Banks trading ‘well and above’ preferred kina rate, minister wants business contracts under K10 million to be reserved for Papua New Guineans, and Bakani says reserves will last seven months. Your weekly digest of the latest business news.

PNG Treasurer Patrick Pruaitch says commercial banks have been trading the kina ‘well and above the required points’, sometimes ‘up to 400 points above and that is not what the bank (Bank of Papua New Guinea) wants’. He was responding to questions as to why BPNG had set a kina trading range of 75 points either side of the official reference rate.

In the past week, the bank has dropped the official kina reference rate against the US dollar slightly, from US$0.4130 to US$0.4120.

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Trade Minister Richard Maru says business contracts in any sector worth under K10 million will be awarded to indigenous Papua New Guineans. The Investment Promotion Authority would no longer screen or certify outside investors into the country, adding the government would list and legislate those businesses reserved for Papua New Guineans.

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Bank of PNG’s Loi Bakani

Bank of Papua New Guinea Governor, Loi Bakani, has confirmed the country’s reserves of US$2 billion are equal to seven months’s import cover, adding that revenue from the PNG LNG project is likely to flow within the next six months.

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The chairman of Rabaul’s landowner company, Tavurvur Holdings Limited, Thomas Tobunbun, has called for a new energy ministry to oversee the development of the geothermal industry, describing it as ‘the last frontier resource’.

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The proposed A$800 million merger of energy companies Roc Oil and Horizon Oil has been complicated by an unsolicited takeover approach for Roc Oil by an unknown company. Horizon said it remains committed to the merger, but if a formal takeover offer is lodged for Roc Oil, it will assess its position.

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PNG’s only listed investment fund, Kina Asset Management Limited has recorded 18% growth in 2013, with its investment portfolio rising from K42.35 million to K49.99 million at the end of December 2013. Chairman Sir Rabbie Namaliu told the company’s AGM the increase reflected improving sentiment in global share markets.

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PNG exports declined in April due to broadly lower commodity values, according to the latest ANZ Bank monthly report. A drop in PNG’s imports is attributed to falling capital expenditure in the mining sector.

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A three-year rally in LNG prices is cooling as Asia-Pacific supplies jump and demand slows from Japanese utilities preparing to restart nuclear reactors. A Bloomberg survey quotes traders predicting supplies may cost US$18 per MMBtu in the first quarter of 2015, down 9% from February 2014.

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Oil Search says ExxonMobil intends to drill nine development wells in the Hides field as part of the PNG LNG project.

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Officials at the Department of Lands are preparing to cancel the 25 Special Agriculture Business Leases (SABL), as recommended by the 2013 Commission of Inquiry report into how leases were obtained, sometimes without landowners’ permission.

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PNG Coffee beans Credit: AFP

Coffee Industry Corporation chief executive Anton Benjamin says one million bags of coffee were exported last year, generating K500 million. In 2011, coffee production peaked at 1.5 million bags, earning K927 million.

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Canadian miner WCB Resources has recommenced exploration at its Misima Island gold project in Milne Bay province. 

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The Certified Practising Accountants PNG Council says of its 3,673 registered members, only 490 are Papua New Guineans.

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The National Fisheries Authority (NFA) has sent its inshore patrol craft Gabut to Vanimo, West Sepik, to protect the country against illegal fishing, after the European Union warned PNG it could ban imports. The NFA and Papua New Guinea Defence Force will run joint operations.

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Meanwhile, a new K800,000 fish storage facility has opened Vanimo. Acting Governor Paul Negai said the province had been losing its fish market because it was not looking after its marine resources.

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New Zealand’s Environmental Protection Authority has torpedoed a proposal for the first seabed mining venture off the coast of Taranaki by Trans Tasman Resources, which had proposed mining for iron ore 22 kilometres offshore.

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A 15-month NZ$50 million (K117 million) project to modernise Nadi International Airport in Fiji begins in mid-July. Plans include adding an extra 4,000 square metres of floor space, a new check-in terminal and extra counters.

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Kawajelein Atoll. Credit: R

And, finally, the United States military says it has successfully intercepted a simulated incoming missile over the Pacific Ocean for the first time. The successful test on Kawajelein Atoll, Marshall Islands, follows numerous failures to hit a simulated missile since testing began ten years ago.