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In line with the downward cyclical trend still buffeting the industry globally, the mining sector in Papua New Guinea remains in a cooling period in terms of exploration and production activity. To counter¬act tighter profit margins brought on by sluggish global demand for minerals and the corresponding drop in commodity prices, mining companies across PNG have responded by increasing efficiency and taking cost-cutting measures. Adding to the challenge of these market realities were other factors beyond the control of mining operators in 2015, such as a drought that lowered river levels enough to limit access to some mines and cut shipments, as well as temporary shutdowns due to health and safety concerns. These factors aside, the country’s historically strong cop¬per and gold mines remain a crucial component of the economy. This chapter contains an interview with Michael Johnston, President and CEO, Nautilus Minerals.

Much of Papua New Guinea’s economic success over the past decade, along with its prospects for future growth going forward, can be tied directly to the energy sector. The efficient construction and operational launch of the country’s first liquefied natural gas (LNG) programme the $19bn PNG LNG project not only secured unprecedented foreign direct investment (FDI) into the country and provided a stable revenue stream for years to come, but also delivered evidence that large, capital-intensive projects could be delivered effectively. With this proof of concept now established though the partnership of large international oil companies and the government of PNG, the door is open for further large-scale hydrocarbons recovery projects across the country. This chapter contains interviews with Peter Botten, CEO, Oil Search; Raka Taviri, CEO, Water PNG; and Tony Honey, Managing Director, PNG Forest Products.

In Papua New Guinea insurance makes up a small part of the economy by international standards, with the penetration rate at less than 2% of GDP compared to a global average of 7.5%, according to the UN Development Programme. Insurance in the country is also a sector of great opportunity. Access is straightforward given the regulations and low capital requirements, so international participation is high and newcomers are relatively free to enter. In addition, because penetration is low, the market is well placed to grow. This chapter contains a round-table with Salamo Elema, Acting Insurance Commissioner; Wayne Dorgan, Managing Director, Pacific MMI Insurance; and Philip Tolley, Managing Director, Capital Insurance

After a number of challenging years, Papua New Guinea’s capital markets seem to be finding their footing and may be on the cusp of great and positive change. In 2015 the country had its first initial public offering in three years, and it was a significant listing: a major local financial services group with part ownership of the stock exchange. Also, in 2016 a key stock started trading again after having been suspended in 2014. Significant reforms are being discussed, with Prime Minister Peter O’Neill weighing in, and these could result in much-needed consolidation and modernization of capital markets regulation and oversight. This chapter contains a viewpoint from Richard Borysiewicz, General Manager, BSP Capital.

Papua New Guinea’s banking sector is adjusting to the slowing of economic growth and to the foreign exchange shortage that is affecting local businesses. However, despite many challenges, the institutions remain well capitalised and highly profitable, and in some cases are maintaining positive profit growth. More than just holding its own, the sector is developing in significant ways that suggest structural shifts and new industry dynamics. Maybank’s local presence was acquired by the Kina Group, bringing a long-sought-after “fourth bank” to the market and promising increased competition, especially in the undeserved mid-market. Other players have been using this time to consolidate their positions, expand their offerings and enter new markets. This chapter contains an interview with Robin Fleming, CEO, Bank South Pacific; a viewpoint from Garry Tunstall, CEO, Nambawan Superannuation Fund; and an interview with Geoff Toone, Former Managing Director, Westpac Bank Papua New Guinea.

Situated at the eastern-most point of the New Guinea islands and in a different time zone from the rest of Papua New Guinea, the Autonomous Region of Bougainville is composed of two large islands, Buka and Bougainville, separated by a narrow tidal channel. Together with 168 smaller islands and countless atolls, it forms an archipelago that is geographically, geologically and culturally closer to the neighbouring Solomon Islands than to PNG, and its population of over 300,000 speak a dozen different languages. Bougainville’s development needs closely echo PNG’s own growth priorities, with infrastructure, improved services, health care and employment all featuring high on the list. Investors will watch with interest to see how the politics of the region develop in the run-up to the referendum, against a backdrop of untapped minerals and an agriculture sector that could prove to be highly lucrative drivers of growth This chapter contains interviews with Joe Lera, Minister of Bougainville Affairs; and Brenda Tohiana, Acting Secretary for Finance, Autonomous Bougainville Government.