Resource PNG – Episode 88, 2013



We feature a series of interviews:


1. Loujaya Toni, Minister for Community Development:


  • Minister’s perspective on returns froPNG’s resources sector
  • Role ofthe Government in negotiatingthe National Content Plan
  • Community participation/ownership of social investments/stakeholder consultations inthe development of a National Content Plan.
  • Preparingthe community for change
  • Capacity building
  • Sustainable development post project completion
  • Striking a balance
2. Aaron Betten, ADBeCountry Economist:

  • Papua New Guinearsquo;s economy is heavily dependent on extractive industries. We’re now seeingthe negative impact of this withthe current downturn.  The ADBersquo;s outlook forthPNG economy.
  • Looking atthe sovereign wealth fund:the assumption is that monies will be gradually drawn down as to reducethe stress on monetary and fiscal variables such as currency valuation and inflation. However Aaron Betten has previously highlighted problems that existed underthe former Mineral Resource Stabilization Fund. How confident isthe ADBethat similar issues will not emerge underthe SWF mechanism?
  • Canthe service sector in PNG be relatively independent of extractive industries giventhe dependence of some of this sectors, particularly aviation, on mining and petroleum activity.
  • Writing for the Development policy blog, you highlightedthe challenge of employing about 8 000 construction workers afterthe construction phase ofthPNG LNG project ends. The government’s response has been to embark on major infrastructure projects that will absorb this workforce asthey are made redundant. Bet in order to do so,the government is borrowing a lot.  ArPNG’s debt levels sustainable and arethey consistent withthe government’s debt management strategy?
  • There is a view amongst some observers that after allthe gas is exported, PNG will have no gas and no economy. What are some potential risks associated withthPNG LNG project and how shouldthey be handled?
3. Bell Muntz, CEO NKW Holdings:

  • Beief description of how NKW came about.
  •   NKW’s core business andthe growth areas that are being explored
  • what isthe value ofthe company’s current assets and liabilities and in terms of its performance, has it been creating value for its shareholders?
  • Many resource developers are known to receive incentives such as tax concessions when setting up shop. The government incentives that NKW received.
  • Many landowner companies have suffered from mismanagement and have a history of being bailed outowhat has NKW’s experience been and what lessons can NKW teach therLandowner companies (Lancos)?
  • One ofthe challenges that landowners face is that of financial literacy not just in terms of managing personal income but also managing business finance. What sort of training has been provided to locals mine villagers?
  • What fraction ofthe company’s workforce are local landowners and how many hold senior managerial roles inthe company?
  • Beth Newcrest and Harmony Gold recently announced major losses. What impact hasthe current downturn inthe resource sector had onthe company’s performance and what sort of risk management strategies have been deployed, going forward?
Finally, whilst mine communities benefit from various packages offered bythe developer andthe State, it istheir poorer cousins downstream who beatrthe brunt of mine related environmental damages. Hasthere been a consideration onthe part of mine communities to assistthere brthers and sisters downthe Watut River, through employment or subcontracting business opportunities?

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