The Papua New Guinea Chamber of Resources and Energy (PNG CORE) has reiterated its stand in support of building a refinery in the country that the state must build through Kumul Minerals Holdings Limited.
Kumul Minerals has the financial and technical capacity to undertake gold refining in PNG, the Chamber said in a statement.
Anthony Smaré, PNG CORE President, highlighted the financial and technical capabilities of Kumul Minerals during an information briefing to the business community on May 9 at the University of Papua New Guinea in Port Moresby.
He questioned the preference given to Refinery Holdings Limited of Singapore, citing the firm’s lack of financial resources, gold industry experience, and technical capacity.
Referring to a report obtained by PNG CORE, Smaré pointed out that Refinery Holdings' last financial results, filed in June 2023, indicated a company worth approximately $20 million.
He questioned why a company with no track record in gold refining and negative financial standing would be favored over PNG’s own Kumul Minerals Holdings Limited, which boasts significant investments and expertise in the gold industry.
With existing investments in gold through Ok Tedi and Porgera and a net worth exceeding 8 billion Kina, Kumul Minerals is also staffed by Papua New Guinean professionals with extensive experience in the sector, Smare noted.
The company is also engaged in feasibility studies with Ramu Nico for the development of a base metals smelter, aligning with its mandate to enhance the country's mining capabilities.
Smaré emphasized that a new gold refinery, with a capacity to process 3 million ounces of gold, could be constructed in either Lae or Port Moresby for an estimated cost of K60 million, well within Kumul Minerals' financial capacity.
Despite the traditionally thin margins in the gold refining business, Smaré expressed confidence in Kumul Minerals' ability to make the venture successful.
“The PNG mining industry has no objection to a new gold refinery being built, but it does not need to be done under any special new laws or under an environment of a regulated gold monopoly. If a gold refinery is to be created, it can be done by existing operators in PNG such as Kumul Minerals,” he said.
“A new gold refinery with capacity to process 3 million ounces of gold can be built in either Lae or Port Moresby for an estimate of K60 million. This is well within the financial capacity of Kumul Minerals. Although the gold refinery business traditionally has very thin margins, it is our view that Kumul Minerals has the capacity and capability to make it work,” the PNG CORE leader said.
Moreover, Smaré advocated for the establishment of a 100% PNG-owned gold refinery by Kumul Minerals, emphasizing that it can be achieved without the need for special new laws or a regulated gold monopoly.
He highlighted that Kumul Minerals could undertake the project without compromising the independence of the Bank of PNG or impacting existing mining agreements and laws crucial to the country's governance.
“Better yet, Kumul Minerals can build a 100% PNG-owned gold refinery without an NGC Bill, without a gold monopoly, without a gold police, without any attacks on the independence of the Bank of PNG, without overriding all the project agreements of existing mines, and without overriding 26 important PNG laws, and impacting the work of the other important government agencies and departments that serve the PNG people,” Smare said.
Kumul Minerals has expressed readiness to take on the challenge of gold refining in PNG, urging stakeholders to reconsider the decision to favor foreign entities over local expertise and capacity.
In light of PNG CORE’s briefing to the business community, a consultation workshop was organized by the Ministry of Mining on May 15th in Port Moresby, purposely for the stakeholder’s consultation workshop on the National Gold Corporation Bill 2024.
PM Marape Addresses Stakeholders Consultation
Prime Minister Hon. James Marape in his opening remarks during the stakeholders’ consultation, pledges support for the gold refinery establishment.
He reaffirmed the government's unwavering commitment to establish a gold refinery, underlining the necessity of reducing reliance on foreign processing of natural resources, particularly gold, which often results in importation of finished products.
He emphasized the transformative potential of local downstream processing, citing examples such as the Porgera project, as pivotal steps towards economic self-sufficiency.
"Establishing a gold refinery locally will enable us to better manage our resources, bolster our economy, and foster sustainable growth domestically," stated Prime Minister Marape.
He highlighted the significance of leveraging internal resources for economic prosperity, citing examples of successful developmental models adopted by other nations.
Mr. . Marape clarified to the consultation participants, including industry professionals, representatives from various sectors of government and the private sector, and ordinary citizens that his government is committed to improving the country's future through effective legal and policy reforms.
He assured that the National Gold Corporation Bill 2024 is designed to benefit PNG without negatively impacting existing mining businesses or their contracts.
“This Bill in no way intends to disarm mining businesses of their contracts, or deter investors on them return upon investment. In fact, this Government wants to add value to the mining industry of the country. We will give you an option to refine your golds locally and if you so wish sell your gold at world market price locally,” the Prime Minister clarified.
Mr. . Marape assured stakeholders that the bill aims to enhance the country's economic landscape without jeopardizing existing mining operations or investor agreements.
He clarified that the bill aims to add value to the mining industry by providing options for local refinement and sale of gold at international market prices.
Encouraging constructive engagement, the Prime Minister invited feedback from industry experts, government representatives, and citizens alike, emphasizing the government's receptiveness to diverse perspectives. He reiterated the importance of transparency and collaboration in shaping legislation for the nation's benefit.
“We are open to views and advice from industry professionals or the general public on this Bill, and that is why we are having this consultation. We have made our stance and intention on the Bill clear for the benefit of Papua New Guinea. But if you have other views on this, you are free to tell us where we can improve things so that this Bill is properly presented in Parliament, where everyone knows what it will bring about into the future," he said
Stakeholders Consultation Workshop
The stakeholder’s consultation workshop included:
- Comment session by stakeholders and the public
- Presentation of Amendments to Mining Act 1992 by the Secretary of Mining Secretary, Mr. . Harry Kore
- Presentation of Amendments to Mine Safety Act 19977 by the Deputy Secretary Mining, Mr. . Winterford Eko
The panel of experts were from relevant state agencies and industry participants.
The Managing Director for the Mineral Resources Authority (MR. A), Mr. Jerry Garry, commended all participants in the consultation and urged all stakeholders to submit written proposals to the working committee.
The Minister of Mining Hon. Muguwa Dilu, MP, during the stakeholder consultation made a commitment to see that a business modality was created and presented to stakeholders and business.
He stated that it is his responsibility to write to the Prime Minister to increase the consultation process on the National Gold Corporation Bill to 6 months.
