21/07/2026
WHY MRDC HAS REPORTED LOSSES
The Mineral Resources Development Company, or MRDC, was set up to hold and manage equity and royalty benefits from PNG’s mining, oil and gas projects on behalf of landowners. However, audits and public reports over the years show the company has recorded significant losses. These losses have come from a combination of poor investment decisions, governance weaknesses, and delays outside of MRDC’s direct control.
A major source of loss has been high-risk and poorly performing investments. The most widely cited case is the Taumeasina Resort in Samoa, where MRDC paid K19.347 million for a 25% stake. According to the Auditor General, the investment is now valued at nil after accounting for losses on acquisition, impairment, and annual operating losses, wiping out almost K20 million. MRDC has also made other overseas investments that have not delivered any return but have instead resulted in further impairment losses. Domestically, there was a K14 million loan to PNG Air in 2016 for working capital, with an agreement for equity that had still not been issued years later. Other deals, such as the purchase of a helicopter company stake and involvement in the Pasca Project using trust funds, have also attracted scrutiny and criticism for value and process.
Governance and oversight issues have compounded the problem. Reports have highlighted high levels of director remuneration, travel expenses, insurance costs, and management fees that do not appear linked to performance. The Auditor General and Parliament have raised concerns about fraud, misappropriation, abuse of office, and breach of trust in the management of landowner trust funds. International auditors also censured MRDC for failing to follow proper accounting standards, and there has been a long gap in audited financial statements for some MRDC-managed entities.
Revenue delays have added further pressure. Payments to landowners from major projects like PNG LNG depend on the State, the Central Bank, and the resolution of landowner disputes. In some cases, court orders and clan disagreements have held up the opening of trust accounts, meaning funds could not be distributed even when they were available.
Finally, the broader resource sector environment has played a role. Falling commodity prices, high project costs, and fiscal arrangements that shift more risk to the State have reduced the dividends and returns that flow back to MRDC’s equity holdings.
In summary, MRDC’s losses are not from its core mandate of holding project equity for landowners. They have largely resulted from imprudent investments, weak financial controls, and administrative delays that have eroded value. To restore confidence, there have been ongoing calls for stricter investment rules, better transparency, and management of landowner funds to the same standard as institutions like Nasfund and Nambawan Super.
