The changes to Papua New Guinea’s Mining Act being considered by the Marape government could benefit the industry, according to John Lewins, Chief Executive Officer of K92 Mining Inc. In this exclusive interview with Business Advantage PNG, he outlines why.

Kainantu operations. Credit: K92 Mining

John Lewins says that some of the changes that are being flagged are ‘actually very positive.’

‘Exploration licences right now only last two years and then you have to renew them. So you spend half your life renewing licences. That is going to be pushed out to five.’

Another area of interest is the variations in the duration of mining licences. A Special Mining Licence (SML) lasts 25 years or more, but a standard mining licence, under which K92 Mining is currently registered, only lasts 10 years. ‘They are proposing to do away with that and have a mining licence for 25 years plus. That is quite positive.’

‘The industry would like to get it done and get it out there. It will remove all this discussion about what could be in it.’

Lewins expects the royalty payments on mining to rise. They are currently set at two per cent plus a half a per cent levy for the operating budgets of the Department of Mining and Petroleum and Mineral Resources Authority (MRA). ‘We would expect that to go up to three per cent.’

Extending leases

K92 Mining’s John Lewins. Credit: IMARC

Lewins says that if a company wants to increase the size of its mining lease in the exploration area because additional reserves have been discovered, this currently cannot be done under the existing Mining Act. There is potential for additional reserves outside K92 Mining’s existing mining lease.

K92 Mining Inc. operates the Kainantu gold mine in Eastern Highlands Province. Last month, the Vancouver-based gold producer announced positive additional drilling results from the Kora North extension of Kainantu.

‘You have to go to apply for a new mining lease for that new area. In the new Act, we believe they will bring in something that will allow an extension of a company’s mining lease which should be an easier way of doing things.’

‘They are certainly indicating that they will focus more on graft and corruption, which they feel has been an issue in the past.’

Lewins believes it is unlikely the new legislation will be tabled this year, noting that the discussions have been going for a decade.

‘We are still engaged, as are the Chamber of Mines and Petroleum, individual companies and the MRA. They are trying to get it finalised. Generally, the industry would like to get it done and get it out there. It will remove all this discussion about what could be in it.’

Lewins says that, as within every government, there is ‘a range of different views’ – from wanting greater government ownership to being averse to government ownership because it has failed in the past.

‘You get all those diverse views in Parliament. They are certainly indicating that they will focus more on graft and corruption, which they feel has been an issue in the past.

‘They want to make ministers more accountable and at the same time are looking to remove discretionary power from minsters. They are saying: “Our laws should apply.” That gives you greater certainty.’