Time Running Out On The Only 100% GoPNG Owned Mine!

So what does a 100% GoPNG owned mine mean to me? Let us try to make a paradigm shift to ‘own’ our corporate business results at OTML. Try this mental shift by confirming some simple ‘technical’ truths about business ownership. Truth is the knowledge of things as they are. When you know the truth, you are enlightened and you can think then act differently.

So here we go on OTML ownership.

In a democratic country like our PNG, government is for the people and by the people. The concept of GoPNG should not be only confined to our representatives in Waigani. GoPNG is the people of PNG. GoPNG owns 100% of OTML. Then as citizens of PNG, we ‘technically’ own OTML!

Those fellow citizens in Waigani keep an eye on our OTML from the top-down. As citizen employees and owners, we are encouraged to keep an eye on our OTML here at the ground level or from the bottom-up.

There are two categories of business ownership: stakeholders and shareholders. Stakeholders may have shares (but under 100%) and who have an interest in the business. Also stakeholders are those whose interests hinge on the business being profitable, e.g. employees of an organization are stakeholders who will continue to be paid if the business remains profitable and operational. Shareholders on the other hand own 100% of the shares and are both stakeholders as well.

In OTML and its operations, all citizen employees (and citizen contractors engaged in its operations) wear two hats. That hat of the ‘employee and stakeholder’ as well as that hat of ‘employee and shareholder’. Expatriate employees and expatriate contractors wear one hat only: that of employee/contractor and stakeholder. The expatriate participants have a stake in OTML’s operations but they are not the owners!

In 2019 OTML generated US$1.1 billion (K3.74 billion) in revenue and from a total operating cost of about US$0.9 billion (K3.07 billion) produced a profit of about US$0.2 billion (K0.67 billion). As shareholders, we should be concerned about ‘HOW’ we produce this kind of amount of money for us and our GoPNG’s budget. How much of the US$0.9 billion (K3.07 billion) cost spending by OTML should be retained in the circular flow of income of our local/national economy to stimulate and grow our economy?

The guidelines on ‘HOW’ to operate and generate this revenue and profit is provided by in our values; safety & environment, integrity, accountability, teamwork, performance and sustainability (or SIATPS for short). Our values serve our collective wider interests.

As citizen stakeholders and citizen shareholders, we must take ownership of our business by making sure that OTML serves the interests of us, its owners. Our interests do not only mean paying dividends to our GoPNG. Our wider interests also include:

? Equitable employment opportunities for PNGn citizenship,

? Equitable business opportunities for PNGn owned businesses,

? Equitable training opportunities to train masses of PNGn citizen workforce,

? Equitable opportunity as an incubation space for mining preferred area PNGn owned SMEs and

? Equitable exposure opportunities for aspiring PNGns to rise, lead and manage a ‘big’ company (with revenue turnover of greater than a billion $).

These above interests can be served well if we also ‘plug the leakages’ as we go about generating our revenues and profits. Again, OTML’s values (SIATPS) guide the expectations on ‘HOW’ we should go about in plugging the leaks and producing revenues and profits to support shareholders, GoPNG and stakeholders.

Wear now our hat of the owner/shareholder and awake to this paradigm shift in OTML’s ownership. Escalate and be vocal about issues diverging from our values (SIATPS) and draining our revenue and profit buckets.

As citizens we must assert ourselves if we are to inherit the wealth of our country. As shareholders we must hold fellow shareholders and stakeholders (who are not owners) to account.

The threat of the biggest hole in our revenue and profit buckets will be that created by ‘agency issues’ and that needs to be plugged. Look out and stay alert for ‘agency issues’ that may arise. Shareholders give decision-making authority over the firm to managers. Note that manager in this instance mean any position below the BOD that is responsible for running the ‘operations’ and its various operational functions and has power to make decisions. Managers can be viewed as agents of the firm’s owners/shareholders.

Agency issues arise when managers place personal goals and interests ahead of the goals of the owners. The goals of the owners of OTML again are: generating revenue for the GoPNG budget as well as, employment, business, training, preferred area SMEs start-up and professional exposure and growth opportunities for PNG citizenship and owners.

Our values (SIATPS) provide the guidelines to lookout for corporate governance issues that may arise. In our attempt to own the results of our business, this paradigm shift to think as owners of OTML is required. Awake to this truth and this reality that as citizens, we technically own OTML. As owners of OTML, we are obliged to be concerned and to stay vigilant on 'HOW' we generate as well as 'plugging the leaks’ in the revenue that goes to funding the budget for our GoPNG.

In plugging the leaks (or withdrawals from the local/national circular flow of income) we know that in any business, Profit = Revenue - Cost. Our GoPNG share in the profits as dividends paid to it. The 'cost' component of this profit equation, if for example that K3.07 billion of OTML’s 2019’s operational cost or a larger proportion of it is spend in the country, the money stays in the country and helps to grow the economy. It is as simple as that. But too often we are just happy about the dividend and we forget or turn a blind eye about the 'cost' in the profit equation and the potential this cost spending has to grow our GDP as OTML's spending or injection back into the local and national economy (or local/national circular cash flow).

Hopefully this now causes a paradigm shifting understanding and gives meaning and reason to owning the corporate business results of OTML. We have been mining in this country for over 80+ years. Foreign firms and foreigners do not need to have monopoly over mining (as well as mining executive positions) in PNG and to be propagating their own interests which often results in excessive cost leakages or withdrawals from the local/national circular flow of income.

Time is running out on realizing fully our dreams and aspirations as a people and citizens of our country PNG.