PNGIndustryNews.net - Bad cop Chan
In a wide-ranging speech to the 12th PNG Mining and Petroleum Investment Conference in Sydney this week, O’Neill told a record 1350 registered delegates: “The undertaking I give you today is this, there will be no drastic or radical change to the laws that exist today – and there will certainly be no immediate change.”
In sharp contrast, Chan promised significant legislative changes in the coming year, including changes to the Mining Act, the Mining (Safety) Act and Offshore Mining Policy.
Chan’s presentation, which set the program for the 2nd day of the conference back by almost an hour, gave mining company representatives a bit of an adrenalin rush when he said there were proposals for a mine closure plan to be submitted when a company applied for an exploration tenement.
The actual text suggested, more plausibly, that a mine closure plan would be required when an application was made for a mining lease.
It was not the only occasion the Mining Minister went off script. On the first occasion he quickly corrected himself after his reference to the O’Neill-Namah Government resulted in uncomfortable laughter breaking out among the audience.
In his introduction the Minister said mining had been the largest contributor to the PNG economy “for well over ten years”. Maybe it was too hard to reflect back to the early days of independence when the Bougainville copper mine was a portent force in the PNG economy as the only major resource venture at the time.
One of the oddest plans put forward by the Minister was a suggestion that the revised mining policy would limit to ten the number of exploration licences “that any one person can hold at any one time”, while at the same time increasing the licence term from two years to five years.
The maximum area for an exploration lease will also be reduced by half from the current allowance of 250 sq km or 750 sub-blocks.
These are indeed groundbreaking ideas that could only stifle the all-important exploration sector. Unless this exercise becomes retrospective, which is unlikely because that would probably be illegal, it is largely academic since most worthwhile lease areas throughout the country are already accounted for.
Virtually all countries with any history of mineral exploration generally are more concerned with expenditure levels, and adequate activity, rather than the size of the lease areas granted.
For example, a recent release of mineral exploration acreage in South Australia provided for a number of leases that exceeded 1,000 sq km.
Minister Chan appears inclined to take a prescriptive approach to future exploration activity. Socioeconomic and environmental impact assessments would be made a requirement at the exploration phase, when explorers will have little awareness of the nature and scale of mineralisation they may discover.
In his address PNG’s Minister for Petroleum and Energy, William Duma, was highly optimistic about the future for the oil and gas industry. He said total gas reserves could amount to 60 trillion cubic feet or more and provide the basis for LNG exports as well as creation of a domestic industry.
He hoped companies like InterOil, Talisman, Horizon and Eaglewood Energy develop discovered resources “quickly without further delays within the next three years”.
Mr Duma also acknowledged that the government had an “abysmal” track record when it came to delivering on Memorandum of Agreements signed between the government and landowner groups.
To counter this, he said, there were plans to set up Expenditure Implementation Committees for each petroleum project to manage MoA funds as well as project implementation in these areas, an initiative that would be welcome news to the petroleum industry.
Mr Duma also announced that a Cabinet submission would be made in the New Year on the establishment of a Petroleum and Energy Authority that, he said, had been tailored to meet the requirements of both government and industry.
The government, he said, was concerned about companies that warehouse the license interests and would adopt a “use it or lose it” policy.
Industry leaders have indicated there have been minimal exchanges between government and industry on the proposed Petroleum and Energy Authority or the legislation that will be amended for the mining sector.
Prime Minister O’Neill, in reiterating plans for a wide-ranging review of the resource sector, inclusive of a corporate tax review, said this exercise was not just for “window dressing purposes…(as it) must be more than just very welcome contributors to the budget bottom line.
“They have to be imposed in a way that does not act as a significant disincentive to investment, and international competitiveness. We must have a modern and competitive resource tax regime,” O’Neill said.
Other key messages delivered by the PNG Prime Minister included a strong case that political stability will be further strengthened in the country; that he has begun in earnest the fight against corruption and that the government was committed to ensuring the continuation of strong economic growth. |
Thread abonnieren
