A series of significant mineral finds in Papua New Guinea (PNG) have highlighted the role exports are set to play in the nation’s economic future. However, there have been calls from industry players and opposition officials asking the government to do more to ensure revenues stay in the country.
In mid-April, state-owned Petromin announced that it had found a 364-metre intersection of porphyry copper, molybdenum and gold mineralisation at its Ipi River prospect, located 50 km north of its Tolukuma gold mine in Central Province.
In the same month, Australia-based Indochine Mining announced that gold and silver finds at Mount Kare had underlined the “outstanding potential” of the project to become one of PNG’s next major mining operations. Officials also revealed that KULA Gold’s Woodlark Island project, which has estimated reserves of 700,000 ounces, was on track to start producing in 2014.
Also in April, Nautilus Minerals of Australia announced that it had obtained a license from PNG to mine a site the size of 21 football fields under the sea. The company hopes to develop and expand undersea mining to obtain copper, gold, silver and zinc from the seafloor.
These recent finds and progress underline the significant contribution metals are set to make to GDP in the coming years. In 2010, activities directly attributed to mining comprised 21% of domestic revenues, while high global commodity prices are widely credited for GDP growth reaching 8.5% in 2011 and the predicted rate for this year. “In 2012, real GDP is projected to grow at 8%, supported by a recovery in mining output,” the IMF wrote in February.
However, concerns over the environmental impacts of mining and foreign miners over-exploiting PNG’s resources have led to calls for the country to tighten its tax regime. Observers have called for the country to emulate Australia’s controversial mining tax, which will levy 30% of the “super profits” from corporations mining iron ore and coal.
Meanwhile, critics point to the 10-year tax holidays currently in place for a number of mining projects in the country, including the Chinese-operated $1.4bn Ramunickle-cobalt project.
error: Content is protected !!