Prime Minister Hon. James Marape has offered Papua New Guinea’s experience in mining policy and resource governance to assist the Solomon Islands develop a modern mining regime that maximises benefits for its people while remaining attractive to investors, while also welcoming an invitation from Solomon Islands Prime Minister Hon. Matthew Wale for Papua New Guinea’s mining companies to participate in developing mineral projects in the neighbouring Melanesian nation.
During bilateral discussions with Prime Minister Wale in Port Moresby today, Prime Minister Marape said Papua New Guinea had learnt valuable lessons over decades of resource development—both successes and mistakes—and was ready to share those experiences with its Melanesian neighbour.
“As you develop your mining laws, it is important to get them right from the beginning,” Prime Minister Marape said.
“Papua New Guinea is still refining its own resource laws, but we have accumulated decades of experience. We are prepared to send our resource lawyers and technical experts to work with your team so that together we can develop policies that deliver long-term benefits for our people.”
Prime Minister Marape said both Papua New Guinea and the Solomon Islands sit on the Pacific Ring of Fire, one of the world’s richest mineral belts, giving both countries enormous potential to build prosperous economies from their natural resources.
“Our countries are blessed with extraordinary mineral wealth. The challenge is ensuring that the people who own these resources receive a fair share of the wealth created from them.”
Prime Minister Marape said Papua New Guinea’s resource policy seeks to ensure the State receives at least 55 per cent of the total economic benefits generated from major mining projects through an appropriate combination of corporate tax, equity participation, royalties, levies and other fiscal arrangements.
“Our objective is simple. Investors must make a reasonable return because they bring capital, technology and expertise. At the same time, the country that owns the resources must also receive a fair and equitable share of the benefits.”
Prime Minister Marape stressed that equity participation is fundamentally different from taxation.
“Tax is simply what every company pays for doing business in our country. Equity represents ownership. When the State and landowners hold equity, they sit at the decision-making table and participate directly in the long-term value created by the project.”
Drawing on Papua New Guinea’s own experience, Prime Minister Marape said the country’s resource reforms had been shaped by difficult historical lessons, particularly the Panguna Mine in Bougainville.
He noted that before Independence, Papua New Guinea had virtually no equity participation in Panguna, while customary landowners received little direct ownership despite the mine operating on their ancestral land.
“The Bougainville crisis remains a lasting reminder of what can happen when resource development is not perceived as fair by the people who own the land.
“Our biggest lesson is this: if you do not get the relationship with customary landowners right, the project will ultimately fail. Landowners must be central to any resource development policy.”
Prime Minister Marape said Papua New Guinea’s customary land ownership system made it essential for resource laws to recognise that minerals are located on land owned by citizens rather than the State.
“In Papua New Guinea and the Solomon Islands, resources are found on customary land owned by our people. That reality must be reflected in legislation and benefit-sharing arrangements.”
He said successive governments had inherited resource agreements negotiated under colonial and early post-Independence arrangements that often provided limited ownership for the State and customary landowners.
“We carry the burden of history. Many of our older mining agreements reflected another era, and today we continue working to secure fairer outcomes for Papua New Guinea.”
Prime Minister Marape cited the reopening of the Porgera Gold Mine as an example of the Government’s determination to negotiate a better outcome for the country.
“Through negotiations, Papua New Guinea interests now hold 51 per cent of the Porgera project. That outcome was achieved through negotiation rather than because it was prescribed in law.”
Prime Minister Marape said Prime Minister Wale had acknowledged Papua New Guinea’s leadership in pursuing greater national ownership and fairer returns from major resource projects and expressed his intention to pursue a similar approach in Solomon Islands.
“I commend Prime Minister Wale for embracing a vision that ensures the people of Solomon Islands receive a greater share of the wealth generated from their own natural resources,” Prime Minister Marape said.
“He has invited Papua New Guinea mining companies to partner in the development of mining projects in Solomon Islands under a benefit-sharing model where Solomon Islands interests would retain 51 per cent equity while the investor holds 49 per cent, similar to the approach we negotiated at Porgera.”
Prime Minister Marape welcomed the invitation, saying it demonstrated Papua New Guinea’s emergence as a respected mining nation with decades of operational experience and technical expertise.
“I thank Prime Minister Wale for his confidence in Papua New Guinea’s mining industry,” he said.
“I have tasked Kumul Minerals Holdings Limited and Ok Tedi Mining Limited to examine opportunities in Solomon Islands and engage with their counterparts on potential mining partnerships.”
Prime Minister Marape also revealed that Papua New Guinea has received a similar invitation from France following his recent state visit.
“French President Emmanuel Macron invited Papua New Guinea to explore opportunities to partner in nickel mining developments in New Caledonia,” he said. “I have also tasked Ok Tedi Mining Limited to examine opportunities to work alongside mining operators in New Caledonia’s nickel industry.”
Prime Minister Marape said Papua New Guinea is now entering a new era where its mining companies are expanding beyond national borders.
“For decades, international companies came to Papua New Guinea to develop our mineral resources. Today, Papua New Guinea has the experience, expertise and confidence to participate in mining developments across our region. It is encouraging that fellow Pacific Island countries now look to Papua New Guinea as a trusted mining partner. This reflects our growing economic maturity and regional leadership.”
Prime Minister Marape also highlighted the importance of strong local content policies, saying one of the greatest economic opportunities lies in ensuring mining projects support domestic businesses, employment and downstream industries.
“A successful mining industry is not measured only by taxes and royalties. It is also measured by how much business activity, employment, procurement and value creation remain within the country. Mining operations spend millions of dollars every month on goods and services. The more local businesses that supply those goods and services, the more wealth remains circulating in the national economy.”
He encouraged the Solomon Islands to establish strong local content provisions before major mining projects commence.
“The Solomon Islands is still at the greenfield stage. This gives you the opportunity to establish the right policy settings before major developments begin.”
Prime Minister Marape also cautioned against creating fiscal regimes that discourage investment.
“Resource investors are not charities. They invest where projects remain commercially viable.
“You cannot expect investors to pay premium taxes while also surrendering excessive equity. Governments must strike the right balance so investors continue to achieve internationally competitive returns while resource-owning countries receive a substantially greater share of the overall benefits.”
Prime Minister Marape said Papua New Guinea remains committed to sharing its expertise with fellow Melanesian countries while building commercial partnerships that ensure future generations benefit more fully from their natural wealth.
“Our experience has taught us many valuable lessons. If those lessons can help the Solomon Islands avoid the mistakes we made and build a stronger resource economy from the beginning, while at the same time creating opportunities for Papua New Guinea companies to invest across the Pacific, then our partnership will benefit both our nations.”