Development

Business and

Changes on way for New Guinea tariff policy

Papua-New Guinea’s tariff

policy is currently being reshaped

to further encourage secondary industry in the territory. Re cently, the Australian Minister for External Territories, Mr. C.

E. Bames, hinted that the policy was being reviewed and many NG businessmen see this as a definite sign that changes are on the way for the territory’s 1965 Pioneer Industries Ordinance.

Some Australian exporters to NG take a different view and feel Mr. Barnes was talking about in creasing revenues in NG by raising existing tariffs and so increasing the territory’s indirect taxation system.

Speaking at the April 19 opening of NG’s tallest building, 12-storey ANG House, in Port Moresby, Mr.

Barnes said that taxation, land acquisition for industrial purposes and tariffs must be “shaped” to stimulate the setting-up and expan sion of industries.

“For instance, a reshaping of tariff policy and the development of more effective tariff machinery is important for the growth of second ary industry,” he said.

Mr. Barnes didn’t mention the Pioneer Industries Ordinance in his prepared text.

The ordinance provides for a “tax holiday” of five years for any manufacturer setting up a new secondary industry in NG. Share holders’ dividends from the new in dustry are tax-free for the same period.

In its first 18 months of opera tion, eight pioneer certificates were issued to producers of a range of products in which the total capital Investment was about $H million.

Businessmen feel that the Adminis trator’s Council, which decides if an industry is eligible for the concession, may be given wider powers to allo cate applications in a freer and quicker manner.

Earlier in his speech, Mr. Barnes had referred to three gaps in the

territory’s economy—a revenue gap, an import gap and an investment gap.

He said of NG’s 1967-68 budget of about $l4O million, only about 40 per cent., or $63 million, came from locally-raised revenue including loan funds.

Mr. Barnes said that over the past 12 months NG’s export earnings were only sufficient to pay for about 40 per cent of the cost of imports.

When development projects matured, in a few years, this trade gap would be narrowed.

Dealing with the investment gap, Mr. Barnes said private enterprise was needed. Efforts to attract over seas funds would be intensified.

A comment in Mr. Barnes’ speech that the P-NG Development Bank has lent “more than half a million dollars” was puzzling in the light of a release in his own department’s P-NG Newsletter nearly a month earlier that the bank had loaned $2,439,439. Who can’t count?

Placer encouraged

by NG copper

Initial work by Placer Develop ment Limited in New Guinea has yielded “encouraging” copper anom alies, directors reveal in the com pany’s 1967 report to shareholders.

The Canadian-based NG gold miner, timber-supplier, shipper and beef-cattle producer, has about 2,000square miles of prospecting leases in the NG Islands and the NG main land.

Regions where the copper anom alies have been located, by stream testing, are south New Ireland, three spots in central New Britain and the loma area of north Papua.

The company is currently con centrating on the loma anomalies, re portedly similar to anomalies Cultus Pacific NL has located on Misima Island.

Placer will soon extend its prospect ing operations into Fiji, following the granting in April by the Fiji Govern ment of a 238-square mile prospect ing area near Wainimala village, north of Suva, on Viti Levu.

Directors reported that operations of the two Placer timber companies —South Pacific Timbers, of Lae, and Commonwealth-New Guinea Timbers

Limited (a 49.9 per cent, interest increased during 1967.

Plywood and veneer demands ir creased and Placer received $C270,000 dividend from Commor wealth-New Guinea Timbers.

Placer’s cattle herd on the Lero Plains, in the Morobe District, furthe increased to 6,150 head—a suitabl carrying capacity for the grazing are —and directors said the beef produ< tion market could be met by thes cattle in the “present and immedial future”.

Esso-Oil Search

drilling soon

The first well to be drilled by ti Esso Exploration-Oil Search Lt< Papuan partnership will start in lal July or early August on Ini Islan< in Deception Bay, Gulf of Papu; Esso will have to spend about tw months piling a structure for the rig to drill on, because Ini Island sometimes submerged by very hig tides.

The selected site is a mere 13 mil< from where Phillips Australia 0 Company recorded a huge gas flo of 22.4 million cubic feet per day i 6,169 ft from its oil rig Glom Conception, in early February {PU Mar., p. 22).

Under its agreement with 0 Search, Esso can earn a 50 per cer

interest in 3,900-square miles of Oil Search’s Papuan concession areas by carrying out an exploration pro gramme and drilling four wells. This programme could cost Esso $6 million ( PIM , Aug., 1967, p. 136).

Anticipation of the announcement of the pair’s first well and the actual announcement in late April sent Oil Search 50 cent shares on Australian stock exchanges jumping from 68 cents to 85 cents.

Big turnovers were reported, and some buyers predicted that the shares would be worth over $1 when killing starts.

No clear trend in

copra market

Chairman of the P-NG Copra Vlarketing Board, Mr. lan McDonald, >ave the following report on the vorld copra market, in Port Moresby an April 22: “Since the beginning of the month, Philippine copra prices have been ’ailing steadily, and were down about £A9 per ton to SA23B at mid nonth—not a great deal percentage vise, but enough to make one vender when and where the market vill level out.

“Supply prospects are still un certain, but only in the short term, is there are indications of a settle nent of the political situation in Nigeria and seasonal conditions have improved in the Philippines. This means that additional supplies of >oth copra and palm kernels should jecome available over the next few months. ‘"However, consumers in both Europe and the US, having had to >ay high prices for lauric oils for the ast six months or so, are increasing heir endeavours to find and use sub titute oils. Although this is not easy is far as coconut oil and palm kernel )il are concerned, their efforts will 10 doubt continue. It is therefore >ossible that the present price decline vill continue, although much will de >end on the supply situation, which it the moment is not very clear.”

PIM correspondents reported price luctuations for copra in three Pacific slands territories—the Solomons, Hook Islands and Tonga—in April.

Official prices to producers in the lolomons, which have remained steady it rates up to $l2O a ton for copra ince October, 1966, despite ignificant advances during this period m Philippine copra prices, went up >y $2O a ton for each grade.

Now, Solomons copra fetches $l4O i ton first grade, $136 a ton second ;rade and $126 a ton third grade, fhe higher prices will particularly

help producers on the territory’s biggest island, Malaita, still recovering from a crop-ravaging hurricane of about 18 months ago.

Abels Ltd. of New Zeland, who buy most Cook Islands copra for process at the company’s Auckland crushing mill, announced higher rates for this territory’s copra for April, May and June.

Tonnage rates leapt SNZSO: to 5NZ218.28 for first grade, to $NZ216.19 for second grade and to $NZ214.63 for third grade. These prices are the best in the Cooks for many years and the highest single pay-out on copra for any Pacific Islands territory at present.

However, the Cooks will not be able to take full advantage of these good markets, because most major plantations are still suffering after effects from last December’s devastat ing hurricane.

In an unexpected adjustment in April the Tonga Copra Board cut STT6.2O and 5T8.20 off prices for first and second grade copra. This took prices to $136.80 and $T112.80 respectively.

This board does not base its prices on current world ruling rates for copra to the same extent as other Pacific Islands territories, and Syd ney producers suggested the board may be trying to build up revenues.

Lower plantation

profits

Two New Britain-based copra and cocoa-growing companies Makura pau Estates Ltd. and Plantation Hold ings Ltd.—have reported steady or slightly lower profits for the half-year ended December 31, 1967.

Directors of Plantation Holdings said higher costs for fertilisation in creased costs and they added that liquidity would be “temporarily affected” by fertilisation and “expen sive” development programmes.

No interim dividend was an nounced because the company usually pays a final dividend. Last year, this was eight per cent.

Directors of Makurapau Estates said the company made lower profits because of lower copra prices. No figures were given, although interim dividend was maintained at four per cent.

Prices currently being received by the Copra Marketing Board were “most satisfactory”, directors said. (NG’s prices for its three grades of copra were recently raised by $2O a ton each, to top prices of $156.)

Steamships' shares

move upwards

The early April announcement that a $3 million, 12-storey hotel and office block would be built in Champion Parade, Port Moresby, for Steamships Trading Company Ltd.

sent the company’s shares on Aus tralian stock exchanges moving firmly upwards after months of stag nation at little above par rates.

From a low of 52 cents earlier this year, Steamies 50 cent shares climbed to a year-high of 70 cents, levelling off in late April at 69 cents.

Steamies’ directors announced an “appreciable increase” in pre-tax profits for the December half-year a day before the hotel news and many shareholders at first asked: “OK, but where is the money for the hotel coming from?”

Fears that another drain on the company’s acute liquidity position was on hand were quickly quelled with the statement that finance for the hotel would come from “funds raised in Europe”.

Just who is backing Steamies more than 15,000 miles away was not disclosed. But the fact that some one was behind the company at a time when the company’s share prices could be tabbed unencouraging was good enough.

Steamies will have its hotel built on a prime position on Moresby’s foreshore, on land already owned or leased by the company in front of its main retail store.

It will include at least two floors of prestige offices, 150 beds and sev eral dining rooms.

Steamies already own one of the territory’s two international-standard hotels The Melanesian at Lae.

The other—The Gateway—is along side Port Moresby’s international air port.

Fiji copper trial

mining begins

Trial operations at the $2 million Udu copper mine at Vanua Levu, Fiji, began recently. From April to June planned production is an esti mated 446 tons of dry copper con centrate a month—with an estimated copper content of 25 per cent.

From July, this figure is expected to rise to about 770 tons a month, with an estimated copper content of 22 per cent. Nearly 100 local miners and nine Japanese staff are employed at the mine, owned by Banno Mining Company Ltd. Copper will be shipped to Japan to a leading copper smelting firm, Daiwa Mining Company Ltd.

Oysters for Fiji?

Fiji Agricultural Department officers are closely watching about 5,000 oyster seeds which have been placed in experimental bamboo rafts between Naqumu and the Fiji Industries Ltd. wharf in the Bay of Islands.

If successful, the Japan seeds could be the start of a table oyster industry in Fiji to supply, initially, the hotel trade.

Business Roundup

SINCE its inception in July last year, the Papua and New Guinea Development Bank, up to February 28 this year, has approved loans totalling $2,439,439 to 118 applicants, A typical loan was one of $3,300 to two New Guineans to set up 25 acres of tea in the Western High lands. • International Nickel Company of Canada’s role in a third consortium to exploit low-grade untapped nickel ore deposits on New Caledonia ( PIM .

Nov., 1967, p. 135) was an “initial step toward significant increases” ir the world’s supply of nickel.

Mr. Henry S. Wingate, chairmar and chief officer of the company, sak this at International Nickel’s annual meeting at Toronto, Canada, or April 17. He didn’t say any more about the company’s New Caledoniar interests. • The Kalena Timber Company which began exporting timber from the New Georgia Group of the Solomons in April, 1967, will builc a new sawmill at Vim Harbour, Nev Georgia, capable of producing 20,(MX super feet of sawn timber a day ir full operation.

Eight Filipino technicians, whe arrived in the Western Solomons ir early March, have already startec erecting the mill. They will late: erect a mill outside Honiara to handle timber produced from Vim.