The sky is the limit as Papua New Guinea’s remotest province sets off on a remarkable course of sustainable development.

The river port of Kiunga on the Fly River. Credit: OTML

Also unofficially referred to as Fly River Province, PNG’s largest province by area is also one of its least developed. Vast, remote and with a population density of less than two people per square kilometre (only slightly higher than the Western Sahara), it has been variously referred to as the country’s ‘wild west’ and its ‘final frontier’.

Dramatic change

On a recent visit to the province, Business Advantage discovered dramatic change in the air. The commercial hub of Kiunga was bustling while the sleepy provincial capital of Daru was also busy. Flights and hotels were fully booked as a result of a raft of large-scale infrastructure projects and a sudden influx of companies involved in extensive hydrocarbon and mineral exploration.

Western Province Governor Dr Bob Danaya

Major industry

The major economic driver of Western Province is the Ok Tedi copper and gold mine in its far north. Serviced by the mining town of Tabubil, the mine has been responsible for a large portion of PNG’s GDP for many years, and a project is underway to extend its life for another 10–15 years likely to be. What is less well known is that the province also also possesses significant rubber, aquaculture, forestry and fisheries sectors.

New infrastructure brings down barriers

It has long been known that the province’s 98,048 square kilometres land mass and coastal waters were endowed with a wide variety of valuable natural resources, not only minerals and hydrocarbons but also spectacular biodiversity. Its outstanding flora and fauna make it a natural for tourism development. However, the barrier to private sector development in the province has always been the immense logistical challenges that operating in the province posed.

Now, however, a range of transformational infrastructure and transport initiatives is underway, such as the Western Province Communications Project, which has placed communications towers across the Province, an upgrade of Daru airport and the introduction of a first passenger ferry on the province’s main artery, the mighty Fly River. It may be early days, but initial progress has already improved the lives of the province’s 185,000 inhabitants, about 70% of whom live in rural areas.

KEY STATISTICS ON WESTERN PROVINCE

• Western Province population 185,000 (est.)
• Land area 98,048 km2
• Provincial capital Daru (pop. 13,496)
• % of population with annual income of K20 (US$9) or less 36%
• Annual population growth rate 3.5%
• % of population under 15 years of age 45%
• Major Industries Mining and petroleum, rubber, aquaculture, fisheries, forestry

Sources: OTML/Business Advantage Papua New Guinea

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Stragically placed

Western Province also shares a land border with the Indonesian province of Papua and a sea border with Australia. ‘Australia is only 15 minutes across the water in a dinghy. Indonesia is also close and has a huge population. That’s why we want to encourage the border area for trade,’ notes Dr Bob Danaya, Western Province’s Governor. ‘As a government, we are happy to work with business. We have a very good dialogue with investors. We have an office in the Province and that is the stepping stone for companies doing business here.’

Ross Garnaut, Chairman of PNG Sustainable Development Program Ltd

Danaya singles out the work of Papua New Guinea Sustainable Development Program (PNGSDP) in particular for its work in developing the province. ‘PNGSDP has already introduced modern telecommunications services throughout Western Province,’ says PNGSDP’s Chairman, Australian economist Ross Garnaut. ‘It is in the process of underwriting the provision of the infrastructure for water and land transport and the urban services that will facilitate investment in resource development, agriculture, sustainable forestry, sustainable fisheries, mineral processing and tourism.’

Sharing in PNG’s boomtime

The economic fortunes of PNG as a whole have transformed the country over the past decade and Western Province is sharing in this new era. With substantial proven reserves of oil, gas and minerals, Western Province itself is now experiencing a flurry of exploration activity, involving major international companies such as Talisman Energy and Highlands Pacific. The challenge is now to broaden its economy by developing further such economic activities as rubber production, aquaculture, forestry and tourism.

KEY INDUSTRIES IN WESTERN PROVINCE

Mining and petroleum

The Ok Tedi copper/gold mine in Western Province is PNG’s largest and looks likely to have its life extended beyond the scheduled close in 2013. Liquefied natural gas looks likely to dominate resources activity in the coming decades, with several companies now operating petroleum prospecting leases in Western Province, notably Canada’s Talisman Energy, which has an aggregation plan for its petroleum leases in the province. Click here for more on petroleum and gas activity in PNG.

Rubber

Rubber is particularly suited to the soils and climate of Western Province, with its high rainfall. There are 8721 hectares of rubber planted in Western Province, and almost 10,000 smallholder growers. China and Germany are major export markets. North Fly Rubber is the major rubber business in Western Province. Under its partnership with Papua New Guinea Sustainable Development Program, a further 2800 hectares of rubber will be added by 2020.

Fisheries

Maru Marine in Daru exports lobster tails to Australia and the United States and also produces barramundi and jewelfish, mostly for domestic consumption. Also in Daru, the Western Province Sustainable Aquaculture Project owns a barramundi hatchery, which produces 500,000 ‘fingerlings’ a year.

Forestry

Western Province has a strong forestry sector, with wood exported to China, Taiwan and South Korea. The largest player is Malaysia’s Rimbunan Hijau group, which has a large plywood factory in Panawaka. Pilot projects are underway to develop exports in high value eaglewood (also called agarwood) and waria waria oil, a product similar to eucalyptus oil, which is obtained from the indigenous waria waria tree.

Tourism

Western Province’s natural history makes it highly suitable for a range of eco-tourism activities, including sports fishing, recreational hunting, birdwatching, trekking, kayaking, cultural shows and village stays. Trans Niugini Tours already operates the popular Bensbach Wildlife Lodge on PNG’s largest lake, Lake Murray.

This article first published in Business Advantage PNG 2012/2013