The Long Term Fund (LTF) represents 2/3 of net income received from OTML after deducting operating expenses and all other legal contractual obligations as specified in the rules of the program relating to the application of the income received. Under the Rules of the Company, Funds from the Long Term Fund must be invested in 'low risk' investments.

The primary objective of the investment program of PNGSDP is to increase the size of the Long Term Fund through interest rate earnings, dividend income, capital gains and foreign exchange gains. As the size of the LTF builds up before Mine Closure, annual investment income will ideally increase to the point where investment earnings can meet the annual expenditure requirements of the Program Company without materially reducing real capital of the Fund.

Whilst the Development Fund is primarily utilised by the Sustainable Development Program to make expenditures on projects, each year the balance of the Development Fund which has not been disbursed is invested through the Investment Program, with the objective that it will be available with interest for expenditure on projects in later years.

The Board of Directors has established an Investment and Finance Committee to oversee the Company's Investment Policy and Guidelines.

The Development Fund is used to support development projects under the Sustainable Development Program. PNGSDP works together with projects partners in order to identify, develop and finance projects which meet our sustainable development criteria.

The Development Fund receives one third of dividend income from OTML after deducting operating expenses, contractual and other legal obligations.

Between now and mine closure in 2013, one third of the Development Fund is allocated to the Western Province Fund, and two thirds is allocated to the National Fund. After Mine Closure, income from Ok Tedi Mining Ltd to the Development Fund will cease and the Long Term Fund will be utilised to support ongoing activities of the Sustainable Development Program, which PNGSDP should be able to sustain for 40 years or more after Mine Closure.

Following Board approval, PNGSDP management must conclude a Project Funding Agreement with project partners in order for financial resources to be allocated for implementation of the project. Only funding that has been approved through this process can be disbursed from the Development Fund.