Prime Minister James Marape says the National Gold Refinery & Mint Project Agreement is a milestone and an achievement in the implementation of the Government's ‘Take Back PNG’ policy.
He said this during the signing of the landmark agreement on Thursday, October 28, 2021.
“The project starts today and will establish, for the first time in Papua New Guinea, a downstream processing and value-adding industry for gold, one of the country's most-valuable natural resource exports,” he said.
“The project will put Papua Guinea on the world gold map, so it is rightfully recognised in both gold mining and gold refining industries, and in global precious metals and financial markets, as one of the world's most-important gold-producing countries.”
Prime Minister Marape said downstream processing of natural resources in PNG, including gold, forestry and fisheries, is the key to our economic future and employment opportunities for citizens and is a key policy of his government.
“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,” he said.
“It is the first of many to come. Until now, all the economic and social benefits from refining and value-adding to Papua New Guinea's gold, have been exported to foreign refineries and for the benefit of foreign countries.
“The project will ensure that we account for all gold produced in PNG and export out finished products for companies and individuals who are in the gold industry."
Prime Minister Marape said for the first time all the profits, taxes, new US dollar foreign exchange inflows, employment and related benefits from the refining of gold and precious metals will stay in PNG.
“For the first time, PNG will be recognised on the world stage, including by international refined gold regulatory bodies, such as the London Bullion Market Association (LBMA),” he said.
“PNG will become known and recognised as a producer of international standard:
- Gold and precious metal investment bullion bars
- Gold and precious metal legal tender investment coins; and
- Other refined gold products.
Prime Minister Marape said the project would establish four new world-class businesses in the State:
- National Gold Refinery - which will refine all of PNG's gold and precious metals and produce international standard gold and silver bullion bars;
- National Mint – to mint our own currency and the new National Bird of Paradise legal tender and investment grade gold and precious metal currency coins;
- National Gold Bank – to provide dedicated gold and precious metal banking and trading services to the PNG gold mining industry; and
- National Gold – to market PNG gold and precious metals, and our value-added bullion bars, investment coins and other products global investors.
“This is a high-end value-adding business and for a gold producing nation, we want to move into this space. No one has dared to dream this dream, but as a Government fighting to earn more from our resources, this low-hanging economic opportunity is now harnessed.”
He said the State is an equal 50:50 joint venture equity partner in the project from commencement where 30 per cent of State Interest will be passed to our local alluvial miners and landowner companies.
“The State also has the right to buy majority or total control of the project at a time into the future as defined in the project agreement with Refinery Holdings who are partners in this project,” Prime Minister Marape said.
Refinery Holdings will be the project manager, operator and financier of the project until the State decides to buy control.
He said the National Gold Corporation would pay full corporate taxes (currently 30 per cent) on its profits from commencement.
“Refinery Holdings will pay full dividend withholding tax on its dividends received from National Gold Corporation,” he said.
“The project will generate substantial new dividends and corporate taxes paid to the State - currently projected at approximately US$800 million over the first 15 years of operation.”