Page 30 - IB MAR 2019

Business Intelligence - PNG

Naulitus gets a lifeline

SEABED miner Nautilus Minerals has been granted a lifeline,
a 28-day protection order against its creditors while it restruc-
tures.
Nautilus was granted the first mining lease for seabed mineral
deposits at a prospect known as Solwara 1, in the territorial
waters of Papua New Guinea, where it planned to mine copper,
gold and silver. The PNG government has a 15 per cent stake
in its PNG subsidiary.
Nautilus says it has received a loan from Deep Sea Mining
Finance of $750,000 and an advance of $US4 million to fund
ongoing operations and restructuring. To date, the company
has received loans from Deep Sea Mining Finance totalling
US$18.25 million. The loans bear interest at eight per cent per
annum, payable bi-annually in arrears, and until the stay, had
a maturity date of March 8, 2019.
In a statement, Nautilus says: “The Company is evaluating a
range of alternatives to recapitalise Nautilus so that the reality
of its seafloor mining projects can be achieved. The options
could include the sale of Nautilus’ polymetallic nodule business
unit and its seafloor massive sulfide business unit. Nautilus
is not bankrupt and remains in possession and control of its Solomon Islands, Tonga and Fiji.
business.” The project is controversial, and has faced opposition from
The Solwara Seabed Massive Sulphide deposit contains a New Ireland civil and community groups. Those groups now
copper grade of seven per cent, and gold grades of over 20 want Nautilus’ mining licenses cancelled. They took the matter
grams per tonne. Nautilus had earlier expressed its desire to to court, asking for disclosure of the mining licenses, but are
expand its operations to other parts of Papua New Guinea, the still awaiting judgement.

Bougainville takes control of Chinese company and economic activity,” Fleming said.
THE Autonomous Bougainville Government has taken control Fleming says the bank’s house loan portfolio is also perform-
of the Bougainville Import Export General Corporation (BIEGL/ ing well.
Solomal).
The Post Courier reports the departure of Chinese interests Air Niugini’s 2018 losses
from the company has prompted the ABG to intervene swiftly to AIR Niugini’s Managing Director, Alan Milne says 2018 was a
protect assets and other resources of the company. tough year for the airline, with a K54.6 million (US$16.19 mil-
BIEGL was one of several companies set up between 2010 lion) loss recorded.
and 2013 as joint ventures between Chinese businesspeople and Milne says the airline was hit by the September 2018 crash
Bougainvilleans. in Chuck, an aircraft burning in Mendi and several loss making
Interim manager Mark Herry told the newspaper: “Many people routes.
will point out that this is a disaster, but with further analysis we In response, the airline has launched the “higher altitudes”
find that we actually have been left with a business with more program which aims to control costs, enhance revenue, develop
than K1 million in stocks and several millions in assets and a staff and improve operational and customer service. “The ‘higher
chance to start again. altitudes’ transformation programme has already delivered a K20
“Using online banking, the Chinese took all the cash out and million cost-saving in the last three months,” Milne said.
left nothing, so it will be quite a headache to start, but the new
and very experienced project team will get it back on track.” PNG, Fiji sign post-Brexit deal
THE United Kingdom has signed a post-Brexit trade deal with
Strong loan book growth for BSP Papua New Guinea, which will ensure continued access to fish
BANK South Pacific says its loan book grew by K1.321billion according to the UK’s international trade secretary Liam Fox.
(US$391 million) in 2018. A similar deal was signed with Fiji, which will ensure sugar
Chief executive officer Robin Fleming says this increase related supply to the UK.
mainly to Papua New Guinea’s increased lending in the bank’s The deal eliminates all tariffs on goods imported from PNG and
retail, corporate, SME and housing loans. Fiji. Around 80 per cent of tariffs on UK exports to the countries
And he has told the Post Courier that he expects this trend to will also be gradually removed.
continue this year. UK minister are rushing to sign deals with some 70 countries as
“I really think that the first half retail’s going to be leading the Brexit deadline looms, although no deal has yet been agreed
most of our growth and then come the second half of the year to define how the exit will proceed.
come with some announcements of the LNG [Liquified Natural Fox said: “I am delighted to sign this trade continuity agree-
Gas] which we will see some of the corporate activities starting ment today as it will allow businesses to keep trading as freely
to pick up again with some confidence in the economic growth as they do today, even in a no-deal scenario.”

30 Islands Business, March 2019