Mining to Papua New Guinea

(Last updated: 20 Jul 2008)

Trends and opportunities

The market

Australia currently supplies around 65 per cent of total requirements to Papua New Guinea’s mining sector.

Mineral exploration expenditure has been in steady decline. In an attempt to revitalise the mineral sector, the Papua New Guinea government reduced the income and dividend withholding tax levels for mining companies.

Investment incentives are available to legitimate investors. This includes duty-free entry of plant and equipment (if not manufactured or available in Papua New Guinea). In general, the cost of doing business in Papua New Guinea is high and the investment environment is considered risky. This risk is associated with government policy changes, law and order issues, poor infrastructure and inefficient bureaucracy.

Australian banks, law firms and accountants are a ready source of investment advice and should be approached before any investment decision is taken.

The Investment Promotion Authority (IPA) of Papua New Guinea, as well as the Papua New Guinea Department of Mining can provide specific information relating to mining investment.

A significant proportion of mining personnel in Papua New Guinea are Australian and therefore use Australian products and services with which they are familiar. Regular air and shipping services, particularly from Queensland ports, facilitate this supply.

Opportunities

The Papua New Guinea Department of Mining, with support from AusAID, promotes initiatives designed to assist the development of small scale alluvial mining in Papua New Guinea, mostly gold mining. Papua New Guinea’s only gold refinery (run by Metals Refining Operations Ltd) assists with training, field trips, information videos and booklets, as well as the establishment of a supply outlet for tools and equipment to small scale miners.

Competitive environment

To ensure the Papua New Guinea Government, provincial governments and landowner groups receive maximum and equal benefits from its natural resources; the Mineral Resources Development Company Pty Ltd (MRDC) was established as custodian of national mining and petroleum interests.

MRDC purchases government equity in mining and petroleum projects and then on-sells it to Orogen Minerals Ltd (a part-government, part-privately owned company) to participate in the project or take a shareholding. MRDC is an advocate of the landowners and retains equity on their behalf.

The Papua New Guinea Department of Mining allocates all mineral exploration licences and mining leases. It also monitors mining operations and has an important role in determining mining taxation and investment policy in Papua New Guinea.

Tariffs, regulations and customs

Papua New Guinea has a single rate value added tax (VAT) of 10 per cent. The VAT is collected as part of the normal procedure at the point of entry. The customs valuation is calculated according to the cost, insurance and freight (CIF) value of the imported goods and the VAT is also charged on any customs or excise duty paid.

Papua New Guinea has undertaken a process of steady reduction in tariff rates since 1997.

As of January 2006 the tariff rate regime is:

• 0 per cent for goods if Papua New Guinea doesn’t produce that product  
• 15 per cent goods used as inputs to businesses
• 25 per cent for final goods competing with Papua New Guinea production  
• 40 per cent for goods, competing with Papua New Guinea production and designated as in need special protection

Specific duties, expressed in Kina per measure, are levied on beer, matches, and poultry meat, eggs and tobacco products.

Papua New Guinea Customs use the single column based on the Harmonised system. Most duties are applied ad valorem using the World Trade Organisation (WTO) valuation code guidelines of CIF value (as per Incoterms 1990)

Exporters should ascertain the duty rate that applies to its products, before export. Austrade can assist with this process.

Samples of no commercial value are admitted duty-free although sales tax may still be levied. Valuable samples are admitted, subject to invoice declaration, under a deposit or bond equivalent to normal duty. The deposit is refunded on re-export of the samples. The deposit is refunded on re-export of the samples.

Industry standards

Industry standards in Papua New Guinea are based on Australian standards for the most part.

Marketing your products and services

Market entry

Papua New Guinea still relies heavily on personal contact for successful business relationships. Securing initial introductions to technical personnel at the mine sites is usually the most difficult hurdle to overcome.

Personnel at mine sites are not accessible due to:

• Remote locations of the mines
• Difficulty of access by air (charters are operated and paid for by the mining companies)
• Work practices that normally involve a fly in-fly out roster

It is not advisable to arrive unannounced at any mine site.

All the mine sites can be contacted via email with some companies using satellite communications although penetration by the Internet and e-commerce technologies is still relatively low and not all mine personnel have regular or reliable access to computers.

Austrade Port Moresby arranges an annual promotional event designed to bring together potential suppliers with selected mine personnel.

Distribution channels

The major mines have buying offices in Queensland and purchase most of their long-term requirements by public tender. Interested potential suppliers should register their capabilities with these buying offices. Supply or purchasing personnel are located on-site to manage short-term supply issues, ad hoc purchases and maintenance requirements.

Where possible, attempts are frequently made to purchase equipment/supplies and services from sources in Papua New Guinea first. Consequently, partnerships with a local companies or organisations are an advantage.

Regular air and shipping services, particularly from Queensland ports, facilitate supply.

Transport

Despite the close proximity of Australia and Papua New Guinea, freight charges tend to be relatively high due to the fact that ships returning from Papua New Guinea to Australia return virtually empty.

Transit time can vary significantly from a few days to weeks. Rapid delivery of shipping documents is essential as wharf storage dues are levied four days after the discharge of cargo. This is strictly enforced.

All goods must be air or sea freighted for the most part and consolidators are frequently used as consignments are often requested as a size or quantity that can fit on to a small truck or the back of a utility vehicle.

Physical distribution within Papua New Guinea can be complex due to:

• Geographic fragmentation
• Small market centres
• Contrasting demographic centres
• Lack of an extensive transport network

For these reasons, most goods are air or sea freighted. Air courier services are the faster means of means of delivery.

Qantas and Air Niugini service the international passenger and cargo market.

Links and industry contacts

Mining-related resources

PNG Department of Mining – www.mineral.gov.pg
Private Mail Bag
Port Moresby NCD
Papua New Guinea
Tel: +675 321 3093
Fax: +675 321 3701

Investment Promotion Authority – www.ipa.gov.pg
PO Box 5063
Boroko NCD
Papua New Guinea
Tel: +675 321 7311
Fax: +675 320 2237

World Bank Technical Assistance Project in the Mining Sector
PO Box 1906
Port Moresby NCD
Papua New Guinea
Tel: +675 321 0466
Fax: +675 321 0434

PNG Chamber of Mines and Petroleum – www.pngchamberminpet.com.pg 
PO Box 1032
Port Moresby NCD
Papua New Guinea
Tel: +675 321 2988
Fax: +675 321 7107

Mining groups (in Australia)

Highlands Pacific Group – www.highlandspacific.com
Telstra House, Level 4
167 Eagle Street
Brisbane QLD 4000
(GPO Box 3086, Brisbane QLD 4001)
Tel: (07) 3864 0710
Fax: (07) 3221 6727

Ok Tedi Mining Pty Ltd (BHP) – www.oktedi.com
889 Nudgee Road
Northgate QLD 4013
(PO Box 535, Hamilton Central QLD 4007)
Tel: (07) 3267 1265 or 3267 1138
Fax: (07) 3267 1059

Placer (PNG) Pty Ltd (Misima) – www.mining-technology.com/projects/misima
AMP Building, Suite 3 
27 Aplin Street
Cairns QLD 4870
Tel: (07) 4050 5100 or 4050 5146
Fax: (07) 4050 5115

Placer Pacific Pty Ltd (Porgera) – www.mining-technology.com/projects/porgera
6 Fletcher Street
Townsville QLD 4810
Tel: (07) 4771 5733
Fax: (07) 4771 5738

Mining groups (in Papua New Guinea)

Highlands Pacific Group (Ramu and Kainantu) – www.highlandspacific.com 
GPO Box 1486
Port Moresby NCD
Papua New Guinea
Tel: +675 321 7633
Fax: +675 321 7551

Lihir Management Company Ltd – www.lihir.com.pg 
PO Box 789
Port Moresby NCD
Papua New Guinea
Tel: +675 986 4014
Fax: +675 986 4127

Melanesian Resources Group (Edie Creek)
PO Box 1181
Port Moresby NCD
Papua New Guinea
Tel: +675 321 1867
Fax: +675 321 2106

Placer PNG Pty Ltd (Misima Mines Ltd) (Placer PNG Pty Ltd) – www.mining-technology.com/projects/misima 
PO Box 38
Bwagaoia
Misima Island MBP
Papua New Guinea
Tel: +675 643 7044
Fax: +675 643 7024

Morobe Consolidated Goldfields Ltd (Aurora Gold)
PO Box 2013
Port Moresby NCD
Papua New Guinea
Tel: +675 474 6208
Fax: +675 474 6344

Ok Tedi Mining Ltd (BHP) - www.oktedi.com
PO Box 1
Tabubil Western Province
Papua New Guinea
Tel: +675 548 3277
Fax: +675 548 3161

Porgera Joint Venture (Placer PNG Ltd) - www.mining-technology.com/projects/porgera
PO Box 484
Mount Hagen WHP
Papua New Guinea
Tel: +675 547 8274
Fax: +675 547 8111

Tolukuma Gold Mines Ltd (Petromin Ltd)
PO Box 5043
Boroko NCD
Papua New Guinea
Tel: +675 329 9277
Fax: +675 329 9262

Government, business and trade resources for Papua New Guinea

Investment Promotion Authority – www.ipa.gov.pg
Nationwide PNG Pages – www.nationwidepngpages.com  
PNG Directory – www.pngdirectory.com 
Papua New Guinea Business Resources Directory – www.apngbc.org.au

Australia PNG Business Council – www.apngbc.org.au
PO Box 3383
Weston ACT 2611
Australia
Tel: +61 2 6231 9399
Fax: +61 2 6231 9403

Department of Trade and Industry
PO Box 375
Waigani NCD
Papua New Guinea
Tel: +675 323 1179 or 325 5816
Fax: +675 323 1109 or 325 6108

Papua New Guinea Internal Revenue Commission
PO Box 777
Port Moresby NCD
Papua New Guinea
Tel: +675 322 6600
Fax: +675 321 4249

National Institute of Standards and Industrial Technology
PO Box 3042
Boroko NCD
Papua New Guinea
Tel: +675 323 5339
Fax: +675 325 6793

Department of Labour & Employment
PO Box 5644
Boroko NCD
Tel: +675 321 7408
Fax: +675 320 1062

Service providers

Financial

Touche Tohmatsu – www.deloitte.com.pg 
PO Box 1275
Port Moresby NCD
Papua New Guinea
Tel: +675 308 7000
Fax: +675 308 7001

Frank J de Graaf
PO Box 5999
Boroko NCD
Papua New Guinea
Tel: +675 325 6366
Fax: +675 325 0984

KPMG
PO Box 507
Port Moresby NCD
Papua New Guinea
Tel: +675 321 2022
Fax: +675 321 2780

Michael Mayberry Chartered Accountant
PO Box 1988
Port Moresby NCD
Papua New Guinea
Tel: +675 320 1988
Fax: +675 320 1989

PricewaterhouseCoopers – www.pwcglobal.com 
PO Box 484
Port Moresby NCD
Papua New Guinea
Tel: +675 321 1500
Fax: +675 321 1428

Sinton Spence
PO Box 6861
Boroko NCD
Papua New Guinea
Tel: +675 325 7611
Fax: +675 325 9389

Smiths
PO Box 487
Port Moresby NCD
Papua New Guinea
Tel: +675 321 7099
Fax: +675 321 7183

Legal

Allens Arthur Robinson Lawyers – www.aar.com.au 
PO Box 1178
Port Moresby NCD
Papua New Guinea
Tel: +675 320 2000
Fax: +675 320 0588

Blake Dawson Waldron Lawyers – www.bdw.com.au 
PO Box 850
Port Moresby NCD
Papua New Guinea
Tel: +675 309 2000
Fax: +675 309 2099

Gadens Lawyers – www.gadens.com.pg 
PO Box 1042
Port Moresby NCD
Papua New Guinea
Tel: +675 321 1033
Fax: +675 321 1885

Norton White Lawyers and Notaries
PO Box 21
Port Moresby NCD
Papua New Guinea
Tel: +675 321 1788
Fax: +675 321 2195

Pacific Legal Group
PO Box 904
Port Moresby NCD
Papua New Guinea
Tel: +675 321 7477
Fax: +675 321 3491

Warner Shand Lawyers
PO Box 1817
Port Moresby NCD
Papua New Guinea
Tel: +675 325 4422
Fax: +675 325 0682

Logistics

Qantas – www.qantas.com.au/freight/dyn/contacts/australasia
Papua New Guinea Online – www.niugini.com 
Commercial forum – www.pngtradepost.com.pg 
Air Niugini – www.airniugini.com.pg  (the national airline)

Media

Post-Courier Online – www.postcourier.com.pg
The National Online – www.thenational.com.pg
The Independent – www.niugini.com/independent 

Australian resources

Australian High Commission
Godwit Road
(Locked Bag 129)
Waigani NCD
Port Moresby
Papua New Guinea
Tel: +675 325 9333
Fax: +675 325 9183

Operating hours:
Monday to Friday, 7.45am-4.15pm

Department of Foreign Affairs
PO Box 422
Waigani, NCD
Papua New Guinea
Tel: +675 301 4121 or +675 301 4122
Fax: +675 325 4886

Papua New Guinea High Commission
39-41 Forster Crescent
Yarralumla ACT 2600
PO Box E432 Kingston ACT 2604
Tel: +61 2 6273 3322 
Fax: +61 2 6273 3732

South Pacific Trade Commission
Level 30, 133 Castlereagh Street
Sydney NSW 2000
Tel:  +61 2 9283 5933
Fax: +61 2  9283 5948