ABC Radio Australia
Papua New Guinea has improved its ranking on the Resourcestocks Magazine 2013 World Risk survey.
The survey assesses risks mining and energy investors face in the country, including soverign and financial risk, as well as issues such as red tape, green tape and access to land and infrastrucutre.
With fewer countries ranked this year, PNG jumped to 30th place, up from 59th place last year.
Resourcestocks Editor, Anthony Barich, says the approach taken by the government helped boost PNG’s rank.
Presenter: Jemima Garrett
Speaker: Anthony Barich, editor, Resourcestocks Magazine
BARICH: Certainly, with the government change last year it is very keen to advance the country and it’s putting key social and physical infrastructure to try and improve things. The Prime Minister last year did give a talk outlining, I think the quote was that frankly there have been far too much red tape inefficiencies at all levels of government. So I think there’s a real sense there by operators and we publish in there as well with pngindustrynews.net and PNG Report, as well, our sources there basically say that those working in the country believe that it’s a great place to operate.
GARRETT: You say that the energy industry has contributed to the improved ranking too, why?
BARICH: Certainly well obviously it’s got 19 billion dollar LNG Project to go online next year, and three following up behind that as well. I think that with the fact that these big companies are prepared to make long-term investments there does send a strong message that you can actually operate there.
GARRETT: PNG is still in the bottom 25 per cent, and there are countries like Algeria, Colombia, Tanzania ahead of it. Does PNG actually really have anything to celebrate here?
BARICH: Well that’s a good point, I think those other countries are really similar, yes they’re a few rankings up above one or two or three above PNG, but they’re all similar though in a sense Jemima that they’re all coming from behind the eight ball position and they’re all trying really hard to tighten up their regulations, to try and get rid of illegal miners, which is what places like Colombia in Latin America are really struggling with, even the more established places like Chile are dealing with these issues as well. So I think that while Colombia and PNG and these places still have a long way to go, there’s no denying that, but I think that it just signals the fact that well a lot of major companies are going in there, junior companies are actually in there and thriving, even in this difficult commodity climate, and things generally look pretty good moving forward, although obviously there’s a long way to go.
GARRETT: The takeover of the Ok Tedi mine by the PNG government happened after this survey was taken. How is that affecting investors?
BARICH: Yes I think certainly there’s thoughts all around Asia, Indonesia especially with the thoughts that well countries have put in these policies like Indonesia where after ten years of production in metals they’ll takeover the mine, 51 per cent and that kind of thing. In Africa people have been concerned by a rising tide of nationalism. So it’s understandable that these things have happened, but what we’re talking about here in PNG, it’s important to remember that we’re not talking about a specific policy here that says we will takeover your mine like Indonesia’s doing. What the Ok Tedi thing is, is a unique and very complex set of circumstances that have gone over a number of years since this issue has been going on. There have been several governments, so it’s not like this government’s kind of just come in and decided right, we’re going to take this over, especially with the environmental issues that are kind of part of the cause of this whole thing. I can’t see this situation happening again in modern regular, in the times with modern regulation.
GARRETT: So you’d agree with Prime Minister Peter O’Neill when he says this is a one-off?
BARICH: Oh yes, in fact those exact words are what I’ve since spoken to, obviously with the survey results and you look at them and you think well how does that fit in with decisions like Ok Tedi, and investors in the region or investors outside of the country, overseas who are investing in PNG, and juniors and mid-caps that are also in there say to us that look, this is a one-off, this has nothing to do with us, it’s a unique complex set of circumstances which specifically relate to the companies involved in that. So I think that pretty much sums it up.