Mining Boom Over

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A warning thatthe implementation ofthe 2013 National Budget is under threat.

ThPNG Chamber of Mines & Petroleum says that threat is quite significant mainly as a result of unfavourable trends inthe global markets.

The Chamber’s outgoing PresidentoDr Ila Temu, says gold prices are down as well as prices of ther minerals.

The issues were raised today duringthe announcement ofthe new executive councillors ofthe chamber. After serving 10 years onthe board, three years of that asthe PresidentoDr Temu has handed overthe reigns to Gerea Aopi- someone who has had vast experience inthe public service a and business sector and who knowsthe ins and outs ofthe Mining and PetroleumIndustry.

Also present werethe new executive- Senior Vice President Peter Aitsi and Vice President Richard Kassman.

According tothe chamberthe implication tothe budget looks daunting.

“The opportunity to try and attract new investment intothe country will be harder for the existing operator…the margins are low”. – Dr. Illa Temu

Official figures show that total government revenue this year is projected to be K10.5 billion. Last year recorded K10.16 billion. Expenditure alone is budgeted at K13.03 billion compared to last year’s  K10.56 billion withthe deficit at K2.55 billion, a significant increase from last year’s K402.5 million.

Withthe current uncertainty in global markets,the threat here is if projected revenue fallsthe budget deficit will increase dramatically. Likewise, if and when government  expenditure exceeds what has been budgeted for.

Aopi supported Dr. Temu’s call onthe government’stating thatthe threat onthe national budget is imminent with significant drop on government revenue for resource companies.

Meanwhile Waigani is revisitg its tax regime. The chamber is in support of this but is askingthe chamber to be mindful ofthe global environment are prioritize on its expenditure areas.  

The chambers message is simple and clear-the global mining boom is over and this is sure to have an adverse impact on resource based countries like Papua New Guineawho relies heavily on it’s mineral exports. The downturn will impact on capital spending, exploration expenditure and financing for existing and planned projects. Gold price for instance reached $1,300.00 per ounce four weeks ago and now is tracking at about $1,400.00.

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