PNG Business News

Issue 4, 2024 IS OUT NOW!! Read it here: https://lnkd.in/g6NQ4_wU We've come to the end of another bustling year, and 2024 has been good to us at PNG Business News -- witness Issue 4 in your hands, a massive 164-page tome of the latest and best news on Papua New Guinea's resources industries and business sector. As you flip the pages, take note first of our eminent columnist Mick McWalter's piece on petroleum sector reform, starting on page 10. Mick delves into the national value chain and how the Marape-Rosso government can extract the most out of the country's sprawling natural resources, leading to sustainable development for all New Guineans. Our cover image is courtesy of Ok Tedi Mining Limited (OTML), which marks its 40th anniversary this year. The gold mine in Western Province has generated over 13.4 billion kina in dividends for the nation, and looks forward to many more productive years as its Special Mine Lease has been extended to 2042. The full story is on page 64. Related to that is Prime Minister James Marape handing over the reins of the Ministry of Mining to Hon. Wake Goi, who assumed office in September. The MP for the Jimi electorate in Jiwaka Province outlined his priorities for the last quarter of 2024 and into the new year in an exclusive interview with PNG Business News, as our journalist Roselyn Erehe details on page 60. Finally, topping the business activities in this previous quarter is the launch of the Australia-PNG Development Partnership Plan 2024-2029, unveiled by the Australian High Commission Papua New Guinea recently. The plan outlines Australia's commitment as PNG's largest development partner, and ensures continued harmonious relations between the neighbors into the near future. This and other business articles fill our pages once more, and we have no one to thank but you, dear patron, for another year of highs and breakthroughs. Cheers for a prosperous 2025 to all! Thank you to our advertising partners: Westpac PNG, Westpac, Moni Plus, Quest Exploration Drilling (PNG) Limited, CreditBank PNG, Swire Shipping, Bishop Brothers Engineering Ltd, NGIP AGMARK LTD., PNG Forest Products Limited, Atlas Steel - PNG, Aspen Medical, International SOS, Consort Express Lines, Remington Technology , Datec PNG Limited , Datec (PNG) Ltd , EastWest Transport, Ela Motors PNG, Port Moresby Electrical - PME, Express Freight Management, EagleXP, PNG DATACO LIMITED, SGS, nasfund, AG Investment Limited, Markham Culverts Limited, PNG CR Service Company, PEUNA PNG, TISA Bank, Peopleconnexion PNG, Sprint Networks, Institute of Banking & Business Management, Steamships Limited, ICTSI South Pacific and Trans Niugini Tours

𝗠𝗶𝗻𝗶𝗻𝗴 𝗠𝗶𝗻𝗶𝘀𝘁𝗲𝗿 𝗩𝗼𝘄𝘀 𝗧𝗿𝗮𝗻𝘀𝗽𝗮𝗿𝗲𝗻𝗰𝘆, 𝗖𝗼𝗹𝗹𝗮𝗯𝗼𝗿𝗮𝘁𝗶𝗼𝗻 𝗮𝘀 𝗣𝗿𝗶𝗼𝗿𝗶𝘁𝗶𝗲𝘀 𝗦𝗵𝗶𝗳𝘁 Read the full story here: https://lnkd.in/gQVrFX2R As the year comes to an end, Papua New Guinea's Minister for Mining, Hon. Wake Goi, has expressed disappointment over unmet priorities in the mining sector for 2024. Despite these challenges, the Minister assured stakeholders that his ministry is committed to achieving its goals by 2025. In an exclusive interview with PNG Business News, Minister Goi apologized to investors for delays in the issuance of mining licenses. He assured that the backlog of applications would be addressed by January 6, 2025, when government business resumes. “There is a significant workload ahead, but I am determined to ensure all licenses are reviewed and approved in a timely manner,” said the Minister.

𝗣𝗠 𝗠𝗔𝗥𝗔𝗣𝗘 𝗔𝗡𝗡𝗢𝗨𝗡𝗖𝗘𝗦 𝗚𝗢𝗩𝗘𝗥𝗡𝗠𝗘𝗡𝗧’𝗦 𝗗𝗘𝗖𝗜𝗦𝗜𝗢𝗡 𝗧𝗢 𝗣𝗔𝗥𝗧𝗜𝗔𝗟𝗟𝗬 𝗣𝗥𝗜𝗩𝗔𝗧𝗜𝗦𝗘 𝗣𝗡𝗚 𝗣𝗢𝗪𝗘𝗥 𝗟𝗜𝗠𝗜𝗧𝗘𝗗 Read the full story here: https://lnkd.in/gq4i4-2q Prime Minister Hon. James Marape has recently (11.12.24) announced his government’s decision to partially privatise PNG Power Ltd amidst Government’s further decision to open up other parts of the country to independent power suppliers. Prime Minister Marape told the PNG CORE Investment Week in Sydney that Cabinet has approved the decision in one of its final meetings this year the partial privatization of the State-owned enterprise to improve its operations and efficiency of power supply to Papua New Guinea. The partial privatization means the State will continue to maintain its interest in PNGPL with the investor taking over management of the enterprise and equity - assets worth over K4 billion in the company. This will be the second decision Cabinet has made on PNGPL, where an earlier decision was made to look at the company’s power generation, retail and distribution status. The Prime Minister urged investors to keep an eye out for Expressions of Interest soon to be advertised, pointing out the advantage in PNG Power’s “first right to supply power” monopoly in Papua New Guinea. “Power supply is a strategic asset and investment, and PNG Power has two important assets. It has asset that is K4 billion in total, and more importantly it has monopoly in first right of supplying power with its community service obli-gation that it still holds,” said the Prime Minister. Prime Minister Marape said reforms in the energy sector have begun with the government ministry responsible ready to issue licenses to investors willing to partner his government to take power supply to parts of PNG that are out of reach of PNGPL, as up to 70 percent of the country still remains without elec-tricity supply. The Prime Minister also highlighted Government’s long-term decision to move into clean, green energy in the next 20 years, while pointing out PNG’s numer-ous clean energy potential in hydro, thermal, wind and solar sources. He urged investors to seriously consider this space and to look further down the line to selling power over the borders to Indonesia and Australia. “We want to unlock power in our country by bringing cheaper reliable and cleaner power to our people at the earliest. We have more than enough sources of clean energy where hydro remains the biggest available source. “I encourage investors to think big and take up these opportunities that are available in our country,” said PM Marape.

𝗢𝗸 𝗧𝗲𝗱𝗶 𝗠𝗶𝗻𝗶𝗻𝗴 𝗴𝗲𝗻𝗲𝗿𝗮𝘁𝗲𝘀 𝗨𝗦$𝟭.𝟱 𝗯𝗶𝗹𝗹𝗶𝗼𝗻 𝗿𝗲𝘃𝗲𝗻𝘂𝗲 Read the full story here: https://lnkd.in/gb7D4qtZ Ok Tedi Mining Limited (OTML) is on track to generate US$1.5 billion (K5.8 billion) in revenue for 2024. This is a significant increase from 2023 (31%), 2022 (45%) and 2021 (98%). Managing Director & Chief Executive Officer, Kedi Ilimbit, announced the record revenue at the 2024 PNG Chamber of Resource & Energy Investment Week Conference in Sydney, Australia, “This result is a testament to the hard work of our employees. Without them, we would not have achieved the success we see here today.” “What is even more special is that we have a 98 percent national workforce that has delivered this result for us,” said Mr Ilimbit. OTML intends to become a US$2 billion revenue company within the next five years. This outcome is dependent on the successful implementation of OTML’s Growth 2050 Strategy. This includes; Ok Tedi Energy by 2025; New Joint Venture arrangements with OTML and expansion of Ok Tedi Power by 2028; and the Ok Tedi Underground Joint Venture arrangement by 2030. “Whilst we are a nationally owned company, we want to drive our growth and expansion through international best practices and benchmark ourselves against the world industry standards,” said Mr Ilimbit. “Ok Tedi is a great company, and the future looks promising for us and our shareholders.”

𝗦𝗮𝗻𝘁𝗼𝘀 𝗙𝗼𝘂𝗻𝗱𝗮𝘁𝗶𝗼𝗻’𝘀 𝗹𝗶𝗳𝗲-𝗰𝗵𝗮𝗻𝗴𝗶𝗻𝗴 𝗕𝗲𝗹 𝗶𝘀𝗶 𝗽𝗿𝗼𝗴𝗿𝗮𝗺 𝗶𝗻 𝗣𝗮𝗽𝘂𝗮 𝗡𝗲𝘄 𝗚𝘂𝗶𝗻𝗲𝗮 𝘄𝗶𝗻𝘀 𝗶𝗻𝘁𝗲𝗿𝗻𝗮𝘁𝗶𝗼𝗻𝗮𝗹 𝗿𝗲𝗰𝗼𝗴𝗻𝗶𝘁𝗶𝗼𝗻 Read the full story here: https://lnkd.in/g65k6Vcr A Santos Ltd Foundation program committed to changing attitudes towards family and sexual violence, and supporting survivors in Papua New Guinea, has won international recognition for its life-changing impact at the Platts Global Energy Awards in New York. A Santos Foundation program committed to changing attitudes towards family and sexual violence, and supporting survivors in Papua New Guinea, has won international recognition for its life-changing impact at the Platts Global Energy Awards in New York. Santos Managing Director and CEO Kevin Gallagher said the Santos Foundation’s mission is to invest in partnerships and local initiatives that help communities thrive, and build capacity and resilience in the communities it serves. “The Bel isi PNG program is a shining example of the Santos Foundation’s mission and was established to address the very serious issue of family and sexual violence in Papua New Guinea and we are proud to see this work be recognised by the wider industry,” Mr Gallagher said. “Santos and our Foundation invest US$10 million into PNG communities each year, focusing on health, youth opportunities, community development, and family and sexual violence. “Santos has been a proud corporate citizen of PNG for around 40 years. We are committed to PNG, its economy, and above all, its people – for the long haul. “PNG is a very important part of the Santos portfolio and includes the world-class PNG LNG project as well as large-scale upstream oil and gas resources and infrastructure. “PNG is also an energy-producing nation for the giant energy-consuming economies of Asia. And of course, it is development of PNG resources that is underpinning the jobs, business opportunities, regional development and government revenues that are helping PNG build prosperity for its people over time. “The Santos Foundation plays a very important role in supporting Santos’ operations in PNG, building stronger communities in the areas where we operate and making a major contribution to Santos’ purpose to provide reliable and affordable energy to help create a better world for everyone,” Mr Gallagher said. The magnitude of family and sexual violence in Papua New Guinea is a serious challenge. Almost twothirds of women report having experienced some form of physical or sexual violence.

𝗧𝗮𝗹𝗸𝘀 𝘄𝗶𝘁𝗵 𝗠𝗮𝘆𝘂𝗿 𝗥𝗲𝘀𝗼𝘂𝗿𝗰𝗲𝘀 𝗦𝗮𝘁𝗶𝘀𝗳𝗮𝗰𝘁𝗼𝗿𝘆 Read the full story here: https://lnkd.in/gXMp2699 The Minister for International Trade and Investment, Hon. Richard Maru described his recent meeting with the full Board and Management of Mayur Resources (ASX:MRL) at the margins of the Papua New Guinea (PNG) Investment Week in Sydney as “highly satisfactory”. Minister Maru said: “The meeting allowed me to clarify to Mayur Resources a lot of issues that the State needs sorted out between Mayur Resources and the State Negotiating Team (SNT) before we can progress to finalizing a Term Sheet that we would like finalized before January 18, 2025. This is critical so we can proceed to have the State, Central Provincial Government, and the Mayur Resources work towards signing a Project Agreement for the development of the Central Cement and Limestone Project.” Minister Maru made it very clear to Mayur Resources that the Government wants the cement and the limestone project to be one project and commenced concurrently. Minister Maru further stated: “The Government wants the project to cater for equity participation by the State, the Central Provincial Government, the landowners, superfunds, and ordinary Papua New Guineans to invest in this project which is critical to build our nation.” Minister Maru stressed that Mayur Resources should raise capital in our local market using an IPO. “Under the Project Agreement, the Government expects a very significant reduction in the price of cement which will be produced from this project which we will use for our roads and buildings to help build our nation. As a country, we should not be importing limestone and cement because we have the resources right here. We should be a net exporter of limestone and cement to other countries. We will consider the project to be a pioneer industry and offer protection to the project for a period of up to 10 years if the cement processing plant is built next year so we can replace all cement imports,” said Minister Maru. “I firmly agree with Mayur Resources that Mayur Resources and the SNT must now meet and work towards finalizing an agreed Term Sheet for the Government to consider on January 18, 2025, so we can work towards finally having a Project Agreement signed between the State and Mayur Resources before the end of March 2025,” added Minister Maru. “I want to thank the Chairman of Mayur Resources, Mr. Richard Pegum and his Board and Management for our meeting, and my subsequent meeting with the SNT Chairman, Mr. Dairi Vele, and I look I look forward to receiving the Term Sheet on January 18, 2025,” said Minister Maru.

𝗦𝗮𝗻𝘁𝗼𝘀 𝗶𝗺𝗽𝗿𝗼𝘃𝗲𝘀 𝗮𝘀𝘀𝗲𝘁 𝗿𝗲𝗹𝗶𝗮𝗯𝗶𝗹𝗶𝘁𝘆, 𝗱𝗲𝗹𝗶𝘃𝗲𝗿𝘀 𝗼𝗻 𝗶𝘁𝘀 𝗰𝗼𝗺𝗺𝗶𝘁𝗺𝗲𝗻𝘁 Read the full story here: https://lnkd.in/gCJ4jHzB Santos Ltd has improved facility reliability of its assets to more than 97 per cent this year with production seeing record days, weeks and months. This was announced recently by Sigurdur Jonsson, Santos Vice President for PNG Operations during the 2024 PNG Investment Week in Sydney. “In our efforts to optimise maintenance strategies, we thoroughly examined all PNG maintenance approaches and drew upon Santos’ extensive experience. Subsequently, we successfully implemented a comprehensive new maintenance program for PNG which is consistent with our company operations excellence standard. “I am proud to say that we improved even further from last year’s record reliability of 95 per cent to more than 97 per cent this year. This was done through vigilant focus on our engineering and maintenance programs as well as critically reviewing and prioritising the work executed at our facilities. “This year alone we have accelerated 16 billion cubic feet of gas from the Santos operated fields to feed PNG LNG infrastructure before Angore was brought on by ExxonMobil PNG during this quarter. The Angore project ties in an additional TCF of gas to the PNG LNG infrastructure which will see the plant full,” said Jonsson. Santos also concluded a 4 well infill program successfully without any HSE incidents. “We saw oil rates from our fields that we have not seen since 2021 despite operational challenges such as a landslip in the Moran area that saw us curtail production from there for a few months. “Last year I stood here and talked about the criticality of delivering high facility reliability to provide feed gas to PNG LNG and to optimise our oil production. We were also in the midst of executing our 4 well infill program and looking at standing up our gas production at Hides to support the Porgera mine. “I’m delighted to stand here today to say that we have delivered on these commitments.”

𝗧𝗣𝗔 𝗦𝘁𝗿𝗲𝗻𝗴𝘁𝗵𝗲𝗻𝘀 𝗣𝗡𝗚 𝗖𝗿𝘂𝗶𝘀𝗲 𝗦𝗵𝗶𝗽 𝗣𝗮𝗿𝘁𝗻𝗲𝗿𝘀𝗵𝗶𝗽 𝘄𝗶𝘁𝗵 𝗖𝗮𝗿𝗻𝗶𝘃𝗮𝗹 𝗔𝘂𝘀𝘁𝗿𝗮𝗹𝗶𝗮 Read the full story here: https://lnkd.in/ghceqUy7 The Papua New Guinea Tourism Promotion Authority (TPA) reaffirmed its partnership with Carnival Australia (P&O Cruises) to strengthen Papua New Guinea’s (PNG) growing cruise sector on Monday 9 December in Sydney, Australia. TPA’s Chief Executive Officer (CEO), Eric Mossman Uvovo, met with Carnival Australia’s Vice President, Peter Little, to reaffirm the partnership between PNG and the region’s leading cruise liner, Carnival Australia. Carnival Australia, under its passenger cruise brand, P&O Cruises, have been sailing into PNG waters since 2014, a significant moment that marked the entry of large capacity passenger cruising into PNG. Since then, the cruise sector in PNG has grown exponentially. In 2019, prior to the onset of the global pandemic, PNG registered the highest number of cruise arrivals into PNG at 52,000 cruise passengers alone. Over the years, Carnival Australia has played a significant role by ensuring continued cruise itineraries for PNG as a cruise destination in the Pacific. Cruise tourism in PNG has contributed an estimated US$20 million to the PNG economy, a specific percentage of which goes directly to the local communities through landing fee’s, shore excursion activities, arts and crafts, local hire bus services and tour guiding. TPA’s CEO alluded to the importance of ensuring concentrated investments in cruise provinces to improve the overall cruise experience. “Our cruise hubs, Milne Bay and East New Britian, have incredible potential and require stronger coordination in the province to drive community educational programs and tourist safety initiatives,” said Uvovo. Uvovo also highlighted his concerns over recent law and order issues which have cast a cloud of doubt over the cruise sector in PNG. “I look forward to working with the leadership in the cruise provinces of PNG to establish community policing initiatives and youth ambassador programs to mitigate risks associated with cruise port call days. The communities in these cruise destinations must appreciate the windfall of tourist a cruise brings into a town when the passenger ship calls into their port, it should be a time to embrace our visitors and take ownership as proud ambassadors for your culture, community, province and country. I appeal to all stakeholders in our cruise provinces, a coordinated effort is critical as we continue to welcome cruise ships of all sizes into our coastal and riverway communities,” said Uvovo. Uvovo has reaffirmed TPA’s partnership with Carnival Australia and has committed to finding proactive solutions to issues currently faced in the Cruise sector for the benefit of all cruise stakeholders.

𝗣𝗠 𝗠𝗔𝗥𝗔𝗣𝗘 𝗪𝗘𝗟𝗖𝗢𝗠𝗘𝗦 𝗜𝗡𝗩𝗘𝗦𝗧𝗠𝗘𝗡𝗧𝗦 𝗜𝗡 𝗕𝗢𝗨𝗚𝗔𝗜𝗡𝗩𝗜𝗟𝗟𝗘; 𝗥𝗘𝗩𝗘𝗔𝗟𝗦 𝗚𝗥𝗘𝗔𝗧 𝗡𝗘𝗘𝗗 𝗧𝗢 𝗜𝗡𝗖𝗥𝗘𝗔𝗦𝗘 𝗥𝗘𝗚𝗜𝗢𝗡’𝗦 𝗜𝗡𝗧𝗘𝗥𝗡𝗔𝗟 𝗥𝗘𝗩𝗘𝗡𝗨𝗘 𝗧𝗢 𝟱𝟬 𝗣𝗘𝗥𝗖𝗘𝗡𝗧 𝗙𝗥𝗢𝗠 𝗖𝗨𝗥𝗥𝗘𝗡𝗧 𝟳 𝗣𝗘𝗥𝗖𝗘𝗡𝗧 Read the full story here: https://lnkd.in/gHDi2EHD The internal revenue sup-porting Bougainville’s recurrent and development budgets is only at 7 percent and must be raised to over 50 percent to adequately support the Special Re-gion’s autonomous restructure aspirations. Prime Minister Hon. James Marape revealed this recently (11.12.24) in Sydney dur-ing the PNG Investment Week as he asked for greater collaboration with inves-tors to boost Bougainville’s economy. “Bougainville needs to be economically strong,” PM Marape said as he gave a rundown on the peace process, including the referendum of 2019 and cur-rent efforts by his government toward processing referendum results in the PNG Parliament. “Any investors willing to take up residency in Bougainville, whether in partner-ship or individually, you are all most welcome. Waigani will not stand in the way.” He said the PNG Government greatly welcomes investments in Bougainville as part of its efforts to empower Bougainville and the Autonomous Bougainville Government to manage its budget and economy. “We must start with economic independence as the fundamental tool to grow Bougainville; that once it has the money, it can sustain any endeavour into the future. “At the moment, Bougainville’s internal revenue is only 7 percent of the total recurrent and development budget. This is not sufficient for Bougainville to get up and get going. We need to raise this revenue at the earliest to about 50 percent.” As part of the Marape-Rosso Government’s move to financially strengthen the autonomous region, Government is transferring all its shares held in Bougainville Copper Limited to the ABG, with Prime Minister Marape saying further that, under the revenue-sharing arrangements, he is considering Bougainville keeps all revenues raised in the mine. “We are also looking into this model to economically empower them further. This will take time, but it starts with these sorts of engagements so I welcome any investors out there. Bougainville is open for business.” As part of his advocacy for investments in Bougainville, the Prime Minister high-lighted the strength of the Bougainville people and the leading position the former province took in the country at that time.

𝗠𝗶𝗻𝗶𝘀𝘁𝗲𝗿 𝗚𝗼𝗶 𝗦𝗽𝗲𝗮𝗸𝘀 𝗼𝗳 𝗣𝗡𝗚’𝘀 𝗟𝗲𝗴𝗮𝗰𝘆 𝗼𝗳 𝗠𝗶𝗻𝗶𝗻𝗴 𝗘𝘅𝗰𝗲𝗹𝗹𝗲𝗻𝗰𝗲 Read the full story here: https://lnkd.in/gQkeUUJA Papua New Guinea remains one of the world's premier destinations for mining investment, said the Minister for Mining, Hon. Wake Goi, during the recent PNG Investment Week in Sydney, Australia. Minister Goi stressed PNG's vast mining potential and highlighted the country's mining sector growth, future prospects, and investment opportunities to more than 2,000 delegates and potential investors. Giving an overview of the mining sector, Goi said it is a mature and thriving sector, with roots stretching back to 1852. “From the discovery of gold flakes in Motuan clay pots to the establishment of large-scale hard-rock mining operations like the Panguna mine in Bougainville, our nation has a rich mining heritage,” the minister said. He noted that PNG hosts world-class giant mines, large-scale mines, and small-scale mines, along with several alluvial gold fields across the country. Goi underlined the mining sector’s significance, which historically contributes over 80% of PNG’s total export revenue, citing impressive production figures from the past five years: - Gold: 1.7 million ounces annually - Silver: 2.4 million ounces annually - Copper: 84,500 tons of concentrates annually - Nickel and Cobalt: 33,500 tons and 3,000 tons respectively - Chromite: 123,000 tons of concentrate The sector generated an average annual export revenue of PGK13 billion over the past five years, he noted. “PNG has established a strong reputation for mining safety, reducing fatalities from ten per year to an average of one, with zero fatalities recorded in 2017,” Goi added. The minister also outlined several transformative mining projects: 1. Ok Tedi Mine Extension: The mine's lease has been extended for 20 years, potentially extending operations beyond 2040. 2. Porgera Mine Reopening: A 20-year special mining lease has been granted, with landowner compensation agreements nearly finalized. Compensation agreements with landowners and communities are in place, ensuring inclusive benefits and mutual prosperity. Goi also announced that New Pogera Limited has signed the Long Term Compensation Agreement with recognized Landowner Agents for 14 of its 15 tenements, which is in compliance with the Mining Act 1992. The CDA is ongoing and will soon conclude, he added. 3. Ramu Nickel-Cobalt Mine Expansion: A US$1.5 billion investment aims to double or triple output, supported by downstream processing feasibility studies. 4. Wafi-Golpu and Frieda River Projects: Two major copper-gold projects with combined investment potential exceeding US$11 billion are advancing toward permitting and development.