Porgera mine output is removed from Barrick’s full year guidance, Westpac announces new division for Westpac Pacific, and Australia and New Zealand agree on a ‘trans-Tasman COVID-safe’ travel zone. The business news you need to kick-start your week.

Australia’s Scott Morrison and New Zealand’s Jacinda Ardern on 22 February 2019 during the annual Australia-New Zealand Leaders’ Meeting. Credit: Australian Department of the Prime Minister

In its half-year results presentation, Westpac announced that the bank needed to simplify and ‘focus on its Australian and New Zealand banking business.’ To do so, Westpac will move wealth platforms, superannuation and retirement product, investments, general and life insurance, and auto finance to a new Specialist Division. Westpac Pacific will also be managed in this division ‘to simplify the Institutional bank portfolio.’

Westpac said in a statement: ‘Over the coming months we will conduct a detailed strategic review on the best options for these businesses. This will include considering whether they would ultimately be more successful under different ownership.’ (Westpac)

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In its latest Monetary Policy Statement, the Bank of PNG is forecasting for real growth in PNG of  about 0.3 percent, but warns that negative growth could happen ‘in a worse-case scenario if the impact of the Covid-19 pandemic is not effectively contained.’ The bank is assuming assuming ‘that the spread and impact of Covid-19 will be contained in 2020, with minimal effect in the medium term (2021 to 2022).’ (Bank of PNG)

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The first half of 2020 has been bleak for the PNG National Stock Exchange (PNGX): the market value has declined 7 per cent since the start of March. David Lawrence, PNGX’s Chairman, said: ‘PNGX is currently an illiquid market, meaning there is little trading. We haven’t seen any change in trading volumes since the beginning of March to the end of April.’ (The National)

Resources

Wafi-Golpu is a joint venture between Newcrest Mining Limited and Harmony Gold Mining Company Limited. Credit: Wafi-Golpu Joint Venture

The Post-Courier reports that Newcrest Mining ‘has applauded’ the Prime Minister’s support for the K16.7 million Wafi-Golpu mine project, a joint venture between Newcrest and South African mining company Harmony Gold. ‘Newcrest has a good working relationship with the PNG government, including in relation to Wafi-Golpu, and we look forward to resuming formal discussions as soon as possible noting the impact of COVID-19 related restrictions on normal business activities,’ a spokesperson for Newcrest reportedly told the newspaper.

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In its latest Operational Update, Harmony Gold has said that although discussions with the PNG government on Wafi-Golpu have been ‘constrained by the COVID-19 pandemic and ongoing uncertainties regarding the provisions and application to the project of proposed new PNG mining regulation,’ Prime Minister Marape has notified Harmony of his intention to progress the discussions because Wafi-Golpu is one of the three priority projects in the country. No timeline has been announced. (Harmony)

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Oil Search’s Managing Director, Keiran Wulff, reportedly said at the Macquarie Australia Conference that ‘right now we are currently looking at whether we will continue production – at this stage it is our intention to  do so.’ Wulff’s quote has been reported in the media as a sign that Oil Search is considering halting its oil production in PNG. The Post-Courier, however, has reported that an Oil Search spokesperson said that ‘no decision has been made to stop production in PNG’.

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The PNG state has lost the legal battle to secure control of the Sustainable Development Program (SDP). The Singapore Court of Appeal upheld its 2019 court determination, which rejected as invalid PNG’s government claim to the SDP. The SDP holds a trust fund of about $US1.4 billion (K4.8 billion) intended for the people of Western Province after the end of the Ok Tedi operations. (RNZ)

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Barrick Gold removed production guidance for PNG’s Porgera gold mine. Barrick shut down the mine in late April after the Marape-Steven government announced it wanted to reach an exit strategy for Barrick (Niugini) Ltd. The mine’s ownership is split 47.5 per cent by Barrick and 47.5 by Zijin Mining. The company also lowered its gold production forecast for 2020 by about 200,000 ounces. ‘The situation is Porgera is rapidly evolving, so we will provide further updates on our outlook in due course,’ said the CEO of Barrick Mark Bristow. (Barrick)

Agribusiness

Coffee farmers from the Makia Coffee Development Cooperative in Eastern Highlands Province now have access to 100 coffee pulpers, an essential piece of machinery that peels coffee berries. The machines cost between K400 and K500 but thanks to the Coffee Industry Corporation’s Productive Partnership in Agriculture Project (CIC-PPAP), the farmers only paid for five per cent (about K20) of the total cost. (Post-Courier)

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The Division of Agriculture and Livestock (DAL) has designated 20 hectares of land to farmers in Erap. The land will grow food to ‘feed the markets around the city [Lae]’. The DAL, National Agricultural Research Institute (NARI), PNG Women in Agriculture, Fresh Produce, Taiwan Technical Mission and Trukai Industries will undertake the project aiming to ensure food security, which has become a concern during the COVID-19 pandemic. (Post-Courier)

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Lae Biscuit presented a donation to PM Marape. Credit: PNG Office of the Prime Minister and NEC/Facebook

The Lae Biscuit Company has donated K200,000 worth of food for those in need. Prime Minister James Marape, Co-founder and Patron of the Sapotim Wantok Foundation, received the container last week. During the event, Marape reiterated his call to Papua New Guineans to work in agriculture.

Power

The Australian High Commission has revealed the six new projects that have been successful under the first round of the Pawarim Komuniti Program, an off-grid electrification program funded by the PNG-Australia Partnership. The projects will be delivered in Enga, Morobe, Madang, West Sepik, Western and Oro. The Pawarim Komuniti Program aims to help PNG meet its rural electrification target. The program has just opened a second call for proposals. More information: www.pawarimkomuniti.org.pg

COVID-19

The Hilton Hotel in Port Moresby has reportedly resumed the operations of its Feast Restaurant and Copper Bar. ‘The health and wellbeing of our guest and team members is currently Hilton’s highest priority,’ said its General Manager John Lucas. (The National)

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The National Research Institute of PNG has published a document on the impact of the COVID-19 pandemic on PNG’s international trade. The institute suggests that the value of PNG exports will fall by at least 13 per cent (more than K5 billion) because of the COVID 19 pandemic and that the scale of its impact is still difficult to determine. (PNG NRI)

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The leaders of Australia and New Zealand have agreed to ease travel restrictions between the two countries as soon as it is safe, which will help benefit both countries by kick-starting the tourism sector. Australia’s Prime Minister Scott Morrison and New Zealand’s Prime Minister Jacinda Ardern said in a joint statement that ‘they need to be cautious’ as they progress the initiative. The leaders also suggested that once they establish the travel arrangements between Australia and New Zealand, they could consider looking at opportunities to broaden the ‘travel bubble’ to the Pacific.