PACIFIC ISLANDS REPORT

Pacific Islands Development Program/East-West Center
With Support From Center for Pacific Islands Studies/University of Hawai‘i

By Gideon Jack

PORT MORESBY, PNG (The National, Aug. 11)—The Government, a Chinese resource developer and its joint venture partners yesterday signed two documents paving the way for the development of the Ramu nickel project in Morobe province by the end of this year.

China’s Metallurgical Construction Corp signed the agreement with State, joint venture partners Highlands Pacific Ltd, Mineral Resources Madang Ltd and the Mineral Resources Development Corp.

The deal grants MCC a 10-year tax holiday as incentive to kick-start the project.

It also gives the join venture import duty and excise tax exemptions on its various imports.

The project is expected to generate at least 5,000 jobs during the two-year construction phase.

Mining Minister Sam Akoitai, who witnessed the signing, said the deal had given MCC and the joint venture partners the right to develop and mine the nickel deposits.

"This event marks an important occasion in the history of the country as the Government has had many lengthy discussions with stakeholders in the Ramu nickel project," Mr Akoitai said.

He said this resulted in the signing of the deal yesterday giving the green light for MCC to begin with the construction stage by the end of this year.

The nickel mine is expected to start production by 2009.

Mr Akoitai also said more than 5,000 jobs would be created during the two-year construction period.

Luo Shu, MCC managing director, said the company was now in the final stage of the feasibility study and is financing all projects at a cost of US$700 million (K2.2 billion).

Ms Luo said the project would increase the State’s revenue and improve the structure of the country by creating more jobs and supporting the Government’s medium-term development strategy.

Meanwhile, MRDC managing director Francis Kaupa said the agreement signing was "a light at the end of the tunnel" for the state-owned entity as it had taken a bold step in 2002 to acquire K12 million worth of shares for the Ramu nickel project from Oil Search Ltd which preferred to concentrate its business on oil and gas.

He said he was positive about the project and would support it.

Governor-General Sir Paulias Matane signed two documents yesterday to officially kick start the Ramu nickel project by the end of this year.

the other document signed was the variation to condition three of the special mining lease (SML) for the Ramu project. He said the variation agreement confirms the joint venture’s right to develop and mine the Ramu nickel project. He said this grants the project and the joint venture participants a number of generous incentives in support of the development including a 10 years taxation holiday and various import duty and excise exemptions.

More than 5,000 jobs will be created with the signing of the Ramu nickel project at the government house yesterday with 10 years tax exemption granted as an incentive to begin the project.

The Governor General Grand Chief Sir Paulus Matane signed two documents yesterday to officially kick start the Ramu nickel project by the end of this year. The first document signed was the amending agreement to the Ramu mining development contact. This agreement is signed by the State with China’s Metallurgical Construction Corporation (MCC), Highlands Pacific ltd, Mineral resources development corporation (MRDC) and Mineral resources Madang ltd.

The amending agreement contains the terms and conditions governing the development of the Ramu nickel project to assist the developers to construct and develop the project.

Mining minister Sam Akoitai said that the other document signed was the variation to condition three of the special mining lease (SML) for the Ramu project. He said the variation agreement confirms the joint venture’s right to develop and mine the Ramu nickel project. He said this grants the project and the joint venture participants a number of generous incentives in support of the development including a 10 years taxation holiday and various import duty and excise exemptions.

Mr Akoitai said the original condition three of the SML obliged the lessee to begin construction or secure financing within 36 months from the grant date which was the 26th of July 2000. Mr Akoitai said this condition was first varied in July 2003 for a further 36 months and the signing yesterday extends that condition for another 3 years.

"This event marks an important occasion in the history of the country as the government has had many lengthy discussions with stakeholders of the Ramu nickel project," Mr Akoitai said. He said this resulted in the signing of the agreement today with MCC as the potential developer for the mine to begin with the construction stage at the end of this year up until 2009 when the mine will officially be in the capacity to produce.

Mr Akoitai also said that more than five thousand jobs will be created for people to be employed during the construction period for two years. The Manging director of MCC Ms Luo Shu also said that the company was in the final stage of the feasibility study and it is funding all projects at a cost of US $700 million (K22 billion). Ms Luo said that the project will increase the state revenue and improve the structure of the country by creating more jobs and supporting the medium term development strategy.

Meanwhile, the MRDC managing director Francis Kaupa said that the signing of the agreement today is a light at the end of the tunnel for the state owned entity as it has took a bold step in 2002 to purchase a K12 million worth of shares for the Ramu nickel project from Oil Search ltd who preferred concentrating production on oil and gas. He said he was positive about the project and would ensure on his part to support it.

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