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He said this when the landmark agreement was signed on Thursday, October 28, 2021.
“The project begins today and will, for the first time, establish a downstream processing and value-adding industry for gold in Papua New Guinea, one of the most valuable commodity exports in the country,” he said.
“The project will put Papua Guinea on the world map of gold so that it is rightly recognized as one of the most important gold-producing countries in the world in the gold mining and refining industries as well as in the global precious metals and financial markets.”
Prime Minister Marape said downstream processing of natural resources in PNG, including gold, forestry and fisheries, is key to our economic future and job opportunities for citizens and a key policy of his government.
“This has been talked about for decades, but it is my fellow leaders in the current administration who are now pushing for this major downstream processing project in the country,” he said.
“It is the first of many to come. So far, all economic and social benefits from refining and increasing the value of Papua New Guinea gold have been exported to foreign refiners and for the benefit of other countries.
“The project will ensure that we collect all gold produced in PNG and export finished products for companies and individuals in the gold industry.”
Prime Minister Marape said for the first time that all profits, taxes, new US dollar foreign exchange inflows, employment and related benefits from refining gold and precious metals will remain in PNG.
“For the first time, PNG is recognized on the world stage, including by international refined gold regulators such as the London Bullion Market Association (LBMA),” he said.
“PNG is known and recognized as a manufacturer of international standards:
- Investment bars made of gold and precious metals
- Investment coins made of gold and precious metals as legal tender; and
- Other refined gold products.
Prime Minister Marape said the project would create four new world-class companies in the state:
- National Gold Refinery – which will refine all gold and precious metals PNGs and produce gold and silver bars to international standards;
- National Mint – to mint our own currency and the new legal tender, the National Bird of Paradise, as well as investment grade gold and precious metal coins;
- National Gold Bank – to provide specialized banking and trading services for gold and precious metals to the PNG gold mining industry; and
- National Gold – to market PNG gold and precious metals as well as our value-adding bars, investment coins and other products for global investors.
“This is a high-end, value-added business, and for a gold producing nation, we would like to step into this area. Nobody dared dream this dream, but as a government struggling to earn more from our resources, this low hanging economic opportunity is now being seized. “
He said the state has been an equal 50:50 joint venture participant in the project from the start, with 30 percent of the state interests being passed on to our local alluvial miners and landowning companies.
“The state also has the right to acquire majority or full control of the project at a later date, as set out in the project agreement with Refinery Holdings, which are partners on this project,” said Prime Minister Marape.
Refinery Holdings will be the project manager, operator and financier of the project until the state decides to take control.
He said the National Gold Corporation would pay full corporate taxes (currently 30 percent) on its profits from the outset.
“Refinery Holdings will pay full dividend withholding tax on its dividends received from National Gold Corporation,” he said.
“The project will generate significant new dividends and corporate taxes that will be paid to the state – currently projected to be approximately $ 800 million in the first 15 years of operation.”
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