Press Release: BCL contributes to landmark tax summit
Bougainville Copper Limited (BCL) was pleased to participate in the Autonomous Bougainville Government’s (ABG) landmark Tax and Revenue Summit last week in Buka.
The ABG held the three-day summit to investigate ways to improve the financial outlook for the region and the government’s ability to fund services for the people of Bougainville into the future. BCL Company Secretary Mark Hitchcock was invited to present to the summit on the development of a new Panguna mining project, including its potential revenue streams and broader economic benefits.
After demonstrating project viability and conducting a bankable feasibility study, the project’s construction phase would cost an estimated US$4-6 billion. Once developed, the mine would generate significant tax revenue over the 25+ year operational life of the project. The presentation drew from a previously released Order of Magnitude Study which was updated in late 2016.
Were the Panguna project to proceed through to development, a realistic timeline would see the mine operational around 2025-26 and accordingly, Mr Hitchcock said 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.
He also highlighted the need for certainty in relation to the tax regime that would apply to the Panguna 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 long-term,” Mr 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.”
Mr Hitchcock congratulated the ABG for holding the Tax and Revenue Summit and said BCL welcomed opportunities to contribute to important policy discussions in Bougainville.
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