CONSTRUCTION of the Panguna mine is estimated to cost US$4-6 billion (K12.5- K18.8 billion).
Bougainville Copper Ltd (BCL) secretary Mark Hitchcock said significant tax revenue would be generated in the estimated 25-plus years’ mine life, with operations starting around 2025-26.
Hitchcock spoke during the Autonomous Bougainville Government’s (ABG) three-day tax and revenue summit in Buka last week aimed at finding ways to improve the financial outlook for the region and the government’s ability to fund services for its people.
Hitchcock was invited to present development of a new Panguna mining project, including its potential revenue and broader economic benefits.
Once developed, the mine would generate significant tax revenue over the 25-plus years operational life of the project.
The presentation was drawn from an order of magnitude study which was updated late last year.
A realistic timeline for the Panguna project will see the mine operational around 2025-26, Hitchcock said, and the potential tax revenue gains had to be viewed as a longer term prospect with no short-term, direct tax generation, although the project’s development and construction period would present income generation opportunities.
Hitchcock highlighted the need for certainty in relation to the tax regime that would apply to the project and warned that excessive tax imposts would undermine its viability. “One potential pathway is for the ABG and PNG national government to work towards a joint agreement to provide assurances regarding applicable taxes that would apply over the longterm,” Hitchcock said.
In addition to tax revenue, he said the Panguna project would have a wider multiplier effect in terms of economic benefit.
“A project of this scale will help stimulate the economy in a multitude of ways in areas such as training and employment, new business opportunities in the supply of goods and services and the provision of new infrastructure to name a few,” he said.
Hitchcock congratulated the ABG for holding the tax and revenue summit and said BCL welcomed opportunities to contribute to important policy discussions in Bougainville.