MRDC - Mineral Resources Development Company: Trustee of the People's Resources of Papua New Guinea

Friday 5th November 2010: Port Moresby, NCD

SPEECH BY MINISTER FOR FINANCE AND TREASURY AND PUBLIC SERVICE AND IALIBU –PANGIA MP HON. PETER O’NEIL ON THE OCCASION TO MARK THE OFFICIAL LAUNCH OF THE NEW-LOOK WEBSITE FOR MINERAL RESOURCES DEVELOPMENT COMPANY LTD

MRDC Chairman Mr Simon Tosali, MRDC Managing Director Mr Augustine Mano, Honorable Ministers, Members of Parliament, Ladies and Gentlemen, It gives me great pleasure to be the guest of honour tonight to officially launch the robust new-look website for MRDC, one of the State-owned companies. MRDC served successive Governments and over the years has set an impeccable record in the mining and petroleum industry. A company often mandated by the State in securing the State’s interests in the Resources Development.

Over the years, MRDC has become the incubator, successfully facilitating the Government’s initiative in the creation and that had delivery Orogen Minerals Limited, and led to the Orogen’s successful floating on the Australian and Port Moresby Stock Exchanges. Orogen was a successful company until the Government decided that it merged with Oil Search Ltd making the State the second major shareholder in Oil Search. MRDC in the recent past has facilitated the birth of Petromin Holdings (PNG) Limited. Prior to the establishment of Petromin, MRDC used to manage Eda Oil Limited, which held the State’s interest in the Moran Petroleum Project. The transfer of Eda Oil to Petromin created a new chapter for Petromin and PNG as a new nationally owned company which was created to actively participate in the mining, petroleum and gas business in the country and actively doing that now.

MRDC recently successfully established Mineral Resources Lihir Ltd, a landowner company in the Lihir gold mine area. MRL was a company that moved from a negative cash flow to now becoming the first landowner company to be on its own feet. They took up a transition to be on their own and the Government would like to see upon this as a benchmark where landowners can be able to manage their own companies.

The role of MRDC has leapt to active participation with landowner companies Petroleum Resources Kutubu Ltd, Petroleum Resources Gobe Ltd and Petroleum Resources Moran Ltd to set a new trend to make landowners move away from being collectors of royalty and equity and become active participants in the PNG LNG Project as well as other businesses in the oil and gas sectors.

A recent example is the acquisition of Hevilift Limited, a renowned aviation company by the landowner companies. This strategic acquisition will enable landowners, through their companies to participate in the aviation business in the existing mining and petroleum project areas and other parts of the country where there will be business opportunities.

This is something PNG landowners should be proud of - becoming partners in billion kina projects alongside some of the big names in the industries. The Government is happy to note that MRDC has engaged effectively with the landowners to deliver the PNG LNG project commitments during the UBSA (Umbrella Benefits Sharing Agreement) in Kokopo and the LBSA (Licence Based Benefits Sharing Agreements) in respective licence areas – demonstrating the support of my Government to deliver the LNG Project so that the country’s economy is secured for the next decade. MRDC has experience in dealing with major commercial banks and financial institutions – both overseas and locally. The company has managed State’s loans with the European Union Bank with the most recent one being the loan to develop the Ramu Nickel/Cobalt Project. With its role to manage landowner interests in the mining and petroleum projects, the upgraded website carries information that is user friendly and easy to understand. Information on different landowner companies including their annual reports will now be easily accessible when they are uploaded onto the website.

MRDC has come a long way since it was established by the Government to manage the State’s and landowners’ equity interests in the mining and petroleum projects and as the sole custodian of the company on behalf of the State, I am proud to say that MRDC had delivered on its tasks. Over the years, MRDC has evolved at the same time taking on the changes and the challenges that our young nation had to endure. Despite these challenges, the company has grown to become one of the premier State-Owned Enterprises in the country. As a Government, we are proud that MRDC is also demonstrating that it has taken the landowner benefits management issue to a different level to ensure landowners will no longer be royalty and equity collectors but enter into business ventures that will see their benefits increase.

Ladies and Gentlemen, The National Executive Council recently approved the transfer of the functions of managing, accounting and implementation of the MOA projects to MRDC. This decision effectively gave MRDC statutory powers and rights to play a greater role in the efficient and prudent management and implementation of the projects funded under the MOA commitments and also through other sources or arrangements. The powers to implement projects identified to be funded under MOA in the oil and gas project areas were previously with the Department of Petroleum and Energy. Apart from being a trustee of landowners’ wealth in the mining and petroleum project areas, the transfer of MOA funds to MRDC is an additional responsibility but with the capability and experience in managing the Community Infrastructure Trust Fund, this new role will not be difficult as it seems.

MRDC has proven beyond doubt that it is the right vehicle to manage landowner interests in the mining and petroleum project areas and the same high level of management, transparency and accountable will be applied to the management of the MOA funds. Under its new role, MRDC will work with State departments including National Planning and Rural Development, Finance and Treasury, Petroleum and Energy, Local Level Government and Attorney General in its endeavours to deliver MOA funded projects and other projects pursuant to Section 178 of the Oil and Gas Act are delivered without delay and with high level of transparency and accountability in compliance with Central Supply and Tenders Board Act and the Public Finance Management Act.

The NEC also approved the inclusion of MRDC Managing Director to be on the Expenditure Implementation Committee (EIC), a committee that screens and approves MOA projects to be funded. Ladies and gentlemen, MRDC just like any other State owned entity, should be proud of its history and this story has to be told to enhance investment and growth in the mining and petroleum business. MRDC has done its part in the development of PNG, giving confidence to the financiers and investors to invest in the mining and petroleum industries in the country.

The World Wide Web is playing an important role in the way information is communicated to the masses and at MRDC understands the importance of keeping its beneficiaries and stakeholders informed of what they are doing. The website will also enhance information dissemination to the investors who will feel secured when they are spending their millions and billions of kina in our country and they know that their investments are safe. This can be done by enhancing the MRDC Vision:

“Enhancing reasonable returns on our investments and improving the quality of life for our beneficiaries” With the technology available such as the VSAT, the MRDC website can also be accessed in the villages. I now officially launch the new look MRDC website. Please feel free to access the website and acquaint yourself to the information it contains.