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Amendment would sanction private ownership of resources

PORT MORESBY, Papua New Guinea (PNG Post-Courier, August 25, 2009) – The Chamber of Mine and Petroleum, a peak body representing the mining and petroleum companies in the country is totally opposed to the proposed amendment to the Mining Act 1992.

The chamber said the ownership of mineral, oil and gas resources is vested with the State and the State is the only resource owner.

Chamber executive director Greg Anderson said yesterday that the arguments presented for private ownership of resources were grossly misleading and simplistic and "will stop any future resource development in PNG".

"The simple fact is that if a change is made to mineral ownership, exploration will die and there will be no new resource developments as the risk profile will be unacceptable to any potential developer. There will be a complete breakdown in the well established, internationally recognised system that underpins resource development in PNG. There will be no benefits for anyone," Mr. Anderson said.

"State ownership of minerals is vital to the development of PNG as a nation. State control of resources allows them to be developed for the benefit of all citizens as required by the Constitution.

"The resources are managed in an effective and orderly manner that is recognised internationally and accepted by the investor. Private ownership of minerals means that a few lucky individuals could expect to become rich at the expense of the rest. Papua New Guinea cannot develop as a nation under these conditions; it would splinter into groups driven by self interest.

He said an exploration tenement gave the holder the right to explore for minerals or oil and gas which is an expensive and high risk activity.

The explorer’s only security is the tenement and the guarantee provided by the State that the explorer will have the right to develop any discoveries made on the tenement in accordance with requirements and obligations set by the State, Anderson said.

"If any potential explorer believes that the State will not, or cannot, provide this guarantee with an acceptable risk profile then the explorer will not invest exploration dollars."

He said the real issue of resource development in PNG was governance and transparency associated with the use of benefits generated from resource development and change in ownership would not address these problem but otherwise increase the risk of a certain group or individuals becoming more rich at the expense of the rest of the people in the country.

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