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Commodity firms push to meet new Papua New Guinea PM as he sets out agenda

Published 05/06/2019, 06:02
Updated 05/06/2019, 06:05
© Reuters. James Marape is seen at Government House after arriving to be sworn in as the new prime minister in Port Moresby
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SYDNEY (Reuters) - Commodity companies are pushing to meet Papua New Guinea's new prime minister, who is set to deliver a nationwide address on Wednesday as he starts to overhaul the way the gas-rich country manages its vast natural resources.

James Marape's speech is due to be broadcast around 6 p.m. local time (0800 GMT), just as thousands around the rugby league-loving nation gather at their televisions ahead of the State of Origin match, a big derby in Australia.

The former finance minister promised he would be "taking back" the economy under his leadership when parliament elected him prime minister last week in the wake of Peter O'Neill's resignation from the position.

Marape had quit as finance minister over the government's handling of a gas agreement struck in April with French oil major Total SA (PA:TOTF) and rode a wave of discontent over that deal, and an earlier one with ExxonMobil (NYSE:XOM) Corp, into the top office.

Mark Bristow chief executive of the world's second-biggest gold producer, Barrick Gold Corp, on Monday met Marape in the capital, Port Moresby, to negotiate an extension to a large mining lease expiring in August.

"We are engaging with the government to breathe new life into our long-standing partnership," Bristow said in a statement.

Barrick and China's Zijin Mining each own 47.5 percent of the highlands' Porgera mine, which Barrick said has paid 4.2 billion kina (948.7 million pounds) in taxes and royalties since it began operations in 1990.

"To sustain mine operations, however, it will require a significant capital injection, and it is difficult to justify that kind of investment without the security of an extended mine lease," Bristow said.

Other commodity firms, as well as the diplomatic community, will be paying close attention to the speech and the announcement of Marape's ministry later in the week.

Newcrest Mining, which runs the Lihir gold mine in the country and is also developing one of the world's largest untapped reserves there in a joint venture with South Africa's Harmony Gold, has written to Marape but has not met him since he became prime minister, a spokesman said.

Total has said it expects April's contract signed by the previous administration to be honoured.

Paul Barker, executive director of the Institute of National Affairs, a think-tank based in Port Moresby, said the resources sector would have to prove it was making adequate contributions to the economy.

© Reuters. James Marape is seen at Government House after arriving to be sworn in as the new prime minister in Port Moresby

Local media has reported that coffee growers in the country have been pushing for reform of the government-subsidised sector.

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