Islanders scrutinize plans for reopening a mine they forced to close

By Catherine Wilson  

Rusting machinery at Panguna Mine: Photo Catherine Wilson

In the late 1980s, villagers on the remote island of Bougainville pulled off a remarkable feat. Outraged by years of environmental degradation and other grievances, they mobilized to force the permanent closure of a major multinational mining operation with the potential to produce 2.5 million metric tons of copper and 12.7 million ounces of gold.

Now, more than 20 years later, the indigenous people who own the land and the Autonomous Bougainville Government, which administers the island region of Papua New Guinea, are preparing to decide if the controversial Panguna mine will reopen. Today vegetation is encroaching on the mine pit, a reminder that its excavation resulted in the removal of an entire hunting forest which provided surrounding villages with wild pig and an opossum-like marsupial called a cuscus. The ruined buildings are now dwellings for some of the villagers.

There is little good that the villagers recall about the mine, nestled in a remote valley in the forested mountains of Panguna in Central Bouvainville. It produced US$1.7 billion in profit between 1972 and 1986. Of that, the PNG government got 61.4 percent, private investors got 32.9 percent and the traditional landowners got only 1.6 percent.

The mine opened in 1969 during Australian administration of the island as a UN Trust Territory. The local landowners were excluded from the mining agreement between the Australian government and Conzinc Rio Tinto Australia (CRA). They endured forced community evictions and watched as mine tailings contaminated agricultural land and the nearby Jaba and Kararong Rivers, killing fish and poisoning water supplies.

The operating company, Bougainville Copper Ltd (BCL), is predominantly owned by Rio Tinto (53.6 percent) and the PNG Government (19.1 percent).

In 1989 indigenous outrage had escalated to the point where the Bougainville Revolutionary Army blew up the mine’s power pylons following the company’s refusal to pay local landowners 10 billion PNG kina (US$5.4 billion) compensation. A 10-year civil war followed between the PNG Defense Forces, BRA and other armed groups on the island resulting in the ruination of towns and villages and estimated death toll of 20,000.

Access to the Panguna mine today is via a checkpoint manned by the Mekamui, who comprise former revolutionary fighters, and a winding road to the top of the Crown Prince Range where the stark edge of the mine pit, 6 km long, is visible through the dense forest. The road down the other side enters a broad landscape of gutted mine buildings, silent rusting trucks and mine machinery.

Lynette Ona, Panguna landowner and niece of Francis Ona, former leader of the Bougainville Revolutionary Army, calls it the ‘valley of tears’ in reference to Richard West’s unflattering history of mining company, Rio Tinto, entitled ‘River of Tears.’ 

While the decade long conflict remains vivid in people’s memories, indigenous landowners are quietly protecting their communities and attempting to regenerate land.

Early in the morning, the dawn breaks clear over the valley where, 20 years ago, villagers contracted and, in some cases, died of asthma due to the dust, and endured ear-splitting noise during the mine’s round- the-clock operation. Today the tranquillity is disturbed by the sound of birds, families busy preparing food, cultivating vegetable gardens and carpenters adapting ruined buildings into family dwellings. 

The people of Panguna, who already know the human cost of competition over access to land and natural resources, are contemplating how much their lives would change if mining is allowed back on their land. For islanders, priorities include both economic development and preservation of environment and culture.

Since the 2001 Peace Agreement ended hostilities, international aid and limited financial assistance from the PNG Government have engineered a slow recovery of infrastructure and public services. Long-term political and social stability is now dependent on the autonomous government guiding equitable development. The population has doubled in the past decade, with 97 percent of people residing in rural areas while most services are centered in the northern town of Buka. About 43 percent of the population is under 15 years of age.

Weapons disposal and reconciliation between parties to the civil war continues, but David McLachlan-Karr, UN Resident Co-ordinator in PNG, has stated that: “People will not give up their guns unless they are certain of a stable and prosperous future.”

The Bougainville government, which held preliminary discussions this year with Bougainville Copper Chairman, Peter Taylor, believes substantial revenue from the Panguna mine would build an economic base ahead of a referendum on political independence from PNG by 2020. There is also intense international interest in the mine, especially from rapidly growing countries in the Asia Pacific, such as China, seeking new sources of raw materials. .

On the expiry of BCL’s 42-year license for the Panguna Special Mine Lease on Nov. 24, the company applied for a 21 year extension. Chris Damana, Interim Chairman of the Panguna Landowners Association, an umbrella organization representing landowners from six mine lease associations, said that factors in their consideration of the application include the company’s plans for environmental cleanup, assurance that there will be no further damage to customary land, respect for the location of current communities, the rights of customary landowners as resource owners and agreement to an equitable share of the mine’s revenues.

The critical role of the autonomous government in coordinating the landowners’ input and setting the agenda for discussions will depend on its ability, as a new government set up in 2005, to build the capacity of its mining department to a sufficiently qualified level and implement mining laws and powers in advance of critical decisions. At present, it is developing new land policies based on traditional concepts of land ownership, while new mining laws are being drafted in association with the World Bank. Mining powers and functions will be transferred from PNG to the Bougainville government after new mining laws are established.

Once an independent environmental study of Panguna has been completed, the autonomous government and the local landowners will participate in a review of the Bougainville Copper Agreement .

According to a PLA briefing document: “A decision needs to be made soon about the future of the mine so environmental damage, site stabilization and other outstanding issues can be dealt with properly. In addition, for planning purposes, the government and the landowners need some certainty about whether or not Panguna mine revenues will be available.”

Outstanding issues include compensation for destruction during the mine’s former operations.

“We must look at those issues, like K10 billion [compensation] still stands, and the damage and the killings of the islanders,” said Lynette Ona, “Nobody has paid that compensation. If the landowners say the company can come and dig the mine, then the rebels will say, well, did you already pay my brothers who died for the crisis and there will be another crisis again.”

A core issue for many landowners is the potential loss and degradation of land, which is a major source of livelihoods.

“My concern is that there won’t be enough land,” said Joanne Dateransi, from Guava Village, located near the rim of the mine pit, “Because Bougainville is only a small island. There is a big scar here and we don’t want the same thing to happen again in the future.”

According to Panguna District Chief, Greg Doraa, traditional thinking promotes the importance of conserving mineral resources below the ground for future generations. He believes that economic development through agriculture and tourism must be explored first.

“We can export taros and sweet potatoes, bananas, water, lots of things,” added Dateransi, reflecting the diversity of local opinion about whether large scale copper mining is the right choice for the island, “We can use those things to boost our economy in Bougainville.”

Bougainville was the largest cocoa producer in Papua New Guinea prior to the civil war, and production has recovered impressively with output of 15,000 tons in 2007.

If the Panguna mine reopens, there will be many challenges for the autonomous and the landowners, including mitigation against the so-called Dutch disease — the negative impact on an economy of such factors as massive copper revenues, which cause a sharp inflow of foreign currencies and disrupt the local economy and social customs. Transparent use of government revenues must be ensured, along with their benefit to all islanders.

A healthy competitive state of other local industries must be maintained, and the impact of mining must be addressed on currently unsustainable levels of deforestation and resource extraction. Over the 10-year period 1990-2010, Papua New Guineas lost 8.9 percent of its forest cover to large-scale logging, mining and the land pressures of a rapidly increasing population. This is a serious challenge for an island state already experiencing impacts of climate change and alarming rates of natural resource depletion. 

As the sun set quickly over Panguna and the generator kicked in to bring light to our dining table on the second floor of a ruined mine building, now a dwelling, Philip Takaung, President of the Panguna-based Mekamui Government, which retains control of the mine, spoke of another possible future.

Takaung envisions this beautiful valley as a tourist destination to promote the local history, natural beauty and indigenous communities and cultures of the area to regional and international visitors.

There is no shortage of people on Bougainville with the inspiration to imagine not one, but many possible paths to a prosperous and peaceful future.