less risk for mining investors

http://www.thenational.com.pg/090507/business3.htm

Less risk for mining investors

Mining investment in Papua New Guinea carries less risk than it did a year ago, the recent World Risk Survey 2007 in Resource Stocks reported.
The survey of senior mining company executives gave PNG an overall risk-weighted score of 17.4, a solid improvement from last year’s 19.4 and from the 2005 and 2004 scores of 22.4 in both years.
It also climbed up two positions on the ranking ladder to 29th position this year, putting it ahead of Indonesia.
The survey, based on responses to a detailed questionnaire, measures 10 categories of risk – sovereign (loss of title to an asset), land access, green tape, red tape, social risk, infrastructure, civil unrest, natural disasters and labour unrest.
Each category is ranked on a scale of 0-5, with 0 equalling no risk, and 5 equalling maximum risk.
The survey also showed improvements in the social risk and labour relations categories, with the former improving from 4 to 3, while the latter went from 3 to 2.
The results coincide with the country’s improvements in gross domestic product (GDP) growth and debt reduction.
The Asian Development Bank said PNG’s GDP grew by 3.7% last year from 3.3% in 2005 while its external debt fell from 25.2% of its gross national income in 2005 to 21.4% in 2006.
The Government has also reported increases to its budget on the back of higher mineral and petroleum taxes and dividends stemming from higher than anticipated prices from its major exports.
Miners have also backed up the survey results with their pockets. More foreign investment was expected to flow into projects in the mining sector in the next five years than it had over the past three decades.
These include the US$820 million (K2.5 billion) Ramu nickel project that is expected to come onstream in late 2009, Nautilus Mineral’s Solwara deep-sea base and precious metals operation and the Yandera copper-molybdenum project.