BY THIERRY LEPANI and GORETHY KENNETH
Papua New Guinea has entered into a deal to refine all its gold with a Singapore based company, despite the necessary legislation – the National Gold Corporation Bill 2021 – is yet to be deliberated by Parliament.
Three weeks ago, the Government entered into an agreement with Refinery Holdings Pty Ltd to establish the National Gold Corporation to take carriage of refining the entire country’s gold production in an ambitious mint and refinery project.
The Post-Courier understands that per the agreement, the State will hold 30 per cent equity in the National Gold Corporation while the company will hold 70 per cent.
Section 215 of the 470 page draft National Gold Corporation Bill 2021 that is yet to be enacted by parliament pertains to the National Mint’s exclusivity rights, which states: “The National Mint is the exclusive refiner of all gold mined or recovered from land in Papua New Guinea”.
Prime Minister James Marape was present at the signing ceremony between the State and the company’s representatives James Scobie and Michael Boyd, and said: “This has been talked about for decades, but it is my leadership peers in present government who are now pushing for this major in-country downstream processing project”.
The refinery concept has been around since 2012 when company ‘Gold Partners PNG Pty Ltd’, which is a major shareholder in Refinery Holdings, signed an agreement with Mineral Resources Development Company.
Yet in 2014, BPNG Governor Loi Bakani wrote to State Solicitor Daniel Rolpagarea regarding the proposed National Gold Corporation Bill 2014, to “reconsider the contents of the Bill and its implication on the Central Banking Act 2000, and related Acts.”
Per the legal advice given to BPNG, it stated “State Equity Corporation and MRDC may together hold up to 30 percent of the equity in National Gold Corporation.
“The balance will be held by Refinery Holdings Pte Ltd, a Singaporean company of which at this stage we have been unable to obtain any information” the letter said.
Further, it highlighted major ramifications for BPNG as “the bank’s powers to buy or import gold under section 79 of the Central Banking Act will cease” and transferred to the national mint that would be established.
The proposed Bill has not yet reached parliament, and has been placed in a ‘cart before the horse’ scenario as the framework agreement has been signed by the State while lacking the necessary legislation to legitimatize the deal.
In a NEC submission presented by Mr Marape sometime this year for the approval for the State to enter into the agreement with Refinery Holdings, he said it also paves way for “the previously approved project Bills be submitted to First Legislative Counsel as drafting requirements, and to ensure the Bills are then presented to the next Parliamentary session.”
The Post-Courier has sought answers from the government to ensure that all necessary regulatory and compliance functions are being met in relation to the new deal.
Established gold businessman, Justin Parker said some clauses in the refinery agreement should be removed.
“I’m ready to build a refinery 100 per cent nationally-owned with me as owner of a minor share.
“The deal that the PM has signed is giving them (Refinery Holdings) 60 year rights and renewal of every 30 years forever and ever,” he said.
Mineral Resources Authority managing director Jerry Garry said PNG’s current mining law is very broad with no prescriptive laws under the Mining Act to currently regulate a refinery as such.
“The need now is to regulate this business. We need to have the policies and the laws in place to regulate the business.
“I am always optimistic about life. Expertise and technology is readily available.
“If we have the money we can pay to operate a business like this refinery.
“We welcome the refinery concept into the country but it must operate within our laws and be regulated so that we don’t miss out on the benefits,” Mr Garry said.