Sunday, 5 August 2018

How can you pay for ownership of something you own already??

By Sam J Kaupa - Mining Engineer

I see politicians boasting in Parliament about equity and ownership of Mining and petroleum projects. I will simply urge them to discuss and debate these issues of national importance and become legislators and policy makers and rectify/amend legislation that deals with getting the best for our people rather than continue to get fed the bones while the meat is siphoned elsewhere.

I'll give you people some free advice. You all should learn from your stupid inexcusable mistakes and improve for a better deal for our people. Unless you change the Mining Act and related legislation, we will still be fed bread crumbs and denied what we rightfully should get as resource owners.

To the point, govt should enact laws to get an 5-10% of free on board (FOB) export revenue as royalty and impose super profits tax (or similar) at 70% of the incremental earnings if the projected commodity price exceeds that of the original price submitted in the bankable feasibility studies. Only then you can have see a windfall to support your deficit budgets and pay off your debts.

Why this wasn't done to existing mining projects by way of amendments to the current revised Mining Act and policies is beyond me. Such a loop hole is capitalized by mining companies such as Lihir and Porgera who have never declared a serious profit since they started operations 25-30 years ago to avoid paying royalties to landowners and dividends to PNG Govt as a shareholder, because these are calculated based on profit.

They avoid this by capitalizing their profits by acquiring under-performing operations then selling them at a fortune. To prove my point as an example - Lihir in 2006 bought an unprofitable Ballarat Gold project (Aust) for $350M and offloaded it in 2010 for a mere $4.5M.

In 2008 it bought the Bonikro Mine in Ivory Coast - Africa from Equigold for USD$1b - and in Dec 2017 (Newcrest who acquired Lihir) divested the project for a mere $81M. This is what I mean - they take our money and use it elsewhere which is not profitable. PNG is and hab been a cash cow for ever big multinational companies operating in PNG.

Placer Dome (which was acquired by Barrick) operator of Porgera Gold Mine, started in Bulolo in the 1920-30s and made the first bar of Gold there. So stop bashing our intelligence, Mr Parkop. You get the policies right or else you are pissing in the wind.

This money squandered should have been declared profits and paid royalties and as dividend. If I were you, I will divest in my shares and get royalties for free.


How can you pay for ownership of something you own already??:? 

Sam J Kaupa (Mining Engineer) - email:

No comments:

Post a Comment