Dept working on mine closure policy
Copyright 2000 The National (PNG)
December 12, 2000
ONE of the most important roles of the Mining Department is the development of policy to guide and promote the mining industry.
Mining Minister Michael Laimo said over the last year his Department has been involved in the development of a mine closure policy to ensure that all aspects relating to the management of infrastructure and rehabilitation are properly addressed in future mine closures.
Mr Laimo said this policy has also been addressing issues relating to the social impact of mine closure and the taxation treatment of mine closure costs.
He said with the assistance of the World Bank, the department is also beginning work on a sustainable development policy for the mining sector which will be aimed at ensuring that all mining developments result in positive social and economic outcomes for the affected communities.
The fiscal regime under which the mining industry has developed in PNG was established over 20 years ago for the Ok Tedi Mine, Mr Laimo said.
"For a long time this regime was stable and consistent," he said.
He said under the previous government a number of taxation increases took place between 1996 and 1998, breaking this good record of stability.
Mr Laimo said this caused several investors to leave PNG, taking their exploration funds elsewhere.
"This has contributed to our low levels of exploration and made PNG less competitive," he said.
He said a review of the mining and petroleum taxation act has resulted in the company tax rates for mining being lowered from 35 per cent and to 30 per cent, dividend withholding tax from 17 per cent to 10 per cent, and the combined effect of these two changes is to lower the headline tax rate from 46 per cent down to 37 per cent.
Mr Laimo said another change that will be welcomed by the industry is the commitment by Government to phase out the mining levy.
This will reduce the operating costs of mines by reducing the costs of inputs into the mine, he said.