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26 March 2011

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I recall a mining warden’s meeting where the landowners expressed concerns that the geologists were taking gold out of the ground and making a big profit by selling it abroad. The meeting was told by a company rep. that these lumps of rock were merely samples and were not sold.

Further the miner tried to simply explain how it would take years of exploration and massive investment by the company to see if there was a viable project before the company was able to actually start producing gold etc.

He told how the company would have to fund all this investigation and analysis without ever making one kina profit.

The villagers were apparently satisfied, but I know that the answer had not entirely removed the doubt in their minds that once again the bigman ethos, with which they had grown up as a norm in their clan systems, was shafting them.

I wonder how a Wafi villager would feel if he had access to Creamer’s Mining Weekly or any other mining magazine and read how the exploration company he knew in his bit of jungle had made a possible $2 billion gain on his village’s dirt resource without producing one ounce of gold.

How would you explain Harmony’s huge leap in value if you were advising the local people on whether to allow more prospecting or any other work on their apparently rich blocks. Olsem wanem nau long mipela?

Elsewhere in Attitude we read of a post about the state of capitalism in our 21st Century world and during the week an involved landowner in the Ramu area was asking why there were no seed capital, gifts, grants etc just as the landowners received for the LNG project.

What was different, they asked, about their Ramu project. I thought that was good question to ask.

I believe that some way should be sought in resource rich PNG (and that includes timber, fish, palm oil and other crops) to involve the landowners from day one of any project.

It would make it more expensive for the exploiters and explorers to operate and certainly would need better planning and administration of the process than we have seen in the LNG debacle.

It would even mean the government doing adequate landowner profiles before the projects began - but would that be a bad thing?

A new developer would have to set up a company and local villagers would be allocated shares in it. They would need to be told of the timescale of the preparation and exploration needed to validify the economic chances of success.

This would give a citizen the feeling of being a part of the process of developing their land from day one. It would be ‘their company’. They would have a reason to support the work and to protect their company from outside interference.

It would go some way towards keeping the spivs, politicians, public servants and others in Port Moresby at bay.

Everyone would want to see the company go from investigation to development planning and production. Surely a winner for the community, the province and the nation?

I can see that this method rebalances the ownership quandary, which the nation is facing with moves to alter the constitution to give the mineral rights back to the landowners.

In a way it could negate the necessity for that legal change if the landowners were empowered to be shareholders in every resource based project in their area from day one.

However landowners would have to understand that merely exploring does not mean a project would eventually emerge and that their shares could be mere paper.

But in the event that a mineral was found in presently uneconomic volume those shares would reap rewards if as is happening today when commodity prices are surging and making the once Too Expensive resource now commercially viable.

It would also mean that companies finding minerals but deliberately delaying exploitation of a ore body for company future development would still have its local shareholders waiting in the wings just as its shareholders do.

I consider how different it would have been if Rimbunan Hijau had been forced to issue shares to every landowner living among the millions of acres of forest they had logged.

Or CDC’s original Poliamba oil palm, Higaturu etc etc had done the same.

Life may have been better for the rural people who sometimes have seen their area logged over two, three or even four times with very little economic development remaining.

What if Misima, Porgera, Lihir and all mining areas had done so too?

Since the recent economic recession the ‘Where now for Capitalism’ is being raised worldwide and perhaps in PNG it can charter a new road of grass roots involvement in every resource development.

Arthur (goch) Williams
Lavongai & Cardiff

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