PNG PM Marape Orders Tighter Oversight Of State Mining Assets

PNG Prime Minister James Marape has instructed Kumul Minerals Holdings Limited to tighten its investment controls and strengthen supervision of major state mining interests, particularly Ok Tedi and Porgera.

Speaking at the company’s Annual General Meeting, Mr Marape said KMHL needed a single set of investment rules to guide decisions and ensure public assets were backed by sound financial analysis, profitability and sustainable returns.

PNG Prime Minister James Marape

“I want us to have investment guidelines, one rule book that guides all of us,” he said.

“We don't want to be out shopping for all manners of submissions that go against our investment guidelines. A clear investment guideline must be in place.”

Mr Marape said investment proposals should be assessed against clear financial information, allowing KMHL to provide Cabinet with sound advice when major decisions were being considered.

He said the company’s growth must also be balanced with its ability to remain financially sustainable, particularly as the Government considers dividend expectations and the need to reinvest earnings into its assets.

“The company must survive. The company must grow from strength to strength,” he said.

The Prime Minister also raised the need for further discussions on PNG’s Sovereign Wealth Fund and clearer arrangements governing community benefit funding.

However, he stressed that KMHL’s core responsibility should remain the management of profitable investments capable of contributing to national development.

Mr Marape placed particular emphasis on Ok Tedi Mining Limited, saying KMHL needed a straightforward reporting and management relationship with the major copper and gold operation.

“I want clear visibility on Ok Tedi and the line of relations with Ok Tedi,” he said.

“Ok Tedi is a subsidiary of Kumul Minerals only. The line of relationship must not be convoluted. There must not be blockages.”

He said the KMHL board and management needed to maintain effective oversight of the state’s interests and ensure information moved through clearly defined channels.

On Porgera, Mr Marape said the mine remained another major priority for the state-owned company.

He noted that KMHL’s interest had been reduced from 36 per cent to 30 per cent under government arrangements, saying the change was aimed at supporting wider local participation and keeping the operation functioning.

“It is better to have 30 per cent of an operating mine than 36 per cent of a mine that is not operating,” he said.

Mr Marape said the Government also intended to remain positioned to exercise its rights should ownership arrangements at Porgera change in the future.

He further identified Wafi-Golpu as a major opportunity for KMHL, encouraging the company to pursue interests in large resource projects capable of producing long-term benefits.

The Prime Minister said the company should concentrate on major investments rather than spreading its resources across smaller ventures.

He expressed confidence in the experience of the KMHL board and urged its directors to build an enduring state mining company for future generations.

“We need a strong and sustainable state-owned mining company that can continue to benefit Papua New Guineans,” Mr Marape said.