to Port Moresby via Basilisk Passage. Strong southeast winds from the stern pushed the ship straight onto the reef at Fisherman’s (Daugo) Island. Two ASD tugs of 62 and 64 tonnes bollard pull were deployed from PacTow’s nearby tug base to refloat the vessel and tow her into Port Moresby. Another of PacTow’s ASD tugs has since towed the vessel to Batam Indonesia for repairs.

The most challenging of the recent salvages performed by PacTow was of one of the international fishing vessels.

The 71 metre long tuna purse seiner had run aground on a fringing reef at Emirau Island, part of the remote Mussau Archipelago in New Ireland Province. There was grave concern that the vessel would break up and pollute the traditional fishing grounds and coastline, thus severely impacting the local villagers.

PacTow chartered a helicopter to fly in one of its commercial diving supervisors and veteran salvage master, Ian Perrott to assess the technical requirements of the salvage. PacTow has long partnered with Perrott Salvage on nu-

140 PNG BUSINESS NEWS

merous projects throughout Melanesia and also in northern Australia.

This initial stage of the project was also important to build rapport with the traditional landowners.

Kasnari stresses that the establishment of trust and positive community relations is essential to the success of any salvage project taking place on PNG’s remote coastlines, especially when people are living nearby and relying on the reefs and oceans for their livelihood.

Following the necessary planning and logistical arrangements, a tug and PacTow’s salvage team and commercial divers from Port Moresby were deployed to refloat the vessel and tow her to Rabaul. Upon arrival in Rabaul the commercial divers were able to conduct a full hull inspection and provide the necessary reports to the vessel’s owners so that an application could be made for the vessel’s return to her flagged state.

Salvage is a core service of PacTow’s and one that frequently requires long distance towage. Kasnari says that “many of the vessels we assist, whether they are adrift at sea due to some sort of mechanical failure, or have run aground a reef, are operating hundreds of nautical miles from any kind of port let alone major ports where there are the right kind of repair services. Sometimes we’ll tow a vessel to a small regional port for initial repairs and then we’ll do a longer tow back to Port Moresby or Lae.” Depending on the extent of repairs

required and under which country the vessel is flagged, PacTow will also transfer salvaged vessels internationally if that’s what the owners want. At times, they’ll just provide an escort service if the vessel can travel under its own power.

PacTow’s fleet of tugs, especially its larger and more powerful ASDs, are central to its salvage operations and long-distance ocean towage capacity.

Kasnari, points out that the purchase of most of the ASDs has been part of a strategic re-fleeting program that is now two thirds complete.

In addition to owning PNG’s largest tug fleet, PacTow has its tugs strategically deployed at each of its five operations throughout PNG, as well as in Solomon Islands, enabling it to provide a more rapid emergency response service. The company has also established a business in Fiji.

PacTow is Melanesia’s only full member of the International Salvage Union (ISU) and is also a member of the International Spill Control Organization (ISCO).

PacTow delivers excellent, reliable, and safe marine services through Melanesia and the broader region.

A well-maintained fleet, as well as a dedicated and exceptionally trained team underpin the company’s ongoing expansion and success.

PacTow is part of a larger sea and land logistics group wholly owned by Steamships Limited. To learn more about PacTow: www.pacifictowingmarineservices.com.

PacTow recently salvaged this tuna purse seiner from the remote Mussau Archipelago in New Ireland Province, Papua New Guinea.

ISSUE 4, 2024 – www.pngbusinessnews.com

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Peopleconnexion Launches the 2024/25 Salary Guide for Papua New Guinea

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eopleconnexion PNG is excited to announce the release of our highly-anticipated Salary Guide for 2024/25. Every two-years, Peopleconnexion PNG collects salary and remuneration data, specifically tailored for the unique employment landscape and market in Papua New Guinea.

As recruitment & HR specialists in Papua New Guinea (PNG), we found the most common question among clients and employers was ‘can you provide me with guidance on salaries?’. So, since 2014, Peopleconnexion PNG have sold hundreds of copies of the Salary Guide, as a go-to resource to support businesses and employers in making strategic, fair and competitive compensation decisions.

The Peopleconnexion Salary Guide offers a wealth of industry-specific salary data and insights, making it an essential resource for organisations looking to understand, and align, compensation strategies with real, actionable insights drawn from a large and representative data set of professionals and employers across leading industries in Papua New Guinea.

With the contrasting market conditions and the evolving demands of the workforce in PNG, it is essential for employers to stay informed about salary benchmarks and industry standards to make strategic decisions. Our cultural diversity, coupled with abundant natural resources, continues to lure investors to our doorstep.

In addition, the ebbs and f lows of national progress in our key green and brown f ield export sectors have meant the general sectors have had to be more deliberate in their organisational design, building resilience and adaptability to produce improved sustainable outcomes. The days of neglecting the workforce and not investing in them are well behind us, and as we look to the future, we are conf ident that this publication serves as a critical tool for fostering transparency and fairness in compensation practices, ultimate-

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ly contributing to the sustained growth and development of our businesses and workforce.

Managing Director, Kristine Berry has emphasised the value of the Guide: “Our Salary Guide is a result of extensive research and the valuable contributions of numerous businesses across PNG. It is designed to be a practical tool for HR professionals, executives, and directors, enabling them to make data-driven decisions that enhance their organisation’s competitive edge”.

We take great pride in our rigorous data collection process, which ensures the most accurate and representative salary benchmarks.

Every year, we strive to enhance our methodologies and expand the scale and scope of the data we collect. This edition has been developed by collating over 8,500 data points, including more than 3,000 responses from the PNG Salary Survey, completed by both local and expatriate professionals.

We also gathered data from over 25 companies, representing over 5,000 employees in PNG. These clients provided insights on salaries, hiring intentions, benefits, remuneration packages, and general recruitment and HR trends.

Additionally, Peopleconnexion PNG has leveraged on our Contractor and Placement database, including data and roles from over 500 professionals’ salaries in 2024.

Here’s what our 2024/25 Salary

Survey offers employers: • Strategic Decision-Making: Informed budgeting and competitive positioning using industry salary data from over 200 positions across 25 key/major industries in PNG. • Employee Retention data: Tailor competitive packages to specific roles, to combat turnover by understanding general employee retention trends.

• Performance Improvement: Boost motivation and productivity through fair compensation and effective talent management.

• Organisational Planning: Using salary data for future planning, including expansions and restructuring.

To learn more about the 2024/25 PNG Salary Guide or request an invoice, visit the Peopleconnexion website at: https://www. peopleconnexion.com/png-salary-guide-2024-25/

ABOUT PEOPLECONNEXION: Peopleconnexion is a trusted provider of Talent Management Solutions to our clients across PNG and the wider APAC region. Committed to connecting businesses with top talent, Peopleconnexion offers a range of services including executive search, recruitment, contracting/labour-hire, payroll, training and development and HR consulting.

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Sprint Networks: A Decade of Cyber Security Excellence in PNG and the Pacific

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n an era where cyber threats are evolving at an unprecedented pace, one company has stood out in its unwavering commitment to securing businesses across Papua New Guinea and the Pacific Islands.

For over ten years, Sprint Networks has been at the forefront of designing and implementing secure data networks, earning the trust of prominent financial institutions and businesses in the region.

LEADING THE CHARGE IN CYBER THREAT PROTECTION Cyberattacks have become a global concern, affecting organisations of all sizes. Sprint Networks addresses this head-on by providing cyber threat protection on par with the security measures employed by major banks.

Their advanced intrusion detection and prevention systems are not just reactive, but proactively identify and neutralise threats before they can impact business operations.

“What’s impressive about Sprint Networks is their utilisation of premium security products tailored specifically for the challenges in PNG,” says a senior IT manager at a leading financial institution, who remains anonymous for security reasons.

“Their solutions are robust, and their expertise is evident in the seamless integration of these systems into our existing infrastructure.”

DESIGNING SECURE DATA NETWORKS TRUSTED BY INDUSTRY LEADERS At the heart of Sprint Networks’ success is their dedication to crafting secure data networks that exceed industry standards. Their portfolio boasts collaborations with some of the most reputable banks and financial organisations in PNG and the Pacific Islands.

“Our trust in Sprint Networks is built on years of reliable service and innovative solutions,” remarks the CIO of a major bank in the Pacific.

“Their architecture and design have fortified our defences against cyber threats, and their ongoing support ensures we stay ahead of potential risks.”

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OVERCOMING CONNECTIVITY CHALLENGES WITH AWARD-WINNING SD-WAN SOLUTIONS Connectivity in rural and remote areas of the Pacific has long been a challenge, often hindered by unreliable infrastructure and unfulfilled promises. Sprint Networks has flipped the script with their award-winning Software-Defined Wide Area Network (SD-WAN) solution.

Their SD-WAN technology is engineered to provide secure rural connectivity, ensuring businesses in even the most remote locations have access to reliable and secure network services.

Key Features of Sprint Networks’ SD-WAN: • Resilient Connectivity: Utilising multiple carriers and redundant links to guarantee uninterrupted service.

• Optimised Performance: Intelligent traffic management that reduces latency and enhances bandwidth efficiency.

• Integrated Security: Comprehensive protection across all network paths to safeguard data integrity.

“Sprint Networks didn’t just offer us a solution; they provided a partnership,” says a technical director at a regional enterprise. “Their SD-WAN has transformed our operations, enabling us to connect securely with our teams spread across various islands.”

EMBRACING THE FUTURE WITH SECURE REMOTE WORK SOLUTIONS The shift towards remote work has highlighted the need for secure access to corporate resources from anywhere. Sprint Networks leverages the Secure Access Service Edge (SASE) model to meet this demand.

Benefits of Sprint Networks’ SASE Implementation: • Unified Security and Networking: Streamlines management by integrating security and network functions into a single cloud-native service.

• Zero Trust Principles: Ensures every user and device is verified before granting access, significantly reducing security risks.

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< Page 144 • Scalable Solutions: Adapts effortlessly to the changing needs of businesses, accommodating growth without extensive additional investments.

• Enhanced User Experience: Provides fast, reliable access to applications and data, crucial for remote productivity.

“The adoption of SASE through Sprint Networks has been a game-changer for us,” notes an IT consultant working with businesses in PNG. “Their expertise made the transition smooth, and the security enhancements are both palpable and reassuring.”

SASE technologies in the region.

• Premium Products: Deployment of top-tier products specifically designed for the demands of the local environment.

• Customer-Centric Approach: A focus on building strong partnerships and delivering tailored solutions.

THE FUTURE OF CYBER SECURIT Y IN THE PACIFIC As cyber threats continue to evolve, the need for robust security measures becomes ever more critical. Sprint Networks stands as a

beacon of excellence, offering solutions that not only protect businesses but also enable them to thrive in a connected world.

For organisations in PNG and the Pacific Islands seeking a trusted partner in cyber security and network solutions, Sprint Networks represents a blend of technical expertise and heartfelt commitment to the region’s prosperity.

For more information on Sprint Networks and their services, visit their website or contact their team of experts dedicated to securing the future of the Pacific.

COMPREHENSIVE MANAGED IT SERVICES Beyond their cutting-edge products, Sprint Networks offers managed IT services that allow businesses to focus on their core competencies.

Their team provides continuous support, maintenance, and optimisation, ensuring that IT infrastructures run smoothly and efficiently.

A PASSIONATE COMMITMENT TO THE PACIFIC What sets Sprint Networks apart is not just their technical prowess but their genuine passion for serving the communities of PNG and the Pacif ic Islands. Their decade-long journey is marked by a commitment to empowering local businesses through secure and reliable technology solutions.

“Sprint Networks’ dedication goes beyond business; it’s about building lasting relationships and contributing to the growth of our region,” reflects a long-time client, also asking he not be named for security reasons. “Their understanding of our unique challenges and their customised solutions have been invaluable.”

WHY BUSINESSES CHOOSE SPRINT NET WORKS • Proven Expertise: A decade of experience serving the unique needs of PNG and the Pacific Islands.

• Trusted by Leaders: Endorsed by major financial institutions and enterprises for their reliable and secure network designs.

• Innovative Solutions: Pioneering the use of SD-WAN and

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International SOS in Papua New Guinea EMPOWERING SUSTAINABILITY AND RESILIENCE IN MINING

For more than 28 years operating in Papua New Guinea; we have been providing second-to-none medical services support for our energy and mining clients.

WE OFFER INTERNATIONAL STANDARD:

• Medical staffing • Remote site medical clinics • Medical supply services • Clinic and hospital management • Medical consulting

• Medical evacuation services • Occupational health services • Telehealth • First Aid Training • ACLS & BLS Training

REACH OUT TO OUR TEAM TODAY:

E: PNGSales@internationalsos.com | P: +675 302 8000

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L OGISTI C S SOLU TION S Transport | Stevedore | Mechanical | Customs Services Transport Services Trucks & Trailers (3T to 50T) Side loaders -20ft/40ft Deliveires: Rabaul, Kokopo, Tokua, Kerevat, Warangoi Stevedore Services Local and international vessel handling Secure off-wharf storage Mechanical Services Vehicle/equipment service & repairs Auto electrical, welding, GPS installations Customs Services Clearance, NAQIA inspections, permit processing Streamline your operations with our comprehensive logistics solutions. Contact us today and see how we can keep your business moving smoothly.

Agmark Shipping: Reliable Logistics Solutions

rabtrans.cartage@agmark.com.pg

Direct-to-Port Distribution:

Connecting ports across the New Guinea Islands and the Autonomous Region of Bougainville.

Specialized Cargo Handling: Palletized cargo, construction materials, building supplies, bulk fuel, and more.

Charter Services: We offer tailored charter solutions to cater to your unique requirements throughout Papua New Guinea.

Benefit from our extensive fleet, one of the largest in the New Guinea Islands region, ensuring the safe and efficient delivery of your cargo to its intended destination.

shipping@gmark.com.pg

NGIP Haus, Level 1, Portion 1337, Talina, Williams Rd, Kokopo +675 982 9055 P O Box 1921, Kokopo, ENB ISSUE 4, 2024 – www.pngbusinessnews.com Papua New Guinea, 611

www.ngipagmark.com PNG BUSINESS NEWS 147

COMPANY

Progress and Pride – Hastings Deering Celebrates 75 Years of Caterpillar in PNG

I

n celebration of the company’s 75th anniversary as a Caterpillar Dealer in Papua New Guinea, Hastings Deering PNG held an event in Port Moresby to commemorate the signif icant milestone.

Members of the Hastings Deering PNG team, together with members of the broader Pacif ic Islands and Hastings Deering Executive Leadership Teams, came together with some PNG customers, partners and key stakeholders to celebrate all the company has achieved since its beginnings in Lae in 1949.

From speeches to entertainment from local performers, to sharing insights and memorable moments over the years, the evening was a night to remember and an opportunity for many to ref lect on the progress and pride displayed within the PNG business.

Hastings Deering’s Chief Operating Off icer – Pacif ic Islands and Rental Solutions, Jason Smith, said: “Our success in PNG is a ref lection of the efforts of our people and their passion, and our commitment to constantly innovate and evolve through the challenges

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and opportunities that have come our way in this region.”

During the evening, Hastings Deering CEO and Managing Director, Mark Scott, also spoke about the relationships and support the company has had from its customers, and how it has worked in partnership with them to drive progress, not only within their respective businesses, but across the country.

Mark also unveiled the new Hastings Deering PNG brand – A

brand that retains the f irm’s history but also highlights the importance of its presence within PNG and the pride that is evident among the local team.

Today, Hastings Deering PNG is an organisation of more than 300 employees, based across f ive sites in Lae, Tabubil, Lihir, K imbe and its headquarters in Port Moresby.

Congratulations to the PNG Team on 75 years of operations as a Caterpillar Dealer!

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For Reservations: Call Us at: 325 4999|7235 2442 Email Us:

hertz@leasemaster.com.pg

Visit Us:

“

Our Great Services We offer; • Short term rentals (Self Drive & Chauffeur) • Long term leasing (12 months - 36 months) • Safe and affordable staff transportation • Chauffeur drive service with professional drivers • Airport transfers

www.hertz.com.au

Locations Port Moresby Wewak Madang Rabaul Kokopo Kimbe Kavieng Lae

“

With Low Daily Rates We are here to take you there.

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PNG BUSINESS NEWS 149

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PNG BUSINESS NEWS 151

Spaces are available for 4-year-old Transition Class 5-year-old Prep Class

SPIA caps classes at 25 students maximum in order to focus on quality instead of quantity.

With an emphasis on providing education at an international standard, and from a Christian worldview, SPIA is unique in our approach to education in PNG.

Grades 1 to 7 are full, but you are welcome to enquire about standby spacing.

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Contact our enrolment department directly for more information!

www.spiapng.com

spia.enrolment@spiapng.com

+675-7009-1000 ISSUE 4, 2024 – www.pngbusinessnews.com

BECOME A MEMBER TODAY! The Papua New Guinea Chamber of Resources & Energy (PNG CORE) is a non-profit, leading industry association, representing the resources and energy sectors, along with related industries in Papua New Guinea.

Established in 1987, PNG CORE has evolved over the years, earning respect from the wider business community, civil society, the industry itself, and Government.

OUR ROLE » Industry Representation » Policy Advocacy » Capacity Building » Community Engagement

Vision & Mission Statement

Our strategic mission is to create the understanding, generate knowledge and forge relationships which empower Papua New Guinea to capture sustained nation-building benefits from its natural resources.

OUR MEMBERSHIP 100+ companies including major resources and energy companies operating in Papua New Guinea and companies who provide support services to the industry.

Membership Categories: Full Members

24

Major mining, petroleum and energy companies in production, non-producing mineral, petroleum and energy operators including junior mineral, petroleum and energy exploration companies.

Associate Members

41

Companies who provide support services to the major operators or full members. E.g., drilling, testing laboratories, hydraulics etc

Service Members

who provide indirect services to the industry. E.g.,Stationary 68 Companies companies, Printers, cleaning.

For more information please contact our Member Services Team: +675 321 2988 | info@pngcore.org | pngcore.org ISSUE 4, 2024 – www.pngbusinessnews.com

PNG BUSINESS NEWS 153

COMPANY

From Factory to Aisles: ‘Tenkyu-wara’ Now Available at Tango Supermarket

i

Pi Group’s purified 600ml water also known as “Tenkyu.wara,” is now available for purchase at Tango Supermarket, Tokarara, Port Moresby.

Tenkyu.wara and the Tenkyu. initiative aims to promote not only healthy drinking water but also to engage clients and other business entities in a meaningful corporate social effort that empowers Papua New Guineans.

Each purchase of Tenkyu.wara directly contributes to the growth and empowerment of communities within iPi’s operational sphere, reinforcing its commitment to giving back to the communities in which they work. iPi Group has also extended its support to other organizations by purchasing and donating Tenkyu wara as an alternate to cash donations.

154 PNG BUSINESS NEWS

Tenkyu.wara can be sold to raise funds needed by those organizations or used for events such as water stations at fun runs.

Early this year, iPi Group launched a partnership with Business for Health (B4H) to help combat TB and HIV, alleviating their burden on employees, families and communities in PNG. The profits from the sales of Tenkyu.wara goes towards supporting B4H’s efforts.

The mission of our Tenkyu. initiative is to offer a win-win-win solution that offers quality drinking water, improved health and hygiene facilities, and support for our communities.

By choosing Tenkyu.wara, you are not only quenching your thirst but also contributing to a brighter future for PNG. Remember, a little “Tenkyu” can go a long way to changing lives!

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PNG BUSINESS NEWS 155

Advertisers’ Index Ad Works Media AES AG Investments Agmark ANZ APCS Argo Marine Ark Pacific AsiaPac Aspen Medical Atlas Steel PNG Belt Again Beach Resort Bishop Brothers Blue Water Shipping BNG Trading BOC BSP Budget Car rental Business for Health Cameron Construction Services CC Pacific Ltd Consort Coral Seas Hotel Credit Corporation Crossroads Hotel Crown Hotel Datec Don Kyatt Group Dunlop PNG Eagle Exports East West Transport ECM Expac Express Freight Management ExxonMobil FX Business Centre Golden Shipping

155 19 145 147 141 139 17 104 21 72 29 137 11 33 35 135 129 150-151 154 41 90 43 45 7 IFC 116-117 123 84 127 121 53 119 30 111 59 22 26

Green Hills Accomadition Village Hastings Deering HBS Machinery HeadHunters Hertz Hornibrook NGI Huon Logistics ICTSI South Pacific IEA International SOS iPi Island Mobile Hire Cars Islands Petroleum Joint Venture Port Services Jokema`s Inn Kenmore Kina Bank Kramer Ausenco Lae Biscuit Company LAE CCI Lamana Dental Clinic Markham Culverts Marriott Apartments Moni Plus MRA Nambawan Super Nasfund National Institute of Standards and Industrial Technology Nipco Enterprises Ok Tedi Pacific Energy Aviation Pacific MMI Insurance Ltd Pacific Palms Property Pacific Towing Peopleconnexion PNG Chamber of Resources & Energy

61 80-81 107 15 149 OBC 71 67 95 146 79 97 73 83 86 13 6 156 9 128 85 87 89 3 125 91 36 66 82 75 93 77 99 101 44 153

PNG CR 34 PNG Dataco 132 PNG Eden Agriculture Supplies 103 PNG Forest Products 105 PNG IBBM 63 PNG Mining & Petroleum 2, 109 Hospitality Services PNG Ports Corporation 57 PNG Solar Supply 113 Port Moresby Electrical 42 Port Side Business Park 115 QED 5 Remington Technology 46 Resources & Investment Finance Ltd 55 Sago Network 62 Santos 51 Security Systems 49 SGS 69 South Pacific International Academy 152 Sprint Networks 47 Steamships 39 Swire Shipping 8 TE PNG 131 Tips for Kids 133 Tisa Bank 37 Tolu Minerals 4 Total Waste Management 31 Trans Niugini Tours 32 Tropicair 70 Trukai 27 UMW IBC Vodafone 25 Western Pacific Insurance 143 Westpac 1 Woolpert 23 Zenex Drilling 65

PROUDLY PNG with over 45 years experience, Kramer Ausenco delivers exper t service and performance driven results for your project .

Drawing on our vast experience and integrated network of key technical professionals, Kramer Ausenco delivers projects with insight and expertise. Seamless coordination of professional services ensures smooth delivery of projects from concept to completion.

IEPNG, IEAust + IPENZ Registered Professionals

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Master Planning Feasibility Studies Quantity Surveying + Cost Planning

LEARN MORE AT WWW.KRAMERAUSENCO.COM

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