PROJECT- BASED MODEL FOR SECURING MINE CLOSUREFINANCIAL ASSURANCE IN PAPUA NEW GUINEA

摘要

This paper analyses alternative techniques of securing mine closure finance in Papua NewGuinea. The alternatives suggested are: 0.5 percent excise or production tax and a 0.5 percentsplit tax on income tax payable to the Government. These two are cash flow based financingtechniques and analysed applying linear cash flow financial models. A series of discountedcash flow models of hypothetical gold mines are constructed to assess the financial risksinduced by the excise and split taxes. The models will reveal whether or not the two taxesinduce financial risks on a single project. A third tax facility assessed is the possibility ofimposing tax on input suppliers of goods and services during mine operation.