Recovery depends on Porgera, Wafi, Papua LNG

THE economy stands to make a quick recovery this year if the government acts early to facilitate recovery in a fragile environment.
Recovery depends on Porgera, Wafi, Papua LNG Recovery depends on Porgera, Wafi, Papua LNG Recovery depends on Porgera, Wafi, Papua LNG Recovery depends on Porgera, Wafi, Papua LNG Recovery depends on Porgera, Wafi, Papua LNG

Lucas Alkan

Staff Reporter

This is the view of PNG Extractive Industries Transparency Initiative boss Lucas Alkan, who said the country was slowly recovering from the pandemic challenges.
He was commenting on a recent World Bank Report, which projected the PNG economy to grow by around 4% this year, largely driven by growth in the extractive sector.
The projection was made in the bank's Economic Update for PNG released in March, The National newspaper reports.
Its projection stems from its estimate of the economy returning to growth of 1% in 2021, after contracting by 3.5% in 2020.
"The economy is currently in fragile state, particularly when it is emerging from the aftermath of the pandemic induced disruptions that had devastating impact across all sectors of the economy," he said.
"The pandemic has created room for complacency and brought about new approaches to living and conducting business as we have been introduced to the new normal way of living and doing business in recent times."
He said the World Bank's growth forecast was dependent on several risk factors "at play relating to the extractive sector".
They include external risks such as rising fuel prices caused by the Russian-Ukraine war which "we have little or no control over".
"However, there are other risks that can be managed in the remaining months of this year," he said.
"Firstly, the Porgera mine needs to be re-opened immediately to contribute to the growth projected.
"The prolonged delay in re-opening has resulted in substantial revenue loss to the state and loss of employment and benefits to local communities.
"The shutdown of the mine is having a direct impact on the current foreign exchange shortage in constraining business operations domestically.
Alkan said "realistically, we may be looking at around October or November for the start-up. But it would be almost end of the year".
"So, for Porgera to contribute to the projected 4% economic growth seems unlikely."
He also said the "inherent political risk associated with the General Election 2022 and the formation of a new government "is likely to delay any efforts to start up new resource projects currently in the pipeline".
The other projects include the Newcrest-Harmony Wafi-Golpu copper-gold project, Panaust's Frieda River copper-gold project and Total's Papua LNG.
Alkan said there was a "real risk for the Covid-19 pandemic to surge again, disrupting economic activities in this very fragile environment".