Pacific Nickels generate $100.8m but only $6m paid to landowners & gov’t

The Pacific Nickels operations in Kolosori, Isabel Province has generated around $100.8m in six shipments this year but Parliament was told today that only around $6.6m was paid in taxes to both the government and the landowners.

This has led to the Leader of Opposition, Matthew Wale to call for a review of the shares as the benefits are very small.

Despite the millions, the minister of Mines and DPM, Bradley Tovosia, has confirmed that the mining company is facing financial problems.

In responding to a question from Wale on the total shipments being made by the company and the money it made, Minister of finance and treasury Manasseh Sogavare answered that there were already six shipments being made by the miners— amounting to $100.8m.

Of that total, around $3.5m was paid in royalty, withholding tax of the royalty was $162, 327, PAYE tax $1.063m, export duties $1.8m, other taxes $3.078m.

Wale said this is ridiculously low in comparison to a strategic resource like mining and wants to know how quickly the government is going to look into it to increase land owners and government revenue.

In response, Sogavare said the issue would be brought to the Cabinet so that they could renegotiate some of the agreements.

Sogavare also acknowledged that some the benefits to the mining companies were tied down to MOUs and MOAs that they have with the government, one of them was the front loading of capital expenditure. Sogavare said even before working they (miners) have already incurred very high capital costs.

Meanwhile, he said under such agreements (MOUs & MOAs) they (miners) are also exempted from import tax on machines, taxes, goods and customs duty.

“We will be approaching the cabinet to look at re-negotiating the agreement,” said the former PM regarding the Kolosori mining.

Sogavare pointed out that normally taxes are imposed once companies start to go into commercial production.

“Some mining companies are going on forever,” Sogavare made reference to benefits in the MOUs and MOAs.

According Tovosia, the six consignments of mining export from Isabel has resulted in the shipment of about 363, 505 tonnages of soil from the island.

On the future of the company, Tovosia reiterated that Pacific Nickels is facing financial problems, however, they still wanted to operate in the province.

He confirmed that they had approached the ministry stating their interest to continue.

However, Tovosia said on their part, the government had demanded that they pay up their outstanding dues, which they had already done.

When asked if they still have a valid mining license, the minister confirmed that “yes they still have.” However, he said, the Mines and Mineral Board would meet soon to advice on a way forward.