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Here comes a gold-backed currency? PNG aims to retain 30% of exported gold, may change currency pegs

ZZZZZ

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PNG aims to retain 30% of exported gold, may change currency pegs

Jonathan Barrett

SYDNEY, Aug 19 (Reuters) - Papua New Guinea wants to retain at least 30% of the gold it currently exports as it transforms its economy under a new government leadership, the country’s commerce minister said on Monday.

PNG was the world’s 14th largest gold producer in 2018, according to the World Gold Council. Its assets include the Porgera gold mine, majority controlled by a joint venture between Barrick Gold Corp and Zijin Mining Group , which has a lease currently up for renewal.

PNG’s Minister for Commerce and Industry Wera Mori told an investor forum in Sydney that the resources-rich nation was developing policies to keep more of the commodities it produces in the country to improve its economy.

“We are in the process of developing the framework to retain at least 30% of our gold that we export every year,” Mori told an investment forum in Sydney.

Mori said that PNG would also consider pegging its currency, the kina, to gold, rather than the U.S. dollar.

PNG’s central bank currently fixes its currency to a narrow U.S. dollar band, propping up the kina’s value while creating a shortage of dollars available in the Pacific nation.

James Marape, the former finance minister who became PNG’s new leader in May after winning a vote in parliament, has put some of the world’s biggest resources companies on notice over a perceived lack of wealth flowing from their projects back to communities.

This includes sending a team to renegotiate its Papua LNG agreement with French oil major Total SA.

https://af.reuters.com/article/commoditiesNews/idAFL4N25F074
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Zed

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I doubt that they can afford to do that... there is a only three men and a pig working in PNG currently. :D

The TOTAL GDP = 1.6 Moz and they are talking about retaining 696,600 a year!

They ain't collecting enough tax to do that so they must be planning on stealing it!