PNG Business News - Issue 4, 2021

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BUSINESS 16 18 26 28

CONTENTS

WORLD BANK, PNG TALK COVID-19, CLIMATE CHANGE MARAPE GIVES BLESSING TO TELSTRA-DIGICEL DEAL PNG, CHINA HASTEN FREE TRADE AGREEMENT SEWAGE TREATMENT IN A CIRCULAR ECONOMY

MINING 34 38

K92 MINING RELEASES STRONG Q3 RESULTS PNG, BARRICK SIGN DEAL TO COMMENCE PORGERA

ENERGY 44 46 48

OIL SEARCH NUMBERS UP IN 3RD QUARTER FORTESCUE TO DEVELOP GREEN ENERGY PROJECTS YOUTH LEAD ECOSYSTEM RESTORATION EFFORTS

COVER STORY

TWM GROUP: MAKING HIGH-QUALITY WATER FROM SUNLIGHT, AIR / page 20

MINING

GOLD REFINERY PNG MILESTONE / page 32

www.pngbusinessnews.com • Issue 4 2021

7

FINANCE 52 54 56 58 60 62

MARAPE: PNG HAS ROOM FOR TWO MORE BANKS MARAPE DELIGHTS IN SEC LEADERSHIP RESOLUTION PNG PORTS PAYS K21M DIVIDEND JAPAN, PNG STRENGTHEN TIES WITH K13M DONATION AUSTRALIA, PNG AGREE ON REGION CARBON MARKET BSP: FX LIQUIDITY RISES IN THIRD QUARTER

ENERGY 46 64

DIRIO, PNG POWER ELECTRIFY PORT MORESBY AUS. ELECTRIC SUPPORT FOR BOUGAINVILLE

CONTENTS

OIL AND GAS

THE WAITING GAME: PASCA ‘A’ GAS AGREEMENT STILL ON HOLD / page 40

COMMENTARY

COMPANY

/ page 10

/ page 66

AUSTRALIA BUYS DIGICEL MONOPOLY

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COMMENTARY

Australia buys Digicel, PNG’s mobile monopoly

By Stephen Howes

I

n October, Telstra announced that it was buying Digicel Pacific. Telstra itself is only paying $270 million, and the Australian government $1.33 billion. Yet, Telstra is obtaining 100% ownership.

The deal is certainly an attractive one for Telstra. But does it make sense for Australia, and for the Pacific?

Digicel has had a transformational impact in the Pacific, but now has too much market power.

As the Telstra release explains, it holds the dominant position in all the Pacific countries in which it operates, except for Fiji, where it is in second place. (See related story on page 26 -- Editor) In Papua New Guinea, which I know best, and which is by far Digicel’s biggest market, the company has a 92% share of the mobile phone market. That makes Digicel effectively a monopoly in PNG. And that is why it is so profitable: like any monopolist, it exploits its market power.

Australian and PNG researchers have been tracking mobile internet prices in PNG since Australia gifted it a new underwater cable . Their conclusion is that since the completion of that cable in December 2019 to today there has been no decrease in mobile internet prices.

The reason is simple: the lack of retail competition.

Michelle Nayahamui Rooney, Martin Davies and I last year exposed Digicel PNG’s predatory loan scheme. Digicel lends phone credit to its customers. They pay it back when they next top up. Our estimate is that Digicel made a 17% return from such loans every week, which is equivalent to an unbelievable 351200% a year.

Is this really the way in which Australia want to engages in the Pacific – owning an enterprise that

keeps prices high for consumers, and rips them off when they are desperate to make a call?

Any monopolist is necessarily engaged in a battle between the consumer and their profits. At some point, Telstra will end up going toe-to-toe with the PNG telecom regulator, NICTA, as Digicel has done several times. It’s going to be awkward for both Telstra and the Australian government.

Many will welcome the investment as a sign of Australian commitment to the Pacific.

However, if we want to invest in the telecom sector in the Pacific, we should be backing alternatives to Digicel, to push prices down and improve services, not buying out the dominant player. Amalgamated Telecom Holdings based in Fiji is the Pacific’s second biggest telecom provider. It is currently planning to enter the PNG mobile market with support from the Asian Development Bank. This is the sort of investment we should be financing.

That Australia has bought Digicel shows the extent to which the Pacific is now viewed through a China lens. That’s unfortunate. China is a massive economic power.

Its companies will have increasing stakes in economies around the world. That is a fact we have to accept.

The Australian government also needs to decide if its only goal is to counter China or if it is still seeks to promote Pacific development. When I was AusAID’s Chief Economist, Digicel was the new kid on the block in the Pacific, and it was successfully challenging stateowned telcos that until then had

been dominant. In 2006, in Foreign Minister Alexander Downer’s flagship Pacific 2020 report, we wrote glowingly about the competition that various Pacific countries had recently started allowing in the mobile phone sector. Our analysis was right then, and remains relevant today. Yet here we are, in 2021, doing the opposite: rather than supporting greater competition in the telecom sector, subsidising the purchase of the incumbent monopolist.

The decision to buy Digicel Pacific should be reversed. If it is too late for that, the Australian government should at least – in return for all its cheap and risk-reducing finance – oblige Telstra to operate Digicel for the benefit of the people of the Pacific rather than solely for its shareholders through an agreement that makes it clear that the Australian company is not only expected to return the cheap loan it has been given, but also reduce prices, and end rip-offs.

This article appeared first on Devpolicy Blog (devpolicy.org), from the Development Policy Centre at The Australian National University. Stephen Howes is the Director of the Development Policy Centre and a Professor of Economics at the Crawford School.

PNG Business News is published independently in the Philippines for the PNG Business community.

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10 www.pngbusinessnews.com • Issue 4 2021

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COMMENTARY

The human cost of the Pacific’s Covid-19 recession

By Dane Moores and Jonathon Gurry

Women selling coconut and bottle gourd in Intoap, PNG. (P. Mathur/Bioversity International/Flickr)

T

he socio-economic impacts of COVID-19 are devastating communities in the Pacific and Timor-Leste as much as the virus itself, and sometimes to an even greater extent.

World Vision surveyed 752 households (with an average of six people per household) in Papua New Guinea, Solomon Islands, Timor-Leste and Vanuatu in late 2020 to better understand the secondary impacts of the pandemic at the community level. The sample size was relatively small (because the survey was done in an emergency context under government restrictions), but still the results provide a valuable insight into the deep and sometimes unexpected knock-on effects of COVID-19 in the region.

Unsurprisingly, loss of livelihoods was the number one concern for the households surveyed.

Almost 60% of respondents had either lost their job, lost income, or resorted to alternative sources of income due to the economic impacts of the pandemic. The top five reasons cited by households for this loss of income were reduced demand for goods/services (29%), closed markets (20%), lack of access to livelihood inputs such as seeds and materials (18%), movement restrictions (15%), and transport limitations (10%).

These disruptions are crippling the same industries that are the traditional drivers of Pacific economies – tourism, agriculture, small- and medium-sized business and money sent home by seasonal workers. Street vendors and farmers have been the hardest hit, with 56% of vendors and 55% of agriculture and livestock workers saying their work was fully or severely affected by the pandemic in the two weeks before the survey.

This data is consistent with concerns raised by the Lowy Institute that the Pacific has been particularly battered by the economic fallout of COVID-19 and that it could face a potential ‘lost decade’ of economic progress as a result. On current projections, average income per person in the

Pacific will not recover to 2019 levels until 2028 unless a multi-year recovery package is urgently adopted.

Loss of livelihoods isn’t just affecting consumer activity; it is having significant ripple effects across Pacific societies. The ‘Pacific Aftershocks’ survey revealed the cruel choices families are forced to make as their incomes collapse, with households resorting to selling assets and even skipping meals to cope: • Only half of households surveyed were able to fully meet their food expenses, with one in four (24%) skipping meals or eating cheaper meals since COVID-19 • More than half (51.7%) of households have drawn down on savings to cope with loss of income • 5% of households had sold productive assets such as livestock or equipment • 14% of households have sent their children to work to help make up for lost income • 14% have engaged family members in begging or high-risk jobs

12 www.pngbusinessnews.com • Issue 4 2021

With tourism expected to be one of the last sectors to recover from the pandemic, there is a real risk that the Pacific could face its own version of ‘long COVID’ – a protracted, slow climb back to economic normality over the next decade, during which the socio-economic impacts above could become a type of ‘new normal.’ But this doesn’t have to be the case.

In the short-term (during the next six months), work is needed to urgently scale up social protection measures (such as cash and voucher assistance and, where this is not possible, food assistance) to help poor families with disrupted incomes meet their immediate needs. In many

To Page 16 >

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BUSINESS

World Bank, PNG talk Covid-19, climate change

C

OVID-19 and Climate Change were the topics of discussion between Papua New Guinea and the World Bank.

According to Ian Ling-Stuckey, the Treasury Minister of Papua New Guinea: “My recent meeting with World Bank Vice-President Manuela Ferro was a very productive one. Like many of my discussions with our international friends, there was intense concern about the growing impacts of COVID-19 on PNG.” “Our friends are worried about both the health and economic impacts, including the loss of jobs and incomes and budget revenues.

Some in the opposition pretend that the COVID-19 global pandemic has not affected the economy, but the rest of the rationale world knows that it has caused enormous damage to PNG and the global economy,” said Ling-Stuckey.

“The World Bank was particularly concerned about vaccine hesitancy in PNG. The Treasurer shared how COVID-19 was at the centre of the Marape Government’s current work and outlined the challenges facing the country. He discussed the substantial increases of 27 per cent in health funding from 2018 to 2021, but the difficulties in having the budgeted funds distributed to needed areas.

Many health services had not accounted for the funds provided earlier, and there were cash flow difficulties.”

The World Bank talked of the importance of a consistent, well-struc-

< From Page 12 contexts across the Pacific region, assistance in the form of cash and vouchers minimises the distortion to markets while ensuring families do not resort to negative coping mechanisms such as eating less or forcing their children to work.

To build back better in the medium and longer-term (the next one to five years), a suite of initiatives should be deployed to stimulate the Pacific economy and rebuild livelihoods. This could include improving access to finance for small businesses, strengthening market systems so they work better for the poor, investing in women’s economic empowerment, and restoring environments through low-cost regenerative agriculture. As a mechanism to coordinate and drive this work,

tured approach to communications that had helped overcome some of vaccine hesitancy issue in other countries, especially in Africa.

“There was also discussion on the global challenge of climate change. The speech by the Prime Minister at the United Nations was welcomed. PNG clearly was blessed with massive forestry and biodiversity richness. The global community was exploring ways to convert these important resources to practical options to support development.

This included ‘carbon credits’ for preserving forests,” he said.

The meeting highlighted the Prime Minister’s deep commitment to seeing PNG’s natural resources as “the lungs for the region.” The emerging green and blue economies are part of the build back smarter approach of the Marape Government in recovering from the COVID-19 pandemic.

“This is why I have welcomed listening to the views of international partners on how to drive this new green/blue agenda, including the integration of the Sustainable Development Goals,” stated the Treasurer.

it is recommended all national and donor governments in the Pacific region, including Australia, work together to develop an Economic Recovery Compact – a roadmap to rebuild the regional economy in a way that leaves no one behind.

By rebuilding livelihoods, starting at the bottom of the economic pyramid, donor and national governments can increase productive capacity, broaden the consumer base, and build resilience across the market system, all while supporting those who need it most.

Just as regional governments worked together to establish the Pacific Humanitarian Pathway on COVID-19, the region should again coalesce around the longer-term recovery effort – because a regional crisis like this requires a regional response. For more information, see

World Vision’s report Pacific Aftershocks: Unmasking the impact of COVID-19 on lives and livelihoods in the Pacific and Timor-Leste.

16 www.pngbusinessnews.com • Issue 4 2021

This article appeared first on Devpolicy Blog (devpolicy.org), from the Development Policy Centre at The Australian National University. Jonathon Gurry is World Vision Australia’s senior policy advisor, leading policy development on livelihoods, food security and climate change. He is a former lawyer with many years of international experience in the aid and development sector. Dane Moores is the Policy Manager at World Vision Australia where he oversees policy analysis and influencing on child rights, livelihoods and food security, conflict and fragility, and First Nations policy.

BUSINESS

P

Marape gives blessing to Telstra purchase of Digicel

rime Minister Hon. James Marape, MP acknowledged the Telstra announcement through a Market Release on the 25th of October 2021 that Telstra will acquire Digicel Pacific.

He acknowledged that this is a commercial transaction that has been concluded under the present regulatory environment which encourages investments in the sector.

The Prime Minister welcomes the investment of up to K4.9 billion (Au$1.85 billion) and stated that all Government and regulatory approvals will take their normal course for the acquisition to be completed.

He acknowledged the massive involvement of Export Finance Australia in this transaction. This was expressed during a recent meeting between the Prime Minister and Telstra Chief Executive Officer Mr. Andrew Penn.

Prime Minister Marape also thanked Mr. Denis O’Brien and Digicel for their investment and dedication to Papua New Guinea since they came into the market in 2007.

Papua New Guinea is Digicel’s most successful market in the Pacific. It has the largest market share in Papua New Guinea, and its takeover by a substantial reputable communications company in the region ensures that there is continuity in the services that support such critical sectors as financial services and banking.

In a letter to Mr. O’Brien on Oct. 27, Mr. Marape said: “Digicel

has been responsible for significant direct and indirect economic and social development across the country.”

“Digicel connected towns and villages, friends, and family. It was Digicel which redefined what mobile telephony meant for our people, and opened up the different market segments that no one thought existed.”

Prime Minister Marape also thanked Telstra for its investment and looked forward to plans to develop the network further, for the betterment of the citizens of Papua New Guinea.

The Prime Minister has asked Telstra to consider future ownership structures which could represent strong and reputable participation of Papua New Guinea institutions and investors, leveraging off on the strong branding that Telstra brings to the market, and on commercial terms.

The Government has recently paved the way for the partial privatisation of state-owned telecommunication assets through comprehensive reform and the merger of the retail communications companies.

Domestic institutional investors will take up majority share and Board control, with Government having limited control and passive shareholding.

The Prime Minister stressed that telecommunications services are critical to Papua New Guinea’s social and economic development.

“Our government remains

Prime Minister steadfast in its determination to Hon. James Marape, MP further liberalise our communications market, through increased competition. We have invested heavily in communications because of the benefits to our citizens through the development of more affordable, reliable, and accessible networks.”

“The cooperation between Telstra and the Australian Government should provide opportunities for the increased use of state-owned wholesale assets to meet service requirements for the betterment of telecommunications across the country,” stated the Prime Minister.

There is an expectation that wherever possible infrastructure sharing will be encouraged, reducing the need to erect several towers at the same location. Telikom will welcome the opportunity to collocate on Digicel infrastructure.”

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COVER STORY

TWM Group is making high-quality drinking water using nothing but sunlight, air

P

apua New Guinea is known for its beautiful surroundings, rich wildlife, and cultures and communities as diverse as the more than 800 native languages spoken in the country. But despite abundant natural resources and recent economic development, nearly 40 percent of the country’s 8.5 million people still have no access to human beings’ most fundamental need: clean, safe drinking water.

It’s an issue that impacts the health of Papua New Guinea’s people, and their prosperity.

Most of the country’s rural population drinks from unsafe sources such as surface water and piped or well water that is exposed to contaminants. In remote communities cut off from the rest of the country and with little to no infrastructure, finding clean, safe water to drink can be a daily struggle, with women and girls often walking over harsh and rugged terrain to collect water for their families. Many businesses and families alike are forced to buy water from distributors, usually in single-use plastic bottles and always at a premium price.

One of those businesses is TWM Group, a Papua New Guinea-owned business with operations around the country, including in remote locations.

With over 130 experienced, fulltime staff in metropolitan and re-

mote locations across the region, TWM Group delivers world-class waste and environmental services for PNG- based industries, including the petroleum, mining, industrial and commercial sector. Since its inception in 2011, the company has prioritised innovation, safety, service excellence, sustainability and social good.

“Sustainability is the heart of our business, but with minimal safe and reliable sources of drinking water in the area, we were reliant on buying plastic bottled water and transporting it to our remote worksites, at great expense to our business and the environment,” said Kori Chan, TWM Group’s Managing Director.

“It’s a problem we worked on for years.”

The solution, Chan says, has come in the form of new, game-changing water harvesting technology.

Developed by SOURCE, Global, PBC, SOURCE® Hydropanels use only the power of the sun to produce premium drinking water on site and from the surrounding atmosphere.

Powered by solar energy, the Hydropanel draws pure water vapor out of the sky and onto a patented hygroscopic material that’s incredibly efficient at attracting and absorbing H2O molecules. The system converts these molecules into liquid water, which

20 www.pngbusinessnews.com • Issue 4 2021

is collected in a reservoir inside the panel and mineralized with magnesium & calcium, creating high-quality, great-tasting drinking water that’s delivered directly to homes, businesses, community distribution centers and bottling operations.

By tapping into the renewable water in the atmosphere, SOURCE creates fresh drinking water where it’s consumed, driving down the costs and carbon emissions that come with bottling and transportation. Over its lifetime, a single panel can offset up to 54,750 single-use plastic bottles, with water than rivals premium brands at a small fraction of the cost.

The technology works entirely off the grid, with no additional infrastructure needed, and can produce water even in the most remote locations and the driest places on earth.

TWM group has installed SOURCE® Hydropanels at its remote worksite in Roku, where conditions are arid and drinking water is scarce. The installation replaces the plastic bottled water the company relied on for years and is expected to cut drinking water costs by 25 percent.

The installation is the first phase of a larger TWM Group drinking water initiative. The company plans extend the project to the nearby Roku village, where more than

To Page 24 >

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COVER STORY

< From Page 20 2,500 indigenous villagers live, and to roll out SOURCE® Hydropanels to its clients, many of whom also operate in remote, water-scarce locations and are looking for cost-effective, environmentally friendly solutions.

As part of its well-established community development program, TWM will also bring SOURCE technology to vulnerable, water-stressed areas across the country.

Papua New Guinea has made strides in safe water access but is still one of 129 countries not on track to achieve the United Nation’s Sustainable Development Goal 6: By 2030, Ensure Availability and Sustainable Management of Water and Sanitation for All. For Chan and TWM, that’s not acceptable.

“We believe businesses must lead the way to increasing our progress toward SDG 6, but with such widespread, complex water challenges, we need sustainable, distributed, and highly cost-effective technologies,” Chan said.

“SOURCE fulfills those demands and helps us meet our sustainability goals

and drivers. It is user friendly and easily deployed, provides healthy cost savings and can literally create drinking water where none exists.”

TWM Group’s purpose is to create a better reality for the people, environment, and culture of Papua New Guinea.

The installation of SOURCE® Hydropanels is a representation of that purpose in action, and the two companies share a deep commitment to create a positive impact on the world.

SOURCE Global’s mission is to perfect drinking water for every person, every place and, by producing water locally and where it’s needed most, the company is creating resilience, well-being, economic security for the communities it serves.

“We applaud TWM Group for their innovative spirit and focus on using new and innovative technology to solve the challenges global businesses, at-risk communities, and the planet face,” said Rob Bartrop, chief revenue officer, SOURCE Global.

“Their work is a clear and effective example of Thinking Globally, acting locally and we are proud to be one of their partners.”

By tapping into the renewable water in the atmosphere, SOURCE creates fresh drinking water where it’s consumed, driving down the costs and carbon emissions that come with bottling and transportation.

Over its lifetime, a single panel can offset up to 54,750 single-use plastic bottles, with water than rivals premium brands at a small fraction of the cost.

24 www.pngbusinessnews.com • Issue 4 2021

KOREA

JAPAN

CHINA

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INDONESIA

ICTSI SOUTH PACIFIC PAPUA NEW GUINEA

ICTSI South Pacific terminals are at the forefront in Papua New Guinea’s expanding global trade.

ICTSI SOUTH PACIFIC PAPUA NEW GUINEA

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The pioneering public-private-people partnerships have paved the way for communities to be actual shareholders in the ports.

With ICTSI South Pacific’s long-term commitment towards sustainable development, the projects are shaping future-ready ports and truly transformative growth.

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Motukea International Terminal Porebada Rd., 121, Port Moresby NCD, Papua New Guinea +675 7190 0395 / +675 7190 0202 www.ictsispl.com info@mit.com.pg

BUSINESS

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PNG, China hasten free trade agreement

he Chinese Ambassador to Papua New Guinea, Fanhua Zeng, said the process of hastening a free trade agreement between the two countries has begun.

According to Fanhua, this would assure that the two nations’ commercial relations would improve following the Covid-19 outbreak. PNG exports roughly 300 million tonnes of liquefied natural gas to China each year, as well as other goods including lumber.

“It is important that even in this time we give some impetus to our trade relations,” Fanhua said.

“For example, we want to have this free trade agreement with PNG. It’s a process we have to negotiate but we want to accelerate it (so that) when the pandemic is over, we can have (better) trade relations.

“PNG is rich in resources like gas, oil, timber and fisheries and China has a big market.

“So, we can cooperate very closely and both countries can benefit from it.”

Because of climate change, on timber, he said, “we have to do something in the area of forestation”.

“We know that PNG wants to do something in that area so we can cooperate not in direct import and exports of timbers, but we can

26 www.pngbusinessnews.com • Issue 4 2021

cooperate in the production (of timber) we can export to China.

“There is a big market in China and the products of PNG are very important and very good.

“I see great potentials in trade and economic relations between our two countries.”

On 2 November, Chinese Ambassador Zeng Fanhua (right) held a virtual meeting with Minister for State Enterprises William Duma. Both sides exchanged views on further deepening practical cooperation between China and PNG. Photo: China Embassy in PNG

BUSINESS

Sewage Treatment in a Circular Economy

T

hink of two words, sewage and nutrients. Now create a mental picture that puts them together in a context that makes sense for you. For most people, the picture they create is some form of liquid that is beneficial to the growth of plants.

Yes, effluent reuse on landscapes is one of the biological nutrients that can spin out of sewage treatment, but there are so many more nutrients, and the majority of them are known as technical nutrients derived from rethinking and improving business processes.

It is organisations, like Hydroflux Epco where thinking of design as an opportunity to develop technical nutrients who will make the real difference in combating climate change. Developing technical nutrients is achieved by designing out wasteful processes, keeping products in operation longer and considering processes to regenerate natural systems.

Biological nutrients are the natural by-products of a process that can be consumed by something.

Sewage treatment has two of these in effluent and sludge. Effluent can be reused on landscaping, toilet flushing and dust suppression while sludge can be reused after composting, as a soil amendment for projects such as reforestation of mining leases.

Technical nutrients are the alternative business processes that contribute positively to reducing the negative impact of a product on its environment. In this instance

we are referring to a product’s environment as its impact on people, the planet and prosperity.

These three perspectives are known as the triple bottom line and Hydroflux Epco considers all three when designing projects for decentralised solutions in water and wastewater. Decentralised solutions are often very remote and if not considered appropriately they can have a significantly negative impact due to the tyranny of distance.

Using the Hydroflux Epco RoadTrain® decentralised wastewater system as the example we can demonstrate both biological and technical nutrients being generated. Biological nutrients were covered above so now let us look closer at the technical nutrient side of the butterfly diagram in the infographic.

One of the first circular design objectives is to keep a product in operation for as long as possible.

The robust construction of the RoadTrain® using 6mm thick steel combined with advanced coatings means the Hydroflux Epco plant is designed to last more than thirty years. Most cheap alternatives are lucky to last ten to fifteen.

The manufacture of the RoadTrain® is performed as close to the client site as practical, often in the destination country, which provides economic value to the local community and reduces unnecessary CO2 generated by excessive transport.

Decentralised projects also

28 www.pngbusinessnews.com • Issue 4 2021

require consideration of the installation and commissioning phase as an opportunity to find hidden nutrients. In the Hydroflux Epco case, local representatives and client crews are engaged to provide installation and commissioning services. A reduction in logistics is achieved by taking advantage of cutting-edge communication to allow engineers on site and in the office to execute a project without leaving their place of origin.

A question often asked, is how to tell the difference between an organisation in the circular economy, and one locked in the linear traditional economy. To find the answer, look for an organisation like Hydroflux Epco who deliberate how their design is going to be prolonged, reused, refurbished and ultimately recycled after it leaves the front gate.

The question you should ask yourself is; will the product continue to produce technical nutrients once the project is completed? If the answer is yes, then you have found a circular product design.

Using the Hydroflux Epco RoadTrain™ as the example.

Earlier we outlined how the RoadTrain is designed to be robust, but the full design has to be considered as well. Hydroflux Epco extends their design thinking to the selection of quality peripheral equipment, appropriate level of automation (as little as possible for very remote sites) and the simplification of the maintenance routine.

With appropriate selection there is

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BUSINESS

Migration Plus offers Year 10 Virtual HS online for PNG students

M

igration Plus is a leading migration firm in Cairns, in the Far North Queensland region of Australia, providing professional migration advice to students, individuals, government, businesses and corporate groups including the mining, hospitality, tourism, agricultural and air services industries.

Migration Plus are also Education Agents with Qualified Education Counsellors on their team and we represent several reputable universities and colleges across Australia, including Education Queensland International (EQI) for student enrolments.

We work closely with EQI and have successfully assisted PNG students enrol in schools across Queensland and have assisted with visa applications for the students for many years.

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< From Page 28

of compliance as a plant made in the 2020’s. A classic example is a mining client in PNG whose Epco RoadTrain® was installed in 1982.

In circular fashion, that system was renovated in 2021 and additional process equipment added so it can remain in service for another 20 years being the design life of the mine.

Expansion of capacity is yet another technical nutrient often overlooked. When expansion is forgotten, a take, make, waste, linear business thinking, of throwing away old equipment occurs. This happens because future expansion is not considered during the initial project phase.

Feedback loops during the design phase ensure that Hydroflux Epco decentralised solutions start with looking at possible

a higher likelihood of a plant lasting generations if local operators can maintain it easily.

The equipment itself is not the only consideration when thinking about technical nutrients.

Over time, conditions of a site change. Companies get sold or closed and equipment gets removed so it is often critically important for a system to be able to be relocatable and thus reused.

Additionally, it is near impossible to predict future compliance regimes so the wastewater plant must have the ability to be augmented if it is to continue to be of value.

RoadTrains® are in service for generations and that means a plant installed in the 1980’s is unlikely to have the same level

30 www.pngbusinessnews.com • Issue 4 2021

ADYTON BOOSTS GOLD OUTPUT 88%

Adyton Resources Corporation has reported an 88% increase in total gold ounces across the company’s 100% owned Fergusson Island Gold Project and Feni Gold and Copper Project, located within Papua New Guinea’s renowned “Rim of Fire”.

Fergusson Island maiden Indicated Resource of 175,000 gold ounces at 1.33 grams/tonne (g/t) and Inferred Resource increased by 33% to 540,000 gold ounces at 1.08 g/t. Feni Island Inferred Resource increased by 123% to 1,460,000 gold ounces at 0.75 g/t.

Adyton Chairman, President and Chief Executive Officer, Mr Frank Terranova said the updated resource estimates would provide a strong basis for technical studies to be undertaken in preparation for submitting a Mining Lease Application for the Fergusson Island Project by the end of calendar 2022.

“When we acquired the Fergusson Island and Feni Island Projects, we saw a unique opportunity to create a portfolio of complementary projects, each of which demonstrated clear pathways for accelerated development,” Mr Terranova said. expansion plans. Of course, all contingencies can’t be considered but a simple design concept such as leaving room on the site and in equipment design for future stages improves the lifecycle outcome.

Finally, how will the materials be recycled when the lifecycle of the plant has come to an end?

The answer to this question boils down to material selection, and a steel-based plant of any form is a better choice than no recyclable alternatives.

Climate change is here to stay, and we all have an obligation to do what we can to improve our impact on people, the planet and prosperity by considering how we and our organisations design equipment through the lens of both biological AND technical nutrients.

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MINING

Gold Refinery project deal milestone for country – PM The National Gold Refinery and Mint Project Deal, signed recently

by Papua New Guinea Prime Minister James Marape, is a milestone agreement for the country and a key success in the implementation of his government’s “Take Back PNG” program, according to Marape.

“The project has started and will establish, for the first time in Papua New Guinea, a downstream processing and value-adding industry for gold, one of the country’s mostvaluable natural resource exports,” he said.

“The project will put Papua Guinea on the world gold map, so it is rightfully recognised in both gold mining and gold refining industries, and in global precious metals and financial markets, as one of the world’s most-important gold-producing countries.”

PM Marape stated that downstream processing of natural resources in PNG, such as gold, forests, and fisheries, is critical to the country’s economic future and job creation, and that it is a core priority of his government.

“This has been talked about for decades, but it is my leadership peers in present Government who are now pushing for this major in-country downstream processing project,” he said.

“It is the first of many to come.

“Until now, all the economic and social benefits from refining and value-adding to Papua New Guinea’s gold, have been exported to foreign refineries and for the benefit of foreign countries.

“The project will ensure that we account for all gold produced in PNG and export out finished products for companies and individuals who are in the gold industry.”

For the first time, all earnings, taxes, new US dollar foreign exchange inflows, employment, and related advantages from gold and precious metals refining will stay in PNG, according to PM Marape.

“For the first time, PNG will be recognised on the world stage, including by international refined gold regulatory bodies, such as the London Bullion Market Association (LBMA),” he said.

“PNG will become known and recognised as a producer of international standard: gold and precious metal investment bullion bars, gold and precious metal legal tender investment coins; and other refined gold products.

The initiative, according to PM

Marape, would create four new world-class firms in the state: National Gold Refinery – It will purify all of PNG’s gold and precious metals and manufacture gold and silver bullion bars to international standards; National Mint – minting its own currency and the new National Bird of Paradise legal tender coin, as well as investment grade gold and precious metal currency coins; National Gold Bank – to offer the PNG gold mining sector with dedicated gold and precious metal banking and trading services; and National Gold – PNG gold and precious metals, as well as its value-added bullion bars, investment coins, and other goods, will be sold to worldwide investors.

“This is a high-end value-adding business and for a gold producing nation, we want to move into this space,” PM Marape said.

“No one has dared to dream this dream, but as a Government fighting to earn more from our resources, this low-hanging economic opportunity is now harnessed .”

PM Marape stated that the state will be a 50:50 joint venture equity partner in the project from the start, with 30% of the State Interest going to local alluvial miners and landowners.

“The State also has the right to buy majority or total control of the project at a time into the future as defined in the project agreement with Refinery Holdings who are

32 www.pngbusinessnews.com • Issue 4 2021

partners in this project,” he said.

“Refinery Holdings will be the project manager, operator and financier of the project until the State decides to buy control.”

PM Marape stated that the National Gold Corporation will pay the full corporation tax rate (currently 30%) on profits from the start.

“Refinery Holdings will pay full dividend withholding tax on its dividends received from National Gold Corporation, “ he said.

“The project will generate substantial new dividends and corporate taxes paid to the State – currently projected at approximately US$800 million over the first 15 years of operation.”

The initiative, according to PM Marape, would produce a lot of employment and possibilities.

“Up to 200 new jobs will be created during the construction phase of the refining and minting facilities on land leased within the LNG and Petroleum Park, and at Jackson International Airport,” he said.

“There will be up 350 new tertiary level jobs in the operational phase and there will be significant training and skills transfer to local employees for decades to come.

“And there will be the creation of many local ancillary industries, including gold tourism facilities, and long-term supply requirements from local contractors and suppliers.”

PM Marape stated that the

Prime Minister James Marape and his ministers.

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MINING

K92 Mining releases strong Q3 financial results Achieves Stage 2 expansion run-rate throughput in September

K

92 Mining Inc. is pleased to announce financial results for the three and nine months ended September 30, 2021.

John Lewins, K92 Chief Executive Officer and Director, stated: “Despite 2021 being one of the most challenging years our Company has faced due to the impact of the COVID-19 pandemic, it has also featured numerous major accomplishments, setting the operation up for a very promising near and long-term.

On production, the processing plant achieved Stage 2 Expansion run-rate throughput in September averaging 1,100 tpd. Importantly, the plant delivered a notably finer than required grind size and also set multiple daily records well in excess of the 1,100 tpd design. This has continued in October, with a new daily record of 1,538 tonnes processed on October 24, 2021.

The strong performance of the process plant, resulted in the approval of a Stage 2A Expansion, which is expected to increase throughput a further +25% to 500,000 tpa. Commissioning is expected in Q3 2022, with a low estimated plant expansion capital cost of US$2.5 million. The expansion is expected to provide a considerable boost to our ability to self-fund the Stage 3 Expansion.

Operations are also expected to get a considerable boost via the commencement of a new mining front at the Judd Vein System.

Long-hole drilling is underway and production stoping is planned to commence this quarter. The proximal location of Judd to much of Kora’s mine-infrastructure, makes for low cost and highly efficient mining and exploration of the system.

On exploration, we are now at a major inflection point, where the vast majority of activities will be focused on resource growth, as infill drilling is complete at Kora for its resource update later this year.

The resource update due in Q4 will underpin the Stage 3 Expansion Definitive Feasibility Study in the first half of 2022.

A majority of underground drill rigs have now commenced drilling at Judd, and we plan to increase this further. On surface, drilling for the first time is underway at Kora South, significantly increasing our ability to step-out along strike. And, drilling at Blue Lake is also progressing and with the backlog of holes to assay and core-log at Kora and Judd almost complete, we expect to provide an update in the near future.

On COVID-19, our pandemic resiliency continues to improve.

The vaccination roll-out has made considerable progress with over 55% of our workforce having received at least their first dose. As our vaccination uptake increases, we expect to progressively ease other COVID-19 mitigation measures.

International travel restrictions have also begun to considerably ease, particularly within parts of Australia, enabling more efficient personnel movement. Importantly, this has enabled access to specialized project contractors, in most cases for the first time since the pandemic began, to provide additional operational support and also commence several highly accretive projects near-term, including the commissioning of the gravity circuit for the Stage 2 Expansion.

Lastly, once again, I would like to thank the workforce at the Kainantu Gold Mine. Their dedication and resourcefulness have been extraordinary. The support of the Government of Papua New Guinea and also the Government of Australia continues to be a major factor in our success as well.”

< From Page 32

class, professionally-managed, gold and precious metals refinery in-country and dedicated to servicing all their refining and gold trading requirements.

“A local world-class gold refinery means that the time gap between gold production and sale is significantly reduced as unrefined gold does not need to be shipped from PNG to foreign refineries.

“This may mean some PNG mining opportunities will now become economic, and it may increase the profitability of existing mines through a reduction in processing cost.

“The project also includes arrangements by which current and future PNG gold miners will transition from foreign gold smelting and refining arrangements to refining of all PNG gold and precious metals through the National Gold Refinery.

“The State will provide a statutory guarantee of the gold delivery and related obligations of the National Gold Corporation Group

to assure PNG gold miners and international banks, investors and gold industry counterparties that their gold and dealings with the Group are safe and secure at all times.

“The National Gold Refinery will, by law, provide globally-competitive refining costs, outcomes and benefits for PNG gold miners now and into the future.”

“The project, and the significant long-term foreign investment in the project by the private sector, demonstrates regionally, and internationally, that my Government’s foreign investment policy is effective and that PNG is a mature, stable, and safe investment destination for exploration, mining, and production of gold, and refined gold.”

“I look forward to work with the investors, our local SME and alluvial gold miners and landowners, as well as those in the big mines to ensure that this refinery and mint is beneficial to all parties in the mining and gold business.

new world-class specialized gold refinery in PNG will assist smallscale, local alluvial gold miners (i.e. landowners).

“Landowners can expect to receive better pricing for their gold from the National Gold Refinery and will avoid having to deal with ‘industry middlemen’ or having to accept the discounted gold price offered by middlemen for their gold,” he said.

PM Marape stated that fresh and considerable foreign money inflows will boost PNG miners and the economy.

“The project and its gold products are priced in US Dollars,” he said.

“The National Gold Refinery will have an estimated initial US$4 billion per annum gold throughput, and more as gold production increases, every year for many decades to come.

“The PNG gold mining industry will benefit from having a world-

34 www.pngbusinessnews.com • Issue 4 2021

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MINING

MINING

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PNG, Barrick sign agreement to commence Porgera mine

he Porgera Project Commencement Agreement was signed by the State and Barrick Niugini Limited, paving the way for the commencement of mining activities at the Porgera Mine.

Prime Minister James Marape confirmed the government’s commitment to reopening Porgera Mine as soon as possible, with BNL as an equity partner and operator, and vowed to provide BNL the certainty it needed to go from care and maintenance to mine reopening.

He said that the commencement agreement is the master agreement that details the parameters agreed to in the historic Project Porgera Framework Agreement signed in April, while the Shareholders Agreement, Operatorship Agreement, and MDC are still being finalized.

The following are some of these terms: On a 53/47 basis, PNG stakeholders and BNL will share the economic advantages achieved during the mine’s lifetime.

BNL will provide the necessary funds to reopen the mine.

A large number of landowners who are the customary owners of the land where Porgera is located will get an increase in equity; and After ten years, the State will have the option to purchase the remaining 49% of the mine from BNL at fair market value.

“The commencement agreement provides a framework for

their negotiation and will help accelerate progress on the remaining steps so that Porgera can be reopened,” Marape said.

He urged all parties, particularly the Porgera landowners and community, to band together and work with the government and BNL to establish the proper conditions for the mine to resume, including addressing the Porgera valley’s peace and order situation.

“We look forward to the setting up of the New Porgera Project Company and for work to begin in preparation for the processing of gold ore at the soonest possible date.

Porgera’s restart helps PNG get back more for our people, creating local jobs and contracts in partnership with one of the world’s leading mining companies,” Marape said.

On behalf of BNL shareholders Barrick and Zijin Mining, Barrick chief executive officer Dr Mark Bristow urged all parties to redouble their efforts and complete the remaining agreements as soon as feasible.

“As we move toward starting up mining operations, our common task is to negotiate expediently and in good faith so that Porgera, a mine with enormous potential, can resume production and take its place as an engine of the PNG economy and contributor of foreign exchange once again,” Dr Bristow said Dr. Bristow and Marape agreed that their negotiating teams will continue to work closely together in the coming weeks to ensure that all remaining criteria for the resumption of operations at the Porgera Mine are satisfied as soon as feasible.

ST. BARBARA’S SIMBERI ADVANCING WELL WITH PRE-INVESTMENT OF SULPHIDE PROJECT

A

ccording to St. Barbara’s last quarterly report, the company’s Simberi facility in New Ireland is doing well with the pre-investment phase of their sulphide project.

“The pre-investment phase is advancing well, with initial new fleet purchases completed and the front-end, engineering and design (Feed) study package awarded and on track for delivery in the third quarter of the next financial year,” the company said.

“The final investment decision remains a third quarter of next financial year as well.

“Concentrate sale and purchase

agreements for the majority of the life of mine gold concentrate have been finalised with a number of global trading companies, subject to a satisfying standard conditions precedent of a positive investment decision by the board and the project achieving commercial production.”

The Conservation and Environmental Protection Authority is reviewing the social and environmental impact statement, according to the corporation.

“The two addendums relating to further trials and testing of waste rock management and the deep sea tailings placement (DSTP)

38 www.pngbusinessnews.com • Issue 4 2021

footprint were submitted during the quarter.”

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OIL AND GAS

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The Waiting Game: Pasca ‘A’ Gas Agreement still on hold

winza Oil Limited’s Pasca A Gas Agreement is yet to be finalized as per their media release last August. Honorable Keregna Kua, Minister for Petroleum, announced in Parliament a seven-day period for the State Negotiating Team (SNT) and Twinza Oil Limited to meet to finalise drafting of the Pasca A Gas Agreement. Unfortunately, the deadline expired on the 17th August without the SNT making themselves available to meet with Twinza. [1] From Twinza’s media release last 24th August 2021, “This lack of engagement, with a Company which has invested over K350 million in PNG to date and confirmed Pasca A commerciality through drilling the A4 well, is disappointing. Twinza will continue to honour the deal struck on the 6th July and announced by the Prime Minister, the Hon. James Marape on the 13th July 2021.”

“As stated by Minister Kua on the 13th July, Twinza can again confirm that the Gas Agreement delivers all of the Government’s stated objectives from the project and would provide the highest State take of any resource development in PNG, over 60% of project value (55% nominal State take).”

“Twinza is continuing to seek clarity from the Minister for Petroleum, who is responsible for closing-out the routine drafting review, when there will be support for continued foreign direct investment on Pasca, and that the State will honour the deal of the 6th July 2021. The Gas Agreement has been ready for signing since this date.”

The company’s former CEO and Chairman, Ian Munro said, “Despite the Twinza team being on standby 24/7, and the clear instructions from the Minister for both sides to meet within the specified 7 days, the SNT has not made themselves available even once for a final page-turn of the agreement.”

“Twinza remains hopeful that both parties can honour the terms and agreement of the 6th July 2021 and that we can move immediately in to the FEED phase of the project. The Company has a history of delivering in PNG: suc-

In September 2017 Twinza spudded the Pasca A4(AD-1) well with an objective to complete appraisal of the Pasca A field and suspend the well as a future development well for the first offshore field development in PNG. The well not only confirmed the pre-drill expectations but exceeded them, proving that the field resource was more than sufficient to underpin an economic development.

[Photo courtesy of Twinza Oil Limited]

cessfully drilling an appraisal well on the Pasca field, being awarded a life-of-project environmental permit and now agreeing fiscal terms which deliver the highest State take of any resource project in PNG. With a supportive Government, we look forward to delivering PNG’s first offshore oil and gas production in 2025.” [1] With the current hurdles and delays in the approval, what is the current status of the project?

PNG Business News recently interviewed Roppe Uyassi, Twinza Oil Limited Country Manager for Papua New Guinea. He stated, “Twinza Chairman, Stephen Quantrill, has been in PNG for five weeks between October and November engaging with Government and various stakeholders as we look to constructively work together with the State to finalise the Pasca A Gas Agreement and bring it to a conclusion in the near term.”

Going back in July 2020 when discussions on the Gas Agreement started, Uyassi mentioned, “The Company is committed to working collaboratively with the Government to deliver an agreement that allows the Project to move forward toward development, whilst providing a higher State take than previous projects. Once the Pasca A Gas Agreement and the Petroleum

40 www.pngbusinessnews.com • Issue 4 2021

Development License are in place, the Project is well positioned to enter the Front End Engineering and Design phase later this year.”

Since last year, several events took place on the road to finalise the Pasca A Gas Agreement, which at this point is still pending.

One of the most notable incident was last 16 April 2021 when the PNG Government informed Twinza about their increased demand from the Pasca A Gas Agreement.

The change entails that the Government requires a 6% Production Levy in order to sign the agreement. This is now 4% more than the Production Levy that was agreed as part of the comprehensive terms for Pasca A, negotiated by the State Negotiating Team and announced by the Prime Minister, Honorable James Marape as of Sept. 24, 2020. “The additional levy which has been requested would make the Pasca A Project unfinanceable for any investor,” from the

Roppe Uyassi, Twinza Oil Limited Country Manager for Papua New Guinea

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OIL AND GAS < From Page 40 media release of Twinza on their website. [2] The changes in the agreement were formally announced by the Petroleum Minister through a letter dated 4 Feb. 2021. The letter indicates the Government’s demand to raise fiscal take to 55% to 60% nominal share. This value is actually 75% to 85% of the actual project value, which would make Pasca A unviable for investors and financiers alike.

From the company’s media release last April, they stated, “In expectation that the Gas Agreement would be signed by yearend 2020 after the Agreed Terms were announced in September by the Prime Minister, Twinza has maintained its Project team for FEED-readiness. The signing of the Pasca A Gas Agreement this month would have allowed the Project to immediately move into the Front-End Engineering and Design phase, with a final investment decision in 2022 and first production in 2025. Given the continued delays, Twinza will now stand-down the Pasca Project team until there is clarity on terms and execution of the Gas Agreement.”

Former CEO Munro expressed his dismay for the changes in the agreement. He said, “Twinza was awarded the Pasca license nearly 10 years ago as a foreign direct investor and since this time the Company has spent more than K350 million in developing a field that was discovered over 50 years ago and passed over by other industry players.”

“It is disappointing that at the closing stages of a drawnout 10-month Gas Agreement process, the State is now seeking to again revise terms to ones that are demonstrably unacceptable

to any investor. Consequently, whilst Twinza remains committed to progressing the Pasca A Project on a fair and equitable basis, the Company will streamline its costs whilst awaiting a Gas Agreement signing on acceptable terms. We remain focused on developing PNG’s first offshore oil and gas field and opening up the Gulf of Papua to much-needed investment as soon as circumstances allow.”

As of June 2021, he further said, “The Company remains committed to delivering Pasca A, PNG’s first offshore oil and

Pasca A Phase I development concept [Photo courtesy of Twinza Oil Limited]

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OIL AND GAS < From Page 42 gas project. However, it appears the 12-month long process may be stalled yet again because the State has not communicated to Twinza the agreement terms which would be acceptable. It is time to bring this matter to a conclusion such that the Project can move forward and Twinza is on standby to execute the agreement on the Petroleum Minister’s desk”. [3] The following month in a media conference, there were promising results when the Papua New Guinea’s Prime Minister, Honorable James Marape, announced that the negotiations for the Gas Agreement had been successfully concluded on the 6th of July 2021. The media conference to announce the good news took place on 13th of July 2021. However, they were faced with further delays when the expected July 29th signing did not push through.

And then after a month, Twinza reported that the PNG State is not honouring terms in Pasca A Gas Agreement which were announced by the Prime Minister last 13 July 2021.

From Twinza’s media release, “The PNG Government and Twinza agreed final terms on the 6th July 2021 for the Pasca A Gas Agreement, which were reflected in an agreement that both parties committed to use. Subsequently, the Prime Minister, the Hon. James Marape announced on the 13th July 2021 that negotiations had concluded, with a scheduled initialling of the agreement on the 19th July and signing on the 29th July 2021.”

“After a month of silence on the State-side, the SNT Chairman returned an extensive mark-up of the agreement late on the 6th August. This document bears no resemblance to the agreement of the 6th July 2021, containing over 2,400 changes in only 76 pages, and is essentially a new agreement which was provided ‘with endorsement of SNT, State Solicitor and Minister Kua’. The agreement would be unacceptable to any investor and introduces new fiscal terms and inexplicable new conditions, several associated with Kumul Petroleum, that would make the Pasca A Project, or indeed any project in PNG, non-commercial and unfinanceable. Twinza can provide a copy of the State’s new agreement on our website to ensure full industry transparency.”

Finally, to conclude, “For reasons unknown to Twinza, it would appear that the Prime Minister’s strong support for the Pasca A Project, expressed most recently at the media conference of the 13th July 2021, is not being actioned by the State Solicitor and is being openly undermined by elements within the SNT.” [4] Despite all these obstacles, Twinza Oil Limited remains hopeful to successfully launch in the near future PNG’s

first offshore oil and gas production. -Marcelle P. Villegas for PNG Business News Reference: [1] Twinza Oil Limited media release (24 August 2021). “Pasca A Gas Agreement Yet To Be Finalised Despite Instructions From The Minister For Petroleum”. https://www.twinzaoil.com/media-releases/2021/08/24/pasca-a-gas-agreement-yet-to-be-finalised-despite-instructions-from-the-minister-for-petroleum [2] Twinza Oil Limited media release (19 April 2021). “PNG Government Changing Terms Ahead of Pasca A Gas Agreement Signing” https://www.twinzaoil.com/ media-releases/2021/04/19/png-govern-

ment-changing-terms-ahead-of-pasca-agas-agreement-signing [3] Twinza Oil Limited media release. (2 June 2021). “Twinza Awaiting Response from Petroleum Minister”. https://www.twinzaoil.com/mediareleases/2021/06/02/twinza-awaitingresponse-from-petroleum-minister [4] Twinza Oil Limited media release (9 August 2021). “PNG State Not Honouring Terms in Pasca A Gas Agreement which were Announced by Prime Minister 13th July 2021”. https://www.twinzaoil.com/ media-releases/2021/08/09/pngstate-not-honouring-terms-in-pasca-agas-agreement-which-were-announcedby-prime-minister-13th-july-2021

www.pngbusinessnews.com • Issue 4 2021 43

OIL AND GAS

Numbers up for Oil Search in third quarter

O

il Search delivered another strong quarter of production for Q3 2021 just after its merger with Santos, its chief said in October.

Peter Fredricson, Acting CEO, said: “Oil Search delivered another strong quarter of production, which was up 5% on the previous quarter, demonstrating the resilience of our operations and sustained commitment to the safety of our people and maintaining safe and reliable production. Operating revenues were up 12%, supported by strong growth in oil prices.”

“Earlier in the quarter, the PNG LNG project participants approved the full funding of the Angore project which, along with the Associated Gas fields, forms an important part of the gas sequence and underpins maintaining plant capacity beyond 2030.”

“We have made good progress across our growth projects with the ramping up of activity in the Papua LNG project, as it prepares to enter pre-FEED before the end of 2021 ahead of a joint venture decision to enter FEED in 2022.”

“We are also pleased to be another step closer to the development of the P’nyang gas resource with the recent signing of a HOA between ExxonMobil and the PNG Government outlining the framework for negotiating a fully termed Gas Agreement before the end of 2021. The P’nyang project represents a valuable back-fill opportunity within the PNG LNG gas sequence and another opportunity for Oil Search to be involved in a key project that will support the PNG economy and its people.”

“In Alaska, the Pikka Phase 1 project has progressed technical work towards FID. As previously communicated Oil Search and its co-venture partner are focused

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on ensuring the appropriate preconditions, including funding, are met prior to taking FID targeted in 1H22, with resulting first oil planned for 2025.”

“While the absolute focus of our workforce remains on safely delivering our strategic objectives, important steps were also taken during the quarter to advance the opportunity presented by the proposed merger with Santos. The potential benefits of a combined entity remain clear, with the merged entity expected to sit amongst the world’s 20 largest global oil and gas companies, bringing greater access to capital markets to enable funding for new and existing opportunities.

Importantly, the merger is also expected to create greater alignment across the LNG growth projects in PNG which would continue to support jobs, development, and investment in PNG.”

“Our outlook for the 2021 full year remains positive as we tighten our production guidance and maintain our operating cost guidance despite the additional costs associated with the management of the impact of COVID-19. Both LNG and oil markets remain strong, with spot LNG markets continuing to exhibit high volatility and record highs which is a supportive environment for market soundings in respect of new medium-and-longer term LNG sales contracts.”

“While our focus remains on mitigating the risk to our people and operations through strict adherence to COVID-19 protocols and the promotion of vaccination uptake in our workforce, Oil Search will also continue to play its part in PNG’s fight against COVID-19 through the provision of community vaccination and logistical support.”

PNG ADAMANT ON STOPPING LOGGING BY 2030

he Papua New Guinea Special Envoy and Minister for Environment Conservation & Climate Change, Hon. Wera Mori, MP, says PNG is adamant on ceasing all logging, on a large scale, completely by 2030.

He said the collective decision

by COP26 to stop deforestation entirely by 2030, is an agenda PNG has always advocated for under the leadership of Prime Min-

ister, Hon. James Marape, MP. “It is now a formal Government policy to ban round-logging by 2025 and ban logging entirely by 2030.

“We didn’t know that this would be the position taken up by COP26, here in Glasgow. However, this is a blessing in disguise for Papua New Guinea.

Over the years these COP summits have become exaggerated,

44 www.pngbusinessnews.com • Issue 4 2021

where every year we collaborate and come up with ideologies to mitigate climate change; yet nothing practical is being done, in addressing global climate issues,” Minister Mori said.

He said COP26 must change.

It must not be a forum for talking and conceptualizing. It must move forward and walk the talk.

“Papua New Guinea has decided to take action, simply because,

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ENERGY

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Dirio, PNG Power delivering electricity to Port Moresby

he 100 per cent national owned Independent Electricity Producer, Dirio Gas and Power Limited and PNG Power Limited, has announced that it would begin delivering power into the Port Moresby grid at the end of this month.

Dirio and PNG Power directors inked an agreement that allows Dirio to deliver power to the PNG Power system in Port Moresby.

In November 2020, Dirio completed and commissioned a 45-megawatt (MW) power plant in Caution Bay, Central Province, but was unable to supply electricity due to PNG Power’s failure to build a transmission line or to have sufficient capacity and stability on existing transmission lines to take the full supply as stipulated in the Power Purchase Agreement.

This is the first phase of the entire deployment, according to Dirio Chairman Isaac Lupari.

He said Dirio and PNG Electricity collaborated to tackle the grid transmission network stability issue in Port Moresby

and inked another key agreement on October 20, 2021, allowing power delivery to commence on October 30, 2021.

“There has been some delay due to technical issues, but those have now been resolved, and I thank our Directors and everyone for being patient.

“This business is owned by landowners. I am proud that our people are getting into the downstream processing business.” Lupari said.

He stated that their goal is to deliver consistent, inexpensive power to people in the capital city while also generating a long-term profit.

Dirio Electricity is owned by landowners and provincial governments, according to Hela Governor Philip Undialu, who stated it was a risky move to enter the power market.

“For too long, we have left it to foreigners to dominate the electricity sector in PNG. That must change. Papua New

Guineans must get into this sector and I am glad we have taken the bold stand with this initiative,” Undialu said.

He commended the Mineral Resources Development Company’s board of directors and management, as well as Dirio, for their efforts in completing the project.

PNG LNG Project landowners, as well as the provincial governments of Hela, Southern Highlands, Gulf, and Central, own Dirio.

FORTESCUE TO DEVELOP PNG PORTFOLIO OF GREEN ENERGY, HYDROGEN PROJECTS

F

ortescue Future Industries (FFI) is partnering with Papua New Guinea (PNG), one of the most renewable energy-rich countries in the world, to develop multiple large-scale green energy and green hydrogen projects.

FFI’s Papua New Guinea Fortescue Future Industries Ltd, and the State of Papua New Guinea recently signed a Master Development Agreement (MDA) that will enable FFI to undertake feasibility studies to develop up to seven hydropower projects and 11 geothermal energy projects in PNG. These projects would generate renewable electricity for the purpose of producing green hydrogen and green ammonia, creating a significant new domestic energy and export industry for PNG, which currently heavily relies on imported oil.

FFI Chief Executive Officer, Julie Shuttleworth AM said, “Our

green energy vision for PNG will lead to more jobs, a stronger economy, thriving communities and importantly, lower emissions for Papua New Guinea.

“We share Prime Minister Marape’s vision that PNG can be at the forefront of developing hydropower and geothermal resources for the emerging global green hydrogen industry.

“We are looking forward to continuing our work alongside the Government of Papua New Guinea to develop these important opportunities,” Ms Shuttleworth said.

FFI’s identified projects in PNG could produce up to 2.3 million tonnes of green hydrogen per year once completed.

Fortescue Chairman Dr Andrew Forrest AO said, “These projects will completely transform PNG to

46 www.pngbusinessnews.com • Issue 4 2021

become a leader in the world’s renewable energy transition.

“We are committed to ensuring PNG’s communities benefit from growth and development through these projects, including training, employment and business development opportunities,” Dr Forrest said.

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ENERGY

Youth lead ecosystem restoration through mangrove planting

By Marcelle P. Villegas

I

n celebration of World Environment Day last June, there were 600 school children who took part in planting 700 mangrove seeds along the coastline of Riwo, Madang Province. The celebration’s theme for this year is “Ecosystem Restoration”.

The mangrove planting activity was made possible through the Child-Focus Disaster Risk Reduction (CFDRR) project. The project aims to bring awareness to children the importance of mangrove in protecting the environment along the coastlines. The roots of the mangroves sustain life in the aquatic ecosystem by providing safe shelter and breeding area for some species of fish.

CFDRR is a key long-term strategy for sustainable and resilient development to ensure that the future generations can cope with climate change. CFDRR programs and projects are implemented in various countries and adopted by UNICEF as well.

According to Dehaan Lapawe, project coordinator of CFDRR, “Mangrove trees in swampy or coastal areas provide a safe and rich habitat for different fish stocks to rest, feed, recover and breed. Fish bring protein and income for families.”[1] Lapawe emphasised that matured mangrove trees also provide shelter for birds and other animals. Moreover, mangroves reduce the effect of waves from the body of water, therefore, preventing soil erosion. He also mentioned that mangrove seeds can also serve as a food source in some parts of Papua New Guinea.

“This is one way to be disaster ready. The community must continue this initiative to reduce soil erosion and help protect their schools and community.”

The CFDRR project in Riwo village is a project of World Vision, in partnership with Madang Provincial Disaster office. It is funded by the Australian government through the Australian Humanitarian Partnership (AHP).

With regards to the brewing effects of climate change, the study and research titled “Beyond Barriers: Integrating disaster risk reduction and climate change adaptation in the Pacific” (July 2021)

reports and verifies that climate change results in rising sea level.

If this increase in sea level intensifies through time, it will cause other major environmental problems like soil erosion and further damages to the environment. “Beyond Barriers…” is a study and research

by Jessica McCommon, Jessica Lees (Humanitarian Advisory Group), Cedric Hoebreck (World Vision Australia), and Linda Vaike (Independent Consultant).[2] According to Humanitarian Advisory Group, who featured the transcript of “Beyond Barriers” and described its findings and purpose, “The case for integrating disaster risk reduction (DRR) and climate change adaptation (CCA) to minimise loss and damage, reduce vulnerability and enhance resilience continues to grow. This is against a backdrop of increasing frequency and severity of disasters worldwide and the recognition that, at the community level, the distinction between DRR and CCA is artificial.”

“Linkages between the two policy fields, coming belatedly to communities’ holistic understandings of what is driving their exposure to risk and how to manage it, have driven researchers, policymakers and practitioners to consider how to more closely align approaches to produce better outcomes for crisis-affected populations.”

“The case has been made in academic and practitioner literature, agency reports and emerging policies, yet what it means from a community perspective to inte-

48 www.pngbusinessnews.com • Issue 4 2021

grate DRR and CCA has received little research attention.”[2] To address the potential environmental damages of climate change in the future, this CFDRR project aims to prevent and counter climate change impacts “through climate change adaptation and disaster risk reduction”.

In this initiative, they chose to focus on children whom they consider “the most vulnerable”. [1] According to Sixtus Balen, head teacher of Malmal Primary School, the initiative of CFDRR is “timely” because the rising sea level due to climate change and strong sea surges are inevitable forces of nature, and that the people in the community are vulnerable to those occurrences.

He also mentioned smaller and low-lying islands are disappearing and now the mainland is exposed to destructive soil erosion.

Balen stated, “Mangrove trees in Riwo and Malmal swamps and coastal areas were cut and used by locals for building houses, fuelwood, making canoes and other artefacts of cultural importance over time. Unfortunately, no replacement has been made.”[1] He also noted that mangroves are essential “as a buffer to protect the shoreline and [will provide] a breeding site for fish”. Such knowledge on the mangrove’s importance might is new for most students. Thus, he thanked World Visions CFDRR project for this mangrove planting initiative which brought deeper environmental education and awareness for the youth.

Mangrove seedlings [Photo credit: Sarangib, from Pixabay]

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OIL AND GAS < From Page 48 From an article by Papua New Guinea Post-Courier, Madang Provincial Government’s disaster manager, Rudolph Mongallee, expressed that “his office cannot perform as it should to counter the impacts of climate change and disaster preparedness within the province because of reasons beyond his control.”[1] He did mention that the ongoing partnership with World Vision is “peaceful and cordial” and he is very supportive of the initiative.

Mongallee stated, “I’m only wishing that if World Vision can extend to the other six districts, because those districts that World Vision has already entered, I see that they’re already disaster prepared.”

The young students who took part in the mangrove planting also expressed their commitment to look after the mangrove seedling and appreciation that such initiative gave them a chance to directly look after their local marine ecosystem.

One of the students named Stephanie said, “Planting mangrove is important because it can protect us from rising sea levels and be a home for small fish to breed.” Another student, Benedict, said “I will look after my tree and my village and school.”

The future looks bright with the young generation taking an active part in addressing the adverse ef-

< From Page 44 our landmass covers one per cent of the global landmass and is host to seven per cent of global biodiversity, in terms of marine and territorial landmass.

“For us, it has been quite a challenge, simply because, despite the fact that we host 30 per cent of the remaining primary rainforest, we have become the lungs of this planet, drawing in carbon dioxide, emitted by industrialized countries.

“That has been spelt out in our National Determined Contribution, which we submitted on 18th December 2020, having been one of the first few countries in the world to do so,” Minister Mori said.

He said PNG now has all relevant enabling legislations to basically walk along that path.

“The biggest question now is, monetization of our efforts – how do we get compensated?

“We just simply can’t ban logging in PNG, as it is a $1 billion industry, where the industrialized world expects us to continue to be the carbon filters of the earth, when they are only good for

fects of climate change. All it takes are consistent and well-planned steps like this mangrove planting initiative which was organised

by World Vision and other partners.

Reference: [1] (20 Sept. 2021) Papua New Guinea Post-Courier website. “Children Plant Mangroves To Address Climate Change”. Retrieved from - https://postcourier. com.pg/children-plant-mangroves-to-address-climatechange/ [2] McCommon, Jessica; Lees, Jessica; et al. (July 2021). “Beyond Barriers: Integrating disaster risk reduction and climate change adaptation int he Pacific” Retrieved from - https:// humanitarianadvisorygroup.org/insight/ beyond-barriers-integrating-disaster-risk-reduction-and-climate-changeadaptation-in-the-pacific/ Photo credit: Top photo - by sarangib, Pixabay - https://pixabay. com/photos/mangroveseedlings-plantationcreek-249920/ [2] “Beyond Barriers: Integrating disaster risk reduction and climate change adaptation int he Pacific” by McCommons,

Lees, et al. -- Humanitarian Advisory Group - https://humanitarianadvisorygroup.org/insight/ beyond-barriers-integrating-disaster-risk-reduction-and-climatechange-adaptation-in-the-pacific/

talking but not being responsible for our climate predicaments,” Minister Mori said.

He said Papua New Guinea is a member of the global community so when we decide to do that, we know what the costs are, having done our part.

“We would like to see the industrialized world or the first world who are responsible for the emission of greenhouse gases, come up with financial and economic development assistance packages.

“So, if the UN or the industrialized countries wanted us to terminate logging in our country entirely, they would have to make up for the revenue we raise from that particularly industry, annually,” Minister Mori said.

He said for other members of the Coalition for Rainforest Nations

(CfRN), I will also advocate on their behalf. They too must be compensated.

“It is completely unfair that we are the victims of the climate problems we have not caused,” Minister Mori said.

He also had brief pull aside meetings with the British Prime Minister, Boris Johnson, and His Royal Highness Prince Charles, at the margins of the COP26 Leaders’ Summit, in Scotland.

50 www.pngbusinessnews.com • Issue 4 2021

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FINANCE

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Marape: PNG has room for two more banks

rime Minister James Marape stated that the country has room for one or two more banks.

Marape said the Government was looking at the Bendigo bank model where firms may operate under a franchise when introducing the PNG Think Tank’s online crowdfunding concept last week to gather funds to establish a PNG small-to-medium enterprise (SME) bank.

PNG Think Tank’s crowdfunding campaign has already garnered over K30 million in pledges as a first step toward entering the banking industry.

“This idea is not bad and there is space for one more or two more banks in our country,” Marape said.

“For us, a nation of some nine million people, the volume and turnover as far as business is concerned has a need for more banks and the concept of crowdfunding for a bank that is owned by Papua New Guineans is not out of place in the present economic and banking needs.

“It is a step in the right direction.

“Whatever you want to do, so long as you do it correctly and the platform is equal to anyone who wants to participate and should they have a share in this business venture, open it up, everyone gets involved and mobilise your funding.

“As far as public policy is concerned, for a seed capital, the Government can step in if the

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intention is honest.

“There is also a concept that we are looking at called the ‘Bendigo’ concept in Australia where you have one licence but you have franchises who are operating and this can be an alternative.

“Our Government is in the business of trying our best at retaining money in country.

“All Forex (foreign exchange) we mobilise come in and we try to retain the money and capital that doesn’t go outside and that

includes owning banks that has addresses in our country.”

The head of the PNG Think Tank group, Samson Komati, said there was a large gap in the banking industry, which was currently dominated by commercial and micro banks.

According to Komati, there are no banks for agriculture, logging, fisheries, SMEs, and other industries, thus the SME bank was created to fill a need and reach out to the unbanked.

BSP GROUP RAKES IN K698 MILLION

espite continuing to face reduced economic activity, BSP Financial Group Ltd has issued its unaudited September 2021 results, with a Net Profit After Tax of K698 million.

COVID-19 continues to have an impact on enterprises in all nations, although tourism-dependent countries have been hit more than others due to limited or non-existent international travel.

BSP Group CEO, Robin Fleming said: “With overall system lending in all countries contracting as the business became more cautious with investment decisions, interest on loans had reduced somewhat compared to the previous quarter, but non-lending income remained strong, based on more transaction growth and increases in merchant

activity.

“Costs had been contained through a combination of more favourable exchange rates during the quarter and a considered approach to discretionary expenditure.”

On October 18, Kumul Consolidated Holdings, Nasfund, Nambawan Super, Teachers Savings & Loans, MVIL, Petroleum Resources Kutubu, Credit Corporation, and Fiji National Provident Fund received an interim dividend of K0.39 per share, totalling K182 million.

The price of BSP shares on the PNGX jumped to K12.31, while BSP shares on the ASX were trading at $5.00. BSP also made a significant contribution to PNG’s business tax collection, paying K295 million in company tax last year, accounting for around 17% of total company tax

52 www.pngbusinessnews.com • Issue 4 2021

paid in the country.

Finally, CEO Fleming emphasized BSP’s commitment to providing traditional branch-based services to customers in all provinces of PNG, citing recent sub-branch upgrades such as Koroba and Namatanai, the re-opening of Kerema in September, and upgrades of Palmalmal before the end of 2021 and Telefomin early in 2022.

FINANCE

Marape delights at Securities Commission leadership resolution

P

rime Minister James Marape has expressed his delight at the news that a four-year leadership dispute at the Securities Commission of Papua New Guinea has been settled.

The commission is in charge of the organic capital market’s growth and development. According to the PNG National Stock Exchange (PNGX) Markets Ltd, this has been a significant impediment to the growth of the capital market in the nation and the capacity of enterprises, large and small, to access capital.

The PNG Securities Commission stated in a statement that the industry has been plagued by uncertainty for the previous four years due to a power struggle between two former commission chairmen over the governing body’s leadership.

As a result, it is critical that the leadership of this regulatory body is not misunderstood by the stakeholders.

Over the last four years, that leadership has been lacking, and attempts to resolve it have been hampered by court orders.

Marape stated that his government could now proceed with the merger of Oil Search and Santos, as well as efforts to liberalize and restructure Papua New Guinea’s National Stock Exchange.

At Marape’s request, Christopher Taylor Hnanguie, a former chairman who had initiated legal action, agreed to drop the case.

Hnanguie, a former Asian Development Bank economist with 25 years of experience in the industry, was named executive chairman in mid-2017.

He was removed from office,

< From Page 46 FFI’s proposed Purari Wabo Hydropower project and West New Britain Geothermal project have made significant progress with scoping studies and early-stage pre-feasibility works completed.

FFI is a values-based business committed to enriching communities through economic growth, gender equality of employment and education and ending exploitation and modern slavery.

“We are proud that our investment contracts place human rights, environment and then economics, in that order, in every discussion we have with every

however, less than a year into his term, prompting him to seek legal redress.

“My noble intention to create the commission and develop our capital market and the securities industry was disrupted by an unlawful decision to remove me from office,” Hnangui said.

“While my actions at the time I made the decision to fight was a matter of principle, in hindsight, I now recognise that our acts or omissions have, over the years, hurt the securities industry.”

At the request of the prime minister, Hnanguie claimed he had subsequently reconsidered his position.

On the other hand, PNGX government in the world,” Ms Shuttleworth said.

“FFI will also undertake extensive community, landowner and stakeholder engagement to develop a detailed national content plan as part of its stakeholder investment strategy.”

FFI’s projects will be conducted in full compliance with PNG laws and adhere to strict international best practice standards relating to the conservation and protection of the environment, biodiversity and cultural heritage, occupational health and safety, anti-bribery and corruption, anti-money laundering and eradicating modern slavery.

54 www.pngbusinessnews.com • Issue 4 2021

chairman David Lawrence said: “PNGX looks forward to developing a constructive and respectful working relationship with the PNG Securities Commission under Salmon-Minak’s leadership.

“We hope to work quickly and constructively with SalmonMinak to assist the commission to create and develop a promising future for the capital markets and securities industry. We will also move quickly to modernise the listing rules for the current market and to establish new markets and products.”

Meanwhile, the commission will continue under the leadership of current acting executive chairman Robert Minak.

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PNG Ports pays K21m dividend

he State has received a dividend of over K21 million from PNG Ports Corporation Limited for the fiscal year 2020. This payment of K20,921,465.00 comes on the heels of a net profit after tax of K83,685,862 last year.

PNG Ports Board Chairman Kepas Wali said the payment was made as a result of the company’s good financial management and operating standards.

Despite being severely impacted by the virus, he also stated that PNG Ports was in a

secure financial position.

“Even though the current economic conditions are tough, coupled with the pandemic and the unstable performances in the overall throughput volumes at the ports, we have performed well.

“Our cash flow for this year is positive,” Mr Wali said.

He praised the board, management, and employees for continuing to generate results while maintaining prudence, accountability, and openness in all aspects of their work.

PNG Ports, according to

Wali, is a robust and viable allstate-owned organization (SOE) dedicated to the Government and its people and has been working relentlessly to modernize the ports in order to improve efficiency and production.

“During this period of uncertainty, PNG Ports is investing in its employees, and not only the port facilities.”

The presentation of a dividend to Kumul Consolidated Holdings, the holding company of SOEs, was observed by William Duma, the Minister for State Enterprise.

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56 www.pngbusinessnews.com • Issue 4 2021

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FINANCE

Japan strengthens ties with PNG with K13m in road equipment

P

NG has received a K13 million donation from Japan for road construction equipment.

Japanese Ambassador Kuniyuki Nakahara and Minister of Foreign Affairs and Trade Soroi Eoe signed the agreement on paper.

Eoe expressed gratitude on behalf of the people and government of PNG, particularly the recipient provinces, to the people and government of Japan.

“Despite COVID-19 induced Japan’s economic slowdown and revenue reduction, Japan continues to provide assistance to PNG,” he said.

“This demonstrates the deep friendship between our two countries.

“This equipment will be used in the road infrastructure construction sector, consistent with the Marape Government’s effort towards connecting PNG.” Ambassador Nakahara said: “Japan is committed to working together with PNG for the

development and the welfare of its people and Japan believes that road is one of the most important infrastructures to develop the country.

“Therefore, from 2013 to 2017, Japan started transferring its technical know-how on road construction and maintenance to the Department of Works and has also provided construction equipment from time to time. The machines under the previous phase of the grant assistance signed in 2019 have just arrived in PNG, which is a total of 18 pieces of equipment, worth about K10 million.”

“I am pleased to share with you that the grant assistance which we are going to sign today is the outcome of the summit meeting between former Prime Minister of Japan, Yoshihide Suga, and Prime Minister James Marape in June.”

During the meeting, Prime Minister Suga pledged to offer additional grant support of 24 road construction equipment.

The equipment includes an excavator, a motor grader, and a wheel loader and so on. They are worth ¥400 million, roughly equivalent to K13 million. We are confident that this equipment will be utilized by the Department of Works to the maximum effect and maintained well for long-term use,” Amb. Nakahara said.

Since 1969, TERRAIN TAMER have been designing and manufacturing parts with one thing in mind – to get our customers home. The right part could save you from being stranded far from home.

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58 www.pngbusinessnews.com • Issue 4 2021

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FINANCE

Australia, PNG agree to create accessible carbon market for region

A

ustralia and Papua New Guinea have agreed to join forces to create an efficient and accessible carbon market for the region under the Indo-Pacific Carbon Offsets Scheme.

Following talks with PNG’s Special Climate Envoy and Minister for Environment, Conservation and Climate Change, Hon. Wera Mori in Glasgow, Minister for Industry, Energy and Emissions Reduction, Hon. Angus Taylor announced PNG would be one of the first international partners to join the scheme.

Minister Taylor said: “Papua New Guinea has been longstanding leader on climate change, making a major contribution to the preservation of global forests. Australia is a world leader in emissions measurement and inventory management,” Minister Taylor said.

“The partnership will see our two countries share expertise to ensure Papua New Guinea is internationally recognised as a source of high-integrity carbon mitigation outcomes.”

Minister Mori said: “The signing of the MOU this morning between Papua New Guinea and Australia on Cooperation to Build Capacity for Participation in Global Carbon Markets is significant for us as a country to engage in the Indo-Pacific Carbon Offset Scheme which Australia is launching today.

“Papua New Guinea’s engagement in this scheme is critical given our on-going work on REDD plus in preparation to develop carbon markets and the country’s engagement under Article 6 of the Paris Agreement once concluded including our conservation efforts.

“While the negotiations are

yet to be concluded in Article 6, Papua New Guinea agrees to a robust carbon trading system that is fair and promotes environmental integrity and sustainable development.

“The Government of Papua New Guinea congratulates Australia on the launch of the Indo-Pacific Carbon Offset Scheme and assure of our commitment through the Australia -PNG Climate Action Plan.”

Under the Indo-Pacific Carbon Offsets Scheme, Australia will share technical expertise in carbon accounting with countries in our region to enable them to meet new Paris Agreement emissions reporting obligations.

The scheme will deliver renewable energy and nature-based solutions projects to support neighbouring countries to reduce emissions and grow their economies.

Australia has also entered an early partnership with Fiji.

“Our partnership with Papua New Guinea will include a focus on encouraging private sector participation in carbon market activities, and emissions reduction projects that showcase Papua New Guinea’s potential for high-integrity offsets,” Minister Taylor said.

Minister Taylor said he and Minister Mori also discussed ambitions for COP26, and bilateral cooperation on energy access and on blue carbon.

The discussions and signing took place on the side-lines of COP26 on Wednesday 03 November 2021 and builds on the existing Australia PNG Climate Action Plan and complemented by recent passage of the Climate Change (Management) (Amendment) Bill 2021.

RANSOMWARE ATTACK HITS FINANCE MINISTRY

A

cyberattack on Papua New Guinea’s finance ministry briefly disrupted government payments and operations, officials said Oct. 28.

Ransomware infiltrated and compromised a core server at the department of finance last week, hampering the government’s access to foreign aid, its ability to

pay cheques and carry out other basic functions in the midst of a spiralling Covid-19 surge.

“The department has now managed to fully restore the system, however, because of the risk, we are playing safe by not allowing full usage of the affected network,” said John Pundari, acting treasurer.

60 www.pngbusinessnews.com • Issue 4 2021

Pundari said the department “did not pay any ransom to the purported hacker or any of its third party agents. We have managed to restore normalcy.”

The attack took place in the middle of the night on October 22.

The platform controls budgeting and financing for the entire Papua New Guinea government.

FINANCE

USAID increasing aid to PNG, Ling-Stuckey confirms

T

he United States Aid to Papua New Guinea and the Pacific is increasing. The treasury minister of Papua New Guinea, Ian Ling-Stuckey, stated this.

“In discussions in Washington, USAID have confirmed plans to increase their support for PNG and the broader Pacific. This is a welcome development. It reflects the Marape Government’s work in rebuilding international partnerships to grow the economy and improve lives” stated the Treasurer Ian Ling-Stuckey.

“I know the benefits of USAID projects in our country. In my electorate, USAID has been supplying water tanks for safer and more accessible water. Women in one village no longer have to walk 3 kilometres with very heavy water buckets just to supply their families with this most basic need. This project was so good that I have directed some of our DDA funding to maintain the water tanks and pipes and taps. This is very welcome support from USAID. “The expansion of USAID includes new facilities such as the Development Finance Facility. Support

is provided for private sector investments in the economy through taking an equity in projects or providing loan guarantees. This is a good example of assistance leveraging up resources with a focus on the private sector to encourage growth and sustainable development.

“The discussions also covered USAID support for microfinance, the Indo-Pacific Business Forum, and technical assistance including on trade and investment options. Support for climate change is a particular priority, as are programs to protect the land and enhance biodiversity.

Such support is very much in line with the priorities that Prime Minister Marape set out in his recent address to the United Nations.

USAID is also providing 500,000 doses of vaccines to the region as part of a “Sleeves Up” campaign.

Given the Delta outbreak, improv-

ing access to vaccines is vital and welcome” stated the Treasurer.

“There was another interesting aspect to the meeting, and one PNG can learn from. All four USAID officials at the meeting were women. This was a very welcome change to the usual male dominated meetings I experience in PNG. We must better use the enormous abilities of our women in government positions, and encourage them to move to more senior roles.”

Treasurer LingStuckey receives a briefing from USAID Officials at the Ronald Reagan Building and International Trade Center in Washington DC.USA.

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FINANCE

A

BSP: FX liquidity rises in Q3

ccording to Bank South Pacific Financial Group Ltd, foreign exchange (FX) liquidity has increased since the second quarter of the year, owing to robust commodities prices mixed with project-specific and donor foreign currency inflows (BSP).

The PNG Kina has stayed constant versus the US dollar for the third consecutive quarter, according to the bank’s Pacific Economic and Market Insights Q3 2021 Report, although FX reserves at the end of June increased by 7% quarter on quarter, owing to favourable inflow.

According to the report, overall foreign exchange reserves were US$2.49 billion (about K8.5 billion) as of June 30.

In June, reserve balances rose 7% quarter over quarter, with positive inflows overcoming the Central Bank’s monthly intervention of $50 million (about K171.6 million).

While FX liquidity increased by 17% in September, BSP Group general manager for treasury Rohan George noted FX turnover increased by 18% during the previous six months, owing to robust commodity

prices, particularly for oil, copper, palm oil, and coffee.

“Firmer commodity prices, combined with increased project-specific and donor foreign currency inflows offset the lost FX market inflows from the closure of the Porgera gold mine,” he said.

“Momentum in FX market turnover is likely to increase into year’s end. Outstanding FX orders have increased from low levels seen in June, and this is expected to continue in October and November with pre-Christmas import orders.

“We expect large foreign currency inflows in late November and December to satisfy any foreign currency backlog.

“And to manage reduced FX liquidity, businesses should place FX orders (with correct documentation), as soon as possible, ensure orders are cash-backed whilst awaiting execution, tax clearance certificates are current and reflect the expected FX order execution time,” George added.

“It was also reported that the kina has been stable and unchanged against the US dollar for the past 11 months; however, the pullback in the AUD/USD (Australian dollars/US dollars), amid Coronavirus (Covid-19) related weakness in the Australian economy, strengthened the Kina/AUD, and the Australian dollar is expected to outperform into year’s end as the Australian economy opens up.”

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IGNITING OPPORTUNITY, DELIVERING VALUE 62 www.pngbusinessnews.com • Issue 4 2021

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As our corporate customers move away from their old paper-based systems, they are becoming more and more reliant on digital business operations, every day. Our Scan Bureau is a dedicated, highly secure scanning hub, offering state-of-the-art imaging software and a highly trained document management team. The first in the country to offer a complete end-to-end solution to fully

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ENERGY

Australia announces support package for improved electricity in Bougainville

C

ommunities in Buka and Arawa will soon see improved access to stable, clean, and sustainable electricity.

This follows the announcement of upgrades to the PNG Power electricity grids in Buka and Arawa yesterday.

Australian High Commissioner to PNG Jon Philp officially announced this support package yesterday in Buka, in the presence of ABG Minister for Technical Services, Dr Joseph Swuamaru, senior management of PNG Power Limited and the Bougainville administration.

The electricity support package totaling K50million will be implemented over the next eighteen months and will see the immediate hire of new generators for Buka and Arawa to ensure stable power is provided for consumers.

“We will hire immediately in the next month or two months, new generators on a hire basis, for both Buka and Arawa to make sure you have the power you need now,” said High Commissioner Philp.

“Once those are installed, we will buy new generators for both

Buka and Arawa to make sure there is sufficient power, to make sure it’s stable and it runs at all times,” he said.

In addition to this, a feasibility study will be conducted to look at delivering long term solutions for the power needs in Bougainville. This will include further exploration into solar power.

ABG Minister for Technical Services Hon. Joseph Swuamaru acknowledged the ongoing support and partnership of the Australian government.

Minister Swuamaru highlighted that Bougainville continues to face significant challenges in its physical infrastructure, however Bougainville must ensure that it invests in developing its own resources to ensure that there is sustainability in donor-supported programs such as this for the energy sector.

“We should invest in developing our capabilities so that we sustain this support. That means investing in human resources, that means

64 www.pngbusinessnews.com • Issue 4 2021

improving management,” he said.

Minister Swuamaru further explained that development of an Energy policy for Bougainville is currently underway and looks at technology-neutral options such as solar, hydro, wind, geothermal for the energy sector. He said that the Energy policy will promote a decentralized design of energy generation, transmission and distribution so that generation units can be set up right at the constituency and ward levels.

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COMPANY

Terrain Tamer story: Old-school service meets innovation

O

n the surface, the Terrain Tamer story is simply one of a spare parts business that has grown to see international success But at its heart, it is one of a company that has not only survived but thrived thanks to a consistent, ongoing culture of listening, problem solving and customer obsession.

Coupled with an innate understanding of what is needed to take on the Australian Outback, this culture is what has driven five decades of innovation.

When 24-year-old Frank Hutchinson and his business partner Don Kyatt started their company in 1969, they did so with little more than their computer-like minds for Parts Interpreting, and a few hundred dollars.

But more than this, Frank’s acute will to serve and commitment to service would become the driving force behind what would eventually become the company’s true north, the Terrain Tamer brand.

This emphasis on service was made clear to everyone who worked with Frank. Without the customer, there was no business, so when someone came in with a vehicle, they wanted to make sure they got the right part.

If it wasn’t in stock, they would find it from somewhere and if they couldn’t get a new part, they would try reconditioned.

If a part had failed, they looked at why and how it could be strengthened or upgraded. Frank’s ‘service first’ policy and determination to get whatever was needed, delivered as quickly as possible, was how he would repeatedly win customers to his business – customers like tour operator Bill King, who operated out of Melbourne and pioneered tours into the red centre in the 1960s and 70s, at a time when there was no Stuart Highway, no road houses or roadside assistance and more often than not, no other people in sight.

There was no beaten track, and this meant taking his tourists through rough, uncharted terrain and private cattle station gates to eventually reach their destination of Ayers Rock (Uluru).

Of course, with these conditions came breakages, and in the isolated and unforgiving outback, where a poor-quality part can literally be the difference between life and death, a need for something stronger and more reliable arose.

When Bill King remembers the early days of his business, he re-

calls Frank’s dedication to customer service.

“When I visited a dealer, I was just another customer, but when I went to Frank for a part, I was Bill,” Bill said.

Frank’s determination to really talk to customers like Bill, find out what they needed and create a solution, was the foundation of Terrain Tamer. And as the 4WD community grew over the years, the goal was to do the same for the problems of mine operators, cattle station owners and recreational drivers around the world.

In the early days, others weren’t interested in creating parts that were stronger than OE, seeing it as simply trying to fix what wasn’t broken, but Terrain Tamer was.

Innovation had driven them from the start and the ideas they had, that came from talking to their customers, watching how people actually used their vehicles and how mechanics did their work, was the future they envisioned for their business.

Terrain Tamer: Old-School Service Meets Innovation Terrain Tamer invested heavily in overseas travel throughout the 1970s and 80s, allowing the team to meet with the OE manufacturers of the world and come up with solutions to these customer problems, essentially laying the groundwork for the future.

The customers themselves couldn’t do it themselves, as it requires such a large-scale investment in tooling. The manufacturers couldn’t do it because they didn’t have the required understanding

66 www.pngbusinessnews.com • Issue 4 2021

of the customer. And Terrain Tamer says the opposition couldn’t do it because they weren’t focused specifically on 4WD customers.

It was only Terrain Tamer that had the critical mass needed to bridge the gap and bring the solution together.

Everything that was done was grounded in day-to-day use, and the information that Frank had gathered from his customers, not just on what the Terrain Tamer team thought would be better. If it wasn’t going to improve the use of the vehicle, no one would want it and it wasn’t worth modifying.

When Terrain Tamer introduced kits to its range, for instance, they were almost unheard of in the industry.

Previously, overhauling a gearbox or transfer case meant sourcing a hundred parts separately, often from different suppliers. It was extremely easy to forget something and then be delayed while waiting for that last part to arrive.

Terrain Tamer says it changed

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NEWS

Toroama lauds members of House in first year of Bougainville gov’t

P

resident Hon. Ishmael Toroama has congratulated all Members of the Fourth Bougainville House of Representatives for completing the first year in office since the inauguration in 2020.

President Toroama made this statement during parliament this week, highlighting that September 29 this year marked the first year of the Toroama-Nisira government in office. He described the first year as an eventful one.

“The past year has been an eventful year marked by our triumphs as well as challenges and tragedy,” he said.

“In the last twelve months our government has progressed our Independence Mission from a seemingly impossible concept into a reality driven by our people in our constituencies. We have mapped out an economic roadmap and the administration is well on its way to reform.”

President Toroama acknowledged the challenges that were faced in the first year in office, and described these challenges as perennial saying that his government in the past year has worked hard to mitigate.

President Toroama also acknowledged the loss of two of its senior Members.

“The House suffered its greatest tragedy in the loss of our two senior members of parliament in the Late Hon. Raymond Masono who passed away and the Hon. Charry Napto who has gone miss-

ing at sea. The memory of these two great men is embedded in our drive for a better and independent Bougainville,” he said.

In the first year in office, the Toroama-Nisira government has achieved several milestones under the President’s Six Point Strategy that has put Bougainville on the path to rebuilding its socioeconomic and political capacities.

A key milestone was the agreement reached on the independence timeline during the second Joint Government Consultations this year in Wabag.

“Based on the successful outcome of the 2019 Referendum results our government through the consultations, has outlined our position on independence and we have agreed with the National Government on a timeline for the final political settlement for Bougainville that must not happen before 2025 and no later than 2027,” President Toroama said.

On the economic front, much work has been progressed to realign the government’s economic priorities to be proactive to suit Bougainville’s current revenue generation abilities.

“We have introduced a new macro-economic model under the Bougainville Blue Print to create a self-sustaining economy through the development of our resources and encouraging foreign investment. We have embarked on several high impact projects through this initiative. The Department of

the President and BEC is currently cooperating with other economic sector departments to articulate the vision of the government on creating a fiscally self-reliant Bougainville,” Toroama outlined.

In this first year, the Toroama-Nisira government has also made critical changes in its ministerial leadership to ensure progress and development.

“If a government fails to evaluate itself and institute change then it is bound to become complacent, corrupt and it loses its focus to serve the best interest of its people,” he said.

President Toroama says his recent decision to reshuffle ministries in his cabinet was to address pressing issues that have gained prominence in the last twelve months including continuation of public service reforms towards independence readiness, response to COVID-19 pandemic and improvement of law and order on Bougainville.

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development.

qualification.

KPA is a subsidiary of Kumul Petroleum Holdings Limited Level 8, Kina Bank Haus, Douglas Street PO Box 143, Port Moresby 121, National Capital District Papua New Guinea Phone: (675) 320 2253 Fax: (675) 320 0238 | Website: www.kumulpetroleum.com

KUMUL PETROLEUM

NEWS

C

Xi: China ready to work with PNG, Pacific island nations for shared future

hinese President Xi Jinping in October said China stands ready to work with Papua New Guinea (PNG) to build a community with a shared future for China and Pacific island nations.

During a telephone conversation with PNG’s Prime Minister, James Marape, Xi said the country has important influence in the Pacific islands region and that China would like to join hands with PNG to maintain the general direction of bilateral friendly cooperation.

Since China and PNG established diplomatic ties 45 years ago, the two countries have always respected and treated each other as equals and supported each other on matters involving their respective core interests and major concerns, Xi said. China-PNG relations have become a model of peaceful coexistence and win-win cooperation between countries with different sizes and social systems, he said.

Xi said China firmly supports PNG in following a development path suited to its national condi-

tions and is willing to continue to provide economic and technical assistance to the country with no political strings attached and support the country’s fight against COVID-19.

The two sides should work together to strengthen exchanges and cooperation in areas such as poverty reduction, resource protection and utilization and promote cooperation in the joint construction of the Belt and Road to reap more fruits, he said.

Xi called on the two countries to strengthen coordination and collaboration on international and multilateral occasions, deal with challenges such as climate change, actively carry out the Global Development Initiative, stick to true multilateralism, and safeguard international equity and justice and the common interests of developing countries.

For his part, Marape said PNG was among the first Pacific island nations to recognize the one-China principle 45 years ago. He thanked China for its long-term support of PNG’s economic and social

development and its help in the country’s fight against COVID-19, describing China as PNG’s “sincere partner” and “reliable friend.”

PNG values its friendly relations with China and appreciates the Belt and Road Initiative and the Global Development Initiative proposed by China, he said, adding that PNG will continue to firmly adhere to the one-China policy and deepen bilateral cooperation in various fields.

PNG welcomes more Chinese companies to invest and conduct cooperation in the country, Marape said.

that was far more hard wearing.

Terrain Tamer’s modifications essentially made the gearbox three times stronger, provided a significant increase in the performance of the vehicle’s driveline and was the precursor for many modified parts to come.

The company was now putting its name behind parts that they had developed and created themselves. It was they who were now responsible for the quality of these parts and ultimately, the safety of customers.

Terrain Tamer says this has meant that from the beginning, the rigorous research, development and testing that every part has gone through before it is able to bear the Terrain Tamer stamp has ensured that “every part is at least equal to original equipment and

often far exceeding the standard.”

Manufacturers are reportedly hand selected from the best in their fields in the world, often resulting in collaborative relationships where ideas are shared, ensuring parts that are created with Terrain Tamer tooling are of the highest quality and cannot be replicated by competitors, says Terrain Tamer.

So many of Terrain Tamer’s solutions that are developed for the Australian market are then shared with the wider global market via the Terrain Tamer network across 80 countries. This allows for expensive tooling to be justified, and it is that connecting tissue that has grown the company to be as truly international as it is today, with 17 branches worldwide, and almost as many branches overseas

< From Page 66 the game by putting together complete kits that included exactly what was needed for any job.

Terrain Tamer knew from talking to its customers that for the recreational four-wheel driver, spending their time off-road and in the bush was a priority, not having to spend time fixing their broken-down vehicle.

For mechanics, time is expensive, so when a car comes in that needs a wheel bearing adjustment, it is easy to go to the shelf and grab a Terrain Tamer kit with everything inside, rather than missing one or two crucial pieces.

When operators of 79 Series LandCruisers were experiencing an issue in the vehicle’s gearbox, where the short spline of the main shaft was prone to stripping, even in easy conditions, Terrain Tamer addressed the problem by designing a shaft with a longer spline, doubling the surface area.

A similar issue with the vehicle’s input gear was where the inner spline was also stripping during use. By removing the spacer that was connected to the original gear and instead lengthening the inner spline, Terrain Tamer made a part

70 www.pngbusinessnews.com • Issue 4 2021

To Page 71 >

NEWS

Australia sends more pandemic assistance to PNG

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ustralia continues to provide medical support to Papua New Guinea for the fight against Covid-19.

PNG’s biggest urban centres and numerous provinces are grappling with the third wave of the pandemic, which has overwhelmed health systems.

Australia has dispatched another Medical Assistance Team to PNG, the sixth such deployment to assist its neighbour since the pandemic began. A further 14 Australian Defence Force personnel have also been sent to help PNG with pandemic response logistics including aviation lift support to deliver emergency supplies.

In October, Australia has also provided 240 oxygen concentrators to support the care of critically ill patients and delivered 70,000 vaccine doses to PNG. This brings the total AstraZeneca vaccine doses deliv-

ered to PNG to 144,970.

A ministerial statement from Australia said it had “worked closely with the COVAX facility, New Zealand and United States partners to deliver more than 770,000 vaccine doses” to PNG. The Minister for International Development and the Pacific, Zed Seselja, said Australia was partnering closely with the PNG government and its Provincial Health Authorities on vaccine delivery and distribution, including in the Torres Strait Treaty Villages.

“These measures build on over AU$340 million in assistance Australia has provided for the PNG Government’s national COVID-19 response since the start of the pandemic.”

Also, a British emergency medical assistance team arrived in PNG’s Western Highlands province to support local health workers cope with a surge in COVID cases.

< From Page 70 as here in Australia, including Africa, Europe, New Zealand, PNG and Fiji.

Today, the business remains independent and family owned, having carved out a unique international niche among the industries major corporations.

This is in no small way due to Frank’s belief, right from the very beginning, that his company is not just a business of parts, but of people.

The same culture that is ingrained in Terrain Tamer’s head office of innovation that stems from having had that deep connection to the customer, is replicated in each of those branches, and over 50 years on, Frank is often still last to leave each night as he drives the culture overseas.

It stemmed from Frank all those years ago, but took

up a life of its own when he trained the first generation of managers, who then trained the next generation, who have now been with Terrain Tamer for over 25 years.

Frank’s son Brent has spent his life in the company, learning from those who have been there almost from the beginning, and is now the General Manager.

As a result, Terrain Tamer’s people are those who listen to the customers’ needs by instinct and connect the need with the innovative solution, day in and day out.

Terrain Tamer says it has been this culture that has propelled the company and the brand forward, decade after decade for 52 years, and ensures they will be of great service to the industry as they continue to be discovered by 4WD specialists around the world.

LAE CHAMBER OF COMMERCE INC LAE... PNG’s Central hub of: ●

Industry ● Commerce ● Manufacturing ● Transport ● Shipping

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Be considerate, sustainable, extractive companies in PNG urged

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group of Catholic students in Port Moresby has urged extractive companies in Papua New Guinea to respect the environment for the wellbeing of indigenous people and future generations.

Their call echoes one of the nine Appeals “in the name of God” addressed by Pope Francis in his message to the Fourth World Meeting of Popular Movements.

Among the many issues brought up by Pope Francis in his recent Video Message to the Fourth World Meeting of Popular Movements, was the damage caused by mining activities to environment and the livelihoods of many poor communities across the world.

His call on extractive industries “to stop destroying forests, wetlands and mountains, to stop polluting rivers and seas and to stop poisoning food and people” resounded strongly in a youth panel of discussion hosted on 20 October by Papuan Catholic radio station “NBC - Tribe FM”.

Five students from St Joseph’s International Catholic College of Port Moresby were invited to talk about the “Impacts of the Extraction Industries” on the weekly discussion programme “Chat Room”.

The talk focused on various aspects of the topic that dwelled on the background information of the extractive industry; its impact in developing economies and improving livelihoods; comparison of benefits and disadvantages the industry possesses; mention of local and international case studies; the reality of the industry’s operations in Papua New Guinea; the harm caused by the extractive industry and the essential role youth play in creating awareness, reducing adverse effects and boosting social change.

While acknowledging the positive impact of the extractive industry on Papuan economy and society at large, the high-school students pointed out that it has also left serious and irreversible damages to the environment and people.

They mentioned loss of environmental biodiversity, deforestation, erosion, alteration of soil profiles, contamination of local streams and wetlands, as well as the displacement of indigenous landowners. A classic example in this respect, they noted, is Australia, which was taken over by Europeans who had the locals forcefully and harshly driven out from their homeland into the margins of society.

Participants also remarked that if the extractive industry is not managed carefully it can cause long-term political and economic unrest which further impacts on the lives of people.

As an example of mismanagement one student cited the 10-year Bougainville Conflict which was triggered by tensions between indigenous landowners and Papuan miners in the Panguna Copper Mine. The conflict, which ended in 1998, caused thousands of civilian casualties.

Bringing their discussion to a close, participants emphasized the essential role youth are called to play in creating awareness and boosting change.

They said the younger generations and the general public should be informed and need to better understand the impacts of the extractive industry so they can speak up for people’s rights.

The Catholic students also called on the Papuan government to be more transparent and accountable in managing national resources ensuring they benefit local communities.

72 www.pngbusinessnews.com • Issue 4 2021