PM promises to upgrade Gulf–Southern Highlands Highway, 50% of Air Niugini to be sold by year’s end, and a ban on foreigners buying land.  Your weekly digest of the latest business news.

The O’Neill government has allocated K20 million to upgrade and seal the Gulf–Southern Highlands Highway by the end of the current parliamentary term.  Prime Minister Peter O’Neill says the government would then start sealing the Ialibu-Kagua road and then move on to Erave afterwards. O’Neill is the first PM to visit the Kagua-Erave district. ‘Even though the Southern Highlands Province is a natural resource rich province, when you look at how governments have acted in Kagua-Erave, we really have little to show for this contribution to national wealth,’ he told locals.

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Prime Minister Peter O’Neill has told  the Australia-Papua New Guinea Business Council in Sydney 50 per cent of Air Niugini will be on the market by the end of this year. He said preference would be given to PNG-owned investors. He also said the government would soon introduce the Kumul restructuring programme.

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Lands Minister, Benny Allan

Foreigners and investors entering PNG will no longer be able to purchase land, once changes to the Land Act are passed into law. Lands Minister, Benny Allan, says the changes will restrict ownership of land to nationals only, but could be sub-leased to foreigners or on a joint venture basis.

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Trade Minister, Richard Maru, says the government has offered to partner with a major Belgian chocolate company, The Belgian Chocolate Group, to undertake a feasibility study to set up a chocolate factory in Wewak, East Sepik Province.

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Petrol, diesel and kerosine prices will rise this month, says the Independent Consumer and Competition Commission CEO, Dr Billy Manoka, due to the increase in international oil prices. In Port Moresby, petrol prices will increase by 24.30 toea per litre; diesel prices will increase by 17.00 toea per litre,  and kerosene prices will increase by 19.13 toea per litre.

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Oil Search and Santos say water, not gas, has been found at the Hides Deep well, ending hopes the discovery of gas under the existing field supplying PNG LNG could have led to a cheaper expansion of the project. A company spokeswoman says the failure of Hides Deep won’t affect the expansion of PNG LNG because ExxonMobil and Oil Search had already designated P’nyang to underpin a third LNG train at the project. But a landowner group says it opposes to the Government’s move to integrate P’nyang with the PNG LNG project.

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Sir Brown Bai

Petromin Holdings is considering closing down the Tolukuma gold mine in Central Province. Chairman Sir Brown Bai says attempts to bring in a credible partner have not been successful and that high operating costs and low gold prices are challenging the operation.

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The reopening of the Kainantu mine in September 2015 under new developer K92 Mining, will create enough new jobs to employ 300 to 400 locals in the area and the Highlands region, says COO Brian Lueck. K92 is owned by Canada’s Otterburn Resources Corp.  Otterburn expects a report soon confirming the mine contains an estimated 340,000 ounces of gold.

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Barrick Niugini Community Relations Manager, Timothy Andembo, says the company selling off all its businesses in PNG was part of a decision to sell off all Barrick mines and assets in Asia Pacific after making losses.

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Marengo Mining CEO Pieter Britz says he’s encouraged by the results of a recent drilling programme at its Rima Prospect, which is part of its Yandera copper project in Madang province.

Nambawan Super has declared a 7 per cent boost to members’ accounts, following a profit of K388 million in 2014. But the PNG government owes Nambawan Super more than US$800 million in outstanding contributions, according to CEO, Garry Tunstall. Current payments are up-to-date because they are now done electronically and come through on a regular basis. He says 99 companies have debts to Nambawan Super.

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Origin Energy’s Lesieli Taviri

PNG is not exempt from the global demand for new skills and talent, according to Origin Energy ‘s PNG General Manager and chair of Business Coalition for Women, Lesieli Taviri. ‘War for talent is real’ she said at the opening of the City Pharmacy Group’s Women in Leadership programme.

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Bank South Pacific is removing the K3.50 service fee charged on the deposit and processing of cheques. CEO Robin Fleming says it follows the introduction of the Kina Automated Transfer System (KATS) by the Bank of PNG.

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Small businesses in Manus are not benefitting from the asylum processing centre, says local businessman, Hans Poiou. He says contractors in the Australian-funded projects are importing their materials, and not using local suppliers.

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Rapopo Resort’s James Pang and partner

Rapopo Plantation Resort, which sprouted from nothing after the volcanic eruptions in Rabaul, is about to change hands. James Pang, who used to operate a trade store in the Kokopo area, is returning home as the major shareholder of the resort. Brian and Beverley Martin sell up at the end of this month.

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China has lowered its growth target to around 7% for 2015, from about 7.5% in 2014. Ratings agency Standard and Poor’s says the lower target is credit positive, reflecting a more sustainable but still high rate of expansion that does not jeopardise long-term stability.

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New research from Melbourne University and California University has shown that CEOs with multi-million-dollar pay packets are not necessarily working in the best interests of shareholders,  and there may be a case to cap their pay. It suggests that giving CEOs $10 million bonuses encourages them to make short-term decisions rather than work closely with the board and in the best interest of shareholders.

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And finally, two Tongan businessmen GP Orbassano and Branko Sugar visited Tonga’s newest volcanic island last week. In a risky adventure they landed on the black beach and climbed to the highest point of the crater rim where GP photographed the green crater lake that smells of sulphur. They say in January the crater was venting steam and ash explosions.