Prime Minister Hon. James Marape has directed the Treasury Department and the Internal Revenue Commission (IRC) to undertake a comprehensive review of all mining agreements in Papua New Guinea, following record global increases in gold, silver and copper prices.
The Prime Minister said the surge in commodity prices presents an opportunity for the nation to secure fair and equitable returns from the extraction of its natural resources.
“With global gold, silver and copper prices reaching historic highs, mining operations in Papua New Guinea — whether large-scale or alluvial — are now generating extraordinary profits,” Prime Minister Marape said.
“Most production costs remain relatively fixed, apart from inflation. When commodity prices rise sharply, the country must also benefit through appropriate tax returns and dividends.”
Comprehensive Review of Mining Agreements Ordered
Prime Minister Marape confirmed that Treasury and the IRC have been instructed to:
• Compile individual files on every operating mine, including:
• State-owned mining entities such as Ok Tedi Mining Limited;
• Joint-venture operations including Porgera;
• Medium and small-scale mining licence holders.
• Conduct accuracy and compliance testing on all production and revenue declarations.
• Undertake joint reviews of project agreements with mining operators.
• Ensure transparency in royalty, tax, dividend and equity returns to the State.
“I have asked Treasury and the IRC to conduct accurate testing on all company declarations and to work collaboratively with operators to ensure compliance,” the Prime Minister said.
“Many of these companies have operated in Papua New Guinea for decades and are corporate citizens of our country. Goodwill, honesty and fairness are expected — especially when global commodity prices deliver windfall profits.”
Additional Profit Tax Consideration
The Prime Minister said the Government is examining the application of additional profit taxation mechanisms where appropriate.
“We are not increasing taxes. We are simply ensuring that when extraordinary profits are made from our resources, the State receives its fair share,” he said.
Strengthened Control of Alluvial Gold
Prime Minister Marape also raised serious concerns over illegal export of undeclared gold.
“We have received credible reports of individuals attempting to leave the country with undeclared gold concealed in luggage. This is illegal and will attract the highest penalties under the law.”
He emphasised that legitimate alluvial miners will not be penalised.
“Those genuinely operating within the law have nothing to fear. However, undeclared gold must not leave Papua New Guinea.”
Gold Refinery System Under Consideration
To improve accountability, the Government is exploring the establishment of a national gold refinery system, which would ensure:
• All gold — including alluvial production — is properly declared;
• National production volumes are accurately recorded;
• Value is added domestically;
• State revenue is protected.
“A refinery system will allow us to take full stock of our gold production and ensure proper accounting through a regulated national process,” the Prime Minister said.
Reset Agenda: Accounting for All National Resources
Prime Minister Marape said the mining review forms part of the Government’s broader Reset Agenda, aimed at ensuring all national resources are fully accounted for.
“This approach will also extend to fisheries, forestry and agriculture — so every resource harvested in Papua New Guinea is properly recorded and the State receives its rightful return.”
Long-Term Commitment to Lower Taxes
The Prime Minister reiterated his commitment to reducing taxes once economic growth targets are achieved.
“When our economy surpasses K200 billion, we will look seriously at reducing corporate tax and personal income tax.”
“We have already demonstrated our ability to support businesses during difficult economic periods. If we broaden the tax base and grow the economy together, tax reductions will follow.”