Papua New Guinea chasing world commodities boom
TUESDAY , 07 DECEMBER 2004
SYDNEY: Impoverished Papua New Guinea is racing to overhaul its foreign investment laws to cash in on a world boom in commodities prices, a senior PNG minister said yesterday.
Gold, oil, copper and other mineral commodities found in abundance in the South Pacific nation are selling for the highest prices in decades on world markets, setting in motion a global exploration boom.
The country may miss a "window of opportunity" due to political instability and a lack of much-needed public and private sector reforms that were keeping foreign investment away, PNG's minister for mines, Moi Avei, told a gathering of miners and investors.
"PNG has a real opportunity to capitalise on the boom in commodities," said Avei, who gave the address, filling in for PNG Prime Minister Michael Somare who was ill.
"However, there is lingering doubt in the marketplace (about its ability). Avei said. "It's been going on for years."
Plans to lay a 3000-km pipeline under the Coral Sea to connect eastern Australia with the remote gasfields of the PNG Highlands and inject up to $US285 million a year into the domestic economy are still under review by ExxonMobil Corp, more than two years after Somare made the project a national priority.
The last big gold discovery was nearly a quarter-century ago on Lihir Island. More recently, the world's biggest mining company, BHP Billiton Ltd, relinquished its stake in the OK Tedi copper mine on environmental grounds.
Mining accounts for about a third of PNG's gross domestic product (GDP), though this contribution is more than washed out by national debt, which this year will account for 55 per cent of GDP, down from 75 per cent of GDP last year.
Hoping to rope in more investment in mining, PNG is abolishing a 2 per cent levy on imported goods – most mining equipment is shipped in as PNG has little domestic manufacturing – and extending foreigners' work visas to 10 years from two.
"The minerals and energy sector is certainly our lifeline," Avei said.
But even if PNG becomes more friendly to the mining industry, other problems persist.
For years, successive governments have failed to combat growing HIV infections, street crime and poverty. More than 200 Australian police have been dispatched to help an understaffed local force patrol PNG's most crime-plagued ditricts.
"Inefficiency in the public sector has become entrenched," Avei said.
PNG's Treasuer Bart Philemon told the conference the government was completing its 2005 budget amid signs the country's coffers were improving.
The national currency, the kina, was stablising, inflation was going down and economic growth was nearing 3 per cent, he said.
PNG is made up of 600 islands, where 85 per cent of its 5.3 million people live subsistence lives in villages clinging to jungle-clad mountains. It is divided by 850 languages, where tribal allegiances dominate and tribes engage in bloody wars.
TUESDAY , 07 DECEMBER 2004
SYDNEY: Impoverished Papua New Guinea is racing to overhaul its foreign investment laws to cash in on a world boom in commodities prices, a senior PNG minister said yesterday.
Gold, oil, copper and other mineral commodities found in abundance in the South Pacific nation are selling for the highest prices in decades on world markets, setting in motion a global exploration boom.
The country may miss a "window of opportunity" due to political instability and a lack of much-needed public and private sector reforms that were keeping foreign investment away, PNG's minister for mines, Moi Avei, told a gathering of miners and investors.
"PNG has a real opportunity to capitalise on the boom in commodities," said Avei, who gave the address, filling in for PNG Prime Minister Michael Somare who was ill.
"However, there is lingering doubt in the marketplace (about its ability). Avei said. "It's been going on for years."
Plans to lay a 3000-km pipeline under the Coral Sea to connect eastern Australia with the remote gasfields of the PNG Highlands and inject up to $US285 million a year into the domestic economy are still under review by ExxonMobil Corp, more than two years after Somare made the project a national priority.
The last big gold discovery was nearly a quarter-century ago on Lihir Island. More recently, the world's biggest mining company, BHP Billiton Ltd, relinquished its stake in the OK Tedi copper mine on environmental grounds.
Mining accounts for about a third of PNG's gross domestic product (GDP), though this contribution is more than washed out by national debt, which this year will account for 55 per cent of GDP, down from 75 per cent of GDP last year.
Hoping to rope in more investment in mining, PNG is abolishing a 2 per cent levy on imported goods – most mining equipment is shipped in as PNG has little domestic manufacturing – and extending foreigners' work visas to 10 years from two.
"The minerals and energy sector is certainly our lifeline," Avei said.
But even if PNG becomes more friendly to the mining industry, other problems persist.
For years, successive governments have failed to combat growing HIV infections, street crime and poverty. More than 200 Australian police have been dispatched to help an understaffed local force patrol PNG's most crime-plagued ditricts.
"Inefficiency in the public sector has become entrenched," Avei said.
PNG's Treasuer Bart Philemon told the conference the government was completing its 2005 budget amid signs the country's coffers were improving.
The national currency, the kina, was stablising, inflation was going down and economic growth was nearing 3 per cent, he said.
PNG is made up of 600 islands, where 85 per cent of its 5.3 million people live subsistence lives in villages clinging to jungle-clad mountains. It is divided by 850 languages, where tribal allegiances dominate and tribes engage in bloody wars.
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