PNG transfers remaining BCL shares

Carmella Gware | Loop PNG | March 13, 2020

The PNG Government has fully transferred its entire 36.4 percent share in the Bougainville Copper Ltd to the Autonomous Bougainville Government.

This was one of the resolutions reached during the first, and possibly the final, post-referendum Joint Supervisory Body meeting held on Thursday, the 12th of March, at Port Moresby’s APEC Haus.

It was the first Joint Supervisory Body, or JSB, meeting to be held since the referendum last year. It is also the last JSB as its name has been changed to Joint Consultative Body, and this body will continue to provide oversight to the post referendum consultation processes.

During the JSB, teams from the PNG and Autonomous Bougainville governments, including President John Momis and Prime Minister James Marape, sat together to decide a future for Bougainville.

The sixth out of the 13 agendas discussed and passed included the transfer of Bougainville Copper Ltd shares.

The JSB noted that in 2017, the National Executive Council made a decision for the National Government to transfer 17.4 percent from its 36.4 percent shares to the landowners of Panguna. Following that, on the 13th of December, 2019, at the joint announcement of the Bougainville Referendum results, Prime Minister Marape further announced that the National Government will transfer to ABG its remaining 19 percent of the BCL shares.

“This JSB affirmed that the entire shares of Bougainville Copper be passed to Bougainville Mining Ltd – the Bougainville Government and Bougainville people’s subsidiary company,” the PM, flanked by the ABG President and members of their technical teams, told media after a full day of meeting.

Rio Tinto and the ABG both own 36.4 percent each while public shareholders hold the remaining portion of the share capital.

Apart from BCL shares, the PNG Government has made it clear that the constitutional Restoration and Development Grant (RDG) will be given to support the budget on Bougainville while the National Planning Ministry has been directed to clearly define the K100 million commitment and report back in the next Joint Consultative Body meeting this year.

The JSB has also acknowledged and accepted the democratic choice of the Bougainville people for Independence.

Companies leave communities to grapple with mining’s persistent legacy

John C. Cannon | Mongabay | 28 February 2020

• The destructive legacy of mining often lingers for communities and ecosystems long after the operating companies leave.
• Several large, multinational mining corporations have scrubbed their images — touting their commitments to sustainability, community development and action on climate change — but continue to deny accountability for the persistent impacts of mining that took place on their watch.
• A new report from the London Mining Network, an alliance of environmental and human rights organizations, contends that these companies should be held responsible for restoring ecosystems and the services that once supported communities.

The scale of excavation for copper and gold in the 1970s and 1980s at the Panguna mine, then one of the world’s largest open-pit mines, was massive: It swallowed up surrounding tracts of forest and farmland and wiped out wildlife populations on the island of Bougainville off the coast of Papua New Guinea. The company that operated Panguna, a predecessor of London-based mining giant Rio Tinto, dumped the mine’s contaminant-loaded wastewater into local streams for more than a decade and a half, killing off fish and rendering them too polluted for human use.

A mill at the Panguna mine, Bougainville. Image by Robert Owen Winkler

Neither the Papua New Guinea government nor the company stepped in to protect the environment, even after local communities, reeling from the impacts, sounded the alarm on the mine’s effects on their health, lives and livelihoods. Those tensions festered, and soon a war for Bougainville’s independence began. Fighting throughout the 1990s killed some 20,000 Bougainvilleans, and though a 2001 peace treaty granted Bougainville a measure of autonomy, the effects of the conflict and the mine still linger.

The company abandoned the mine in 1990, leaving it under the control of the Bougainville Revolutionary Army, and in 2016, Rio Tinto officially handed over its shares in the mine to Papua New Guinea and Bougainville.

“There is, in my personal view, an obligation of Rio Tinto to come back and to contribute to cleaning up the mess they left behind,” Volker Boege, who has studied the conflict and co-directs the Peace and Conflict Studies Institute Australia in Brisbane, said in an interview. “The effects of mining will be with the people on the ground long after [the] mining ceased.”

Holding Rio Tinto and other corporations accountable once they’ve relinquished their control of mines remains a difficult task, according to a new report published Feb. 19 by the London Mining Network, a consortium of environmental and human rights groups.

Equipment at the Panguna mine in the early 1970s. Image by Robert Owen Winkler

Rio Tinto said in a 2016 letter written by a company executive that the operation of the Panguna mine “was fully compliant with all regulatory requirements and applicable standards at the time.” But for Boege, who wrote the case study on the Panguna mine included in the London Mining Network report, that assertion doesn’t address the company’s ethical responsibility.

“I think it’s not good enough to just say, ‘We followed the legal obligations of the early 1970s or late 1960s,’” Boege said, “because everybody knows that this enables this kind of environmental destruction that people are suffering from even today.”

The report details lays out similar stories throughout Oceania and Southeast Asia. In western Papua New Guinea, BHP, a mining company with headquarters in Melbourne and London, elected to go with riverine tailings disposal — the same waste management strategy that polluted waterways around Panguna — for the Ok Tedi mine, a gold and copper deposit that BHP excavated until 2002. Situated amid forested mountains, the mine has been blamed for a 95% drop in fish numbers in the Ok Tedi River and degrading 2,000 square kilometers (772 square miles) of forest. Researchers figure that Ok Tedi has affected the livelihoods of around 40,000 people who depend on fishing, hunting and gardening.

Hannibal Rhoades, head of communications for the London-based NGO Gaia Foundation, said that companies like BHP often lobby governments for less stringent regulations. In Ok Tedi’s case, BHP persuaded the government to go along with riverine tailings disposal in the early 1980s.

The Ok Tedi mine in western Papua New Guinea. Image by Ok Tedi Mine CMCA Review

Papua New Guinea, like many resource-rich countries, has struggled to develop economically. As a result, leaders are often amenable to legal conditions favored by the company so they don’t lose a possible source of revenue.

While that’s a familiar pattern, said Rhoades, who wrote the Ok Tedi case study, it shows that governments too must be held accountable for protecting their citizens and the environment.

In addition to the companies’ role, he said, “It’s a game of power influence at the state level.”

Across the border in Indonesia’s half of New Guinea Island, the massive Grasberg gold and copper mine sidles up to the flanks of some of the region’s tallest mountains. Nearby, rare (and shrinking) equatorial glaciers cling to the summit of Puncak Jaya, towering 4,884 meters (16,024 feet) above sea level.

Still in operation today, the mine pumps an estimated 200,000 metric tons of waste into the Ajkwa River every day, contaminating a source of drinking water for local communities. Rio Tinto had been involved in the mine from 1996 until 2018, when it sold its stake to Indonesia’s state mining company, PT Indonesia Asahan Aluminium.

The Grasberg mine as seen from space. Image by ISS Crew Earth Observations Experiment and the Image Science & Analysis Group, Johnson Space Center

An investigation by The New York Times in 2005 found that Rio Tinto’s partner, U.S.-based mining company Freeport-McMoRan, had been paying tens of millions of dollars for Indonesian military and police to protect the operation’s employees. Local residents, such as Yosepha Alomang of the indigenous Amungme people, say that these government security forces in fact were there to deter local communities through intimidation from voicing their concerns.

But Rio Tinto says that when it sold its stake for $3.5 billion in 2018, its responsibility to address the problems for the local environment and communities that the mine has created ended as well, according to a case study written by Andrew Hickman, a researcher with the London Mining Network.

Hickman, Boege and Rhoades agree that challenging such contentions by companies that were once involved is an uphill battle. The success of using the courts varies. Several lawsuits against BHP for its operations of Ok Tedi yielded a settlement with the company, but BHP didn’t stop dumping waste in the river. In 1996, Alomang and other leaders sued Freeport unsuccessfully in the United States.

The London Mining Network advocates for the continued development of a United Nations treaty on transnational corporations that would codify protections for human rights.

Boege said that such “globally applicable guidelines” were necessary. But “they are not a panacea,” he said. “The problems can only be solved in the specific local context.”

Another tactic has been to bring local leaders like Alomang to the annual general meetings of companies such as BHP and Rio Tinto so they can speak with executives and shareholders about the problems their communities face.

Requests for comment from Mongabay to BHP and Rio Tinto went unanswered.

The Grasberg mine in 2007. Image by Alfindra Primaldhi

Companies have responded in their approach, however — at least as far as changing the narrative around the impacts of resource extraction. Rio Tinto, for example, says that a future “low-carbon economy” will rely on the minerals it produces, and touts its moves toward carbon neutrality in its operations.

Hickman calls such moves to scrub a company’s image “window dressing.” He also said that, when confronted with the testimony of leaders such as Alomang, these companies “have learned to be polite, but underneath the politeness is a fist of steel.”

That’s because the changes to operations, whether to make them more environmentally friendly or to ensure that communities are better informed, often lag behind the rhetoric put forth, the Gaia Foundation’s Rhoades said.

“It’s great that there’s that narrative and the investors are more active,” he said. But across much of their operations, he said, “their PR still far outstrips the genuine efforts on the ground to change practices.”

New report names top British companies responsible for toxic mining legacies

Kalimantan, Indonesia. Coal mining operation. Credit: Daniel Beltrá

BHP and Rio Tinto have a long history of extracting minerals then pulling out, leaving devastation in their wake. Climate justice organisation London Mining Network reveals the extent of this in a new report.

London Mining Network | Feb 19, 2020 

London Mining Network has published a new report entitled ‘Cut and run: How Britain’s top two mining companies have wrecked ecosystems without being held to account’. The report includes examples from Southeast Asia of where the British-Australian multinationals BHP and Rio Tinto have left legacies of conflict and environmental destruction, long after they’ve fled the scene.

Recent examples of mining messes include Brumadinho, the tailings (mining waste) dam owned by Brazilian mining company Vale, which collapsed in January 2019 in Minas Gerais, Brazil. Vale executives, along with its German advisors TUV Sud, were recently charged with the homicide of 272 people; 14 people are still missing. Vale, along with BHP, jointly own the Samarco iron ore mine and tailings dam which also collapsed in 2015, causing Brazil’s worst environmental disaster in history and the deaths of 20 people. The trauma due to loss of life, displacement and job loss and the environmental repercussions of contamination of river systems in both catastrophes will be felt for decades to come. The entire mining industry needs to be held to account for such mining messes, and laws made which demand the cleaning up of messes made by mining companies before they pull out of projects.

Despite the best efforts of the industry, particularly BHP, to greenwash the extraction of fossil fuels and metals, the practice of ‘cutting and running’ when companies close mining operations tells us another story. The harm that extraction causes people and the planet doesn’t end once the companies disappear.

On 10th February, BHP became the world’s top copper producer, but this isn’t good news for the communities affected by their copper mines, and the other metals and minerals it extracts. In 2002, the company walked away from the Ok Tedi copper-gold mine it had controlled since 1982 in Papua New Guinea. For years it had dumped waste straight into the local river system. Eventually the company concluded that it should no longer do that and should not have operated the mine after all. But 18 years later the contamination and mess remains.

Rio Tinto was the majority owner of the Panguna mine in Bougainville, operated by Bougainville Copper Ltd (BCL), for 45 years. It dumped toxic mining waste the copper-gold mine in Bougainville (an island off the coast of Papua New Guinea) straight into the local river system between 1972 and 1988. This caused such outrage that it sparked a war for independence from Papua New Guinea, a war in which thousands were killed and independence was not won. The mine was abandoned. In 2016 Rio Tinto gave the mine to the authorities in Bougainville and Papua New Guinea but they do not have the financial or technical means to clean up the waste.

For shareholders in Rio Tinto and BHP, the deadly legacies of these mines make for risky investments, as the report illustrates.

Co-author of the report, Hal Rhoades, from The Gaia Foundation, said:

“This report shows how British multinationals have profited from destroying ecosystems and people’s livelihoods on vast scales in the Global South, while leaving their mess behind for communities to deal with. These are the same companies who are now trying to convince us that they hold the answers to the climate emergency. We cannot continue to pay lip service to tackling climate change while allowing the world’s largest corporations to devastate ecosystems that help regulate the climate and the communities that care for them. Holding these companies accountable and calling out their greenwashing is a crucial part of climate justice.”

The Horse Breeder, the Novelist and the $60 Billion Panguna Mine

Panguna. RNZ/Johnny Blades.

Aaron Clark | Bloomberg News | January 27, 2020

John Kuhns has been many things: an investment banker, a silicon smelter operator in China and a novelist. His sights are now set on an abandoned mine with an estimated $60 billion of gold and copper.

Kuhns is among a handful of people exploring for minerals and courting landowners on the Pacific island of Bougainville. His rivals include an Arabian-horse breeder, a hedge fund investment manager who keeps wallabies on his estate and a former Australian defense minister.

The involvement of such an eclectic mix of entrepreneurs is a reflection of the fact that this is no ordinary mineral reserve. Rio Tinto Group operated the Paguna mine for 17 years through subsidiary Bougainville Copper Ltd. The global mining behemoth shut it in 1989 as local protests over mine revenue degenerated into a civil war that killed as many as 20,000 people.

The mine has been in limbo ever since. But that may be about to change as the Autonomous Region of Bougainville moves toward independence from Papua New Guinea after a referendum showed an overwhelming majority of the population on the small group of islands wants to establish a new nation.

While the political uncertainty may deter major mining companies from making an immediate investment, the mine’s riches attract entrepreneurs hoping to develop the asset to a point where they can deliver it to a big operator for a fee, said Peter O’Connor, a Sydney-based analyst at Shaw and Partners Ltd. “They have to create a story with a vision,” he said.

Success will depend on earning the trust of thousands of poor, customary landholders, many of whom remember the civil war that was triggered by communities demanding greater compensation from the mine.

“The landowners want to reopen the mine but they are divided by the interested developers,” said Sam Akoitai, a member of the island’s parliament who represents central Bougainville, an area that includes Panguna. “It’s really up to the landowners to come together to understand that the land belongs to the clan and not to some individuals.”

Bougainville Copper, which is no longer associated with Rio, has estimated it would take seven to eight years and $5 billion to $6 billion to rebuild the mine and resume full operations. The company is blamed by many locals for contamination attributed to the mine.

“We retain strong levels of support among customary landowners within the project area,” Bougainville Copper said in a statement. “We have a trusted local team on the ground that continues to engage with project area communities.”

The Bougainville Mining Act 2015 strengthened landowner control and was designed to increase compensation to local communities and the island’s government from future mining to avoid a repeat of the bloodshed of the 1980s and 1990s. The government also decided not to renew Bougainville Copper’s exploration license, which the company is challenging in court.

In June 2019, Kuhns flew several landowners to the U.S. to meet potential investors, including representatives from Barrick Gold Corp. At the Harvard Club in Midtown Manhattan, where stuffed moose, bison and even an elephant head adorn the rooms, the landowners heard Kuhns deliver a PowerPoint presentation introducing potential investors to Bougainville.

Barrick declined to comment.

“Panguna mine can be rejuvenated and can be resuscitated for a couple of billion dollars,” said Kuhns in a follow up phone interview. “It’s going to take a major to do that.”

Among those also interested in Panguna is Jeff McGlinn, who made his fortune in mining and construction services through Western Australia-based NRW Holdings Ltd., which he co-founded. McGlinn, who resigned from NRW in 2010, is part of the glamorous world of Arabian horse breeding, mixing with models and celebrities at parties on the French Riviera and promoting luxury brands. He once gave an Arabian colt to Italian opera singer Andrea Bocelli.

McGlinn’s roots in mining give him valuable experience for Panguna — one of NRW’s businesses was constructing dams that hold mining waste. He’s also linked to a recent effort by the island’s government to kick start development, when it created Bougainville Advance Mining. The government’s Executive Council proposed last year an amendment to the 2015 mining act that would give all available mining rights to the new company, in which McGlinn’s Caballus Mining would hold a stake.

That amendment drew criticism from landowners, as well as Bougainville Copper, the former mine operator, which says the proposal undermines its rights to mine Panguna. The bill was later shelved. A representative of Caballus said McGlinn was unavailable to comment.

Another interested party is Richard Hains, son of the Australian billionaire David Hains. Richard, famous for keeping wallabies on his Gloucestershire estate, has helped develop mines in some of the world’s most difficult places. He’s the largest shareholder of RTG Mining Inc., whose management team has financed, built and operated mines across Africa and Asia, including the Boroo gold mine in Mongolia.

“Some of the best opportunities in the mining business in the 21st century are now in the more difficult commercial environments,” Hains said in a phone interview.

RTG believes it can restart production at Panguna through a staged process in as little as 18 months for about $800 million.

“It’s far smarter to start with a smaller footprint,” said RTG Chairman Michael Carrick. “Then in consultation with the community, we can turn up the mine’s operation.”

RTG operates a joint venture with the Special Mining Lease Osikaiyang Landowners Association, a Panguna landowners group. The JV employs 15 people, including Philip Miriori, the chairman of the landowners group.

There are bigger fish too. Fortescue Metals Group Ltd. said in an emailed statement it has sent representatives to Bougainville to learn about the region and potential opportunities, confirming earlier reports. Founder Andrew Forrest is Australia’s second-richest person with a $10.2 billion fortune, according to the Bloomberg Billionaires Index.

Shaw and Partners’ O’Connor said Chinese miners may also have a chance of redeveloping Panguna because they have a greater risk appetite and access to cheap financing.

But the Panguna landowners group Chairman Miriori said the people he represents aren’t interested in working with Chinese developers because of their poor environmental track record.

If anyone wins the right to develop Panguna or other parts of the autonomous region they will need to do so cautiously. Violence remains a constant threat in a community that is still fiercely divided.

A geologist working for Perth-based Kalia Ltd. was killed and seven others were injured in an attack in northern Bougainville in December, according to the local government and the company, whose chairman is former Australia Minister for Defence David Johnston. Authorities subsequently suspended Kalia’s exploration expeditions and geological field work.

There’s also a moratorium on work at Panguna because of sensitivity to restarting the mine, said Raymond Masono, Bougainville’s vice president and minister for mineral and energy resources.

“We are no longer talking with any investors about Panguna until the moratorium is lifted, and we don’t know when” that will be, he said by phone. “The government is treading very carefully on this particular mine.”

But prospects for restarting Panguna and allowing for the development of new mines are bolstered by the idea that Bougainville would need revenue to have any chance of financing an independent state. Many hope the mineral wealth could ultimately help reduce poverty for the region’s 300,000 people where estimated per capita GDP is only about $1,100.

That would depend not only on clearing the way to restart production, but a government able to make sure that enough of the proceeds are used to fund development. “Given the failure of mining in PNG to deliver really anything like sustainable development, those hopes may end up being disappointed,” said Luke Fletcher, executive director of Jubilee Australia, a group that has tracked the effect of resource extraction.

But the lure of riches mean miners aren’t likely to give up.

“Bougainville had almost no exploration for nearly 40 years,” said Mike Johnston, executive director of Kalia. “There’s no other place like it on the planet.”

Bougainville president accuses mining company of lying to Australian stock exchange

Bougainville’s Panguna mine, for which RTG Mining is seeking an exploration licence.

John Momis says his government ‘will not rest’ until Australian-linked miner seeking licence for Panguna mine is banned for life from Bougainville and PNG

Kate Lyons | The Guardian | 24 January 2020

The president of the autonomous Bougainville government has accused an Australian-linked mining company of lying to the Australian Securities Exchange over its plans to reopen one of the world’s largest copper mines.

In a scathing statement, John Momis, the president of the autonomous Bougainville region, accused the Australian-linked RTG Mining of “lies and deceptions” and said his government “will not rest until all RTG and their executives are banned for life from Bougainville and Papua New Guinea”.

Momis was referring to a statement issued by RTG Mining to the ASX on Tuesday in which the company sought to clarify recent press reports, which have alleged that RTG staff are banned from entering Papua New Guinea.

In December, after the results of a referendum that saw almost 98% of Bougainvilleans vote in favour of independence from PNG, Momis issued a warning banning people affiliated with certain foreign mining companies, including six from RTG and one from Kalia Group, from entering Bougainville. Momis said they were creating “disharmony” in the region and that he had sought the assistance of the PNG prime minister and office of immigration and border security to assist with keeping them out of Bougainville.

However, RTG clarified in its statement to the ASX that its executives were “not banned from travel to Papua New Guinea” and emphasised that “the national government currently [have] constitutional authority over border control for the country”.

RTG is seeking to secure an exploration licence at the Panguna mine in Bougainville. The Panguna mine was at the heart of the brutal civil war in the region that saw an estimated 20,000 people killed between 1988 and 1997. The mine, which once provided 45% of Papua New Guinea’s export income, has been mothballed since the conflict began, but there has been talk about reopening it.

Among the companies in talks about resuming mining in Bougainville are RTG, which is listed on the Canadian and Australian stock exchanges, ASX-listed Kalia, Bougainville Copper Limited, a former subsidiary of Rio Tinto that ran the Panguna mine in the 1970s and 1980s, and Caballus Mining.

Andrew “Twiggy” Forrest has also expressed interest in mining in Bougainville, with the Sydney Morning Herald reporting that representatives of his mining company, Fortescue, travelled there in 2019 to explore “potential opportunities”.

There are disputes over land rights at the Panguna mine site, but RTG is the joint venture partner of the Special Mining Lease Osikaiyang Landowners Association (SMLOLA). RTG wrote in their statement to the ASX that the members of the SMLOLA “are the customary landowners who own the minerals at the Panguna Mine under the Bougainville Mining Act”.

However, Momis said the SMLOLA was established under an old system and that the autonomous Bougainville government considered its claims over the mine “illegal, null and void”.

There are concerns that disputes over land rights at the mine site might reignite tensions in the region. The Bougainville government enacted an indefinite moratorium on renewing the licence of BCL, a controversial mining company, in January 2018 over fears it could reignite violent civil conflict. However, since then, the government has shown signs that it was in favour of restarting mining in the region.

Despite voting for independence from PNG, the question of how an independent Bougainville would support itself hangs over the vote, with some experts saying it is impossible for Bougainville to become financially independent without a strong mining industry and that it would take much longer for other mining projects to be established and become profitable than it would take to reopen Panguna.

The autonomous Bougainville government and RTG Mining were contacted for comment.

ABG President refutes RTG claims

Autonomous Bougainville Government President John Momis.

One PNG | 22 January 2020

I refer to RTG Mining Inc.’s most recent announcement to the Australian Stock Exchange (ASX) dated 21st January 2020 whereby RTG deliberately made false claims to mislead their shareholders, the general public and the ASX.

Firstly, the Special Mining Lease Osikaiyang Landowners Association (SMLOLA) was an entity established under the controversial Bougainville Copper Limited (BCL) regime, which mistakenly placed landowners into individual blocks. This is in fact inconsistent with the traditional land inheritance system whereby land is owned by clans and families. The ABG has started the process to rectify this grave past mistake with the rejection of BCL’s licence over Panguna, thereby deeming all current mine affected landowner associations, including SMLOLA illegal, null and void.

So while it is true that RTG are the joint venture partner of SMLOLA as they have confirmed, I would like to confirm SMLOLA have no legal rights over Panguna and cannot enter into any legally binding agreements relating to Panguna. I am happy to advise however that the ABG will be assisting the true and genuine landowners to ensure proper social mapping is carried out in order to establish new legal landowner associations and entities.

Secondly, as per a media statement released from my Office on the 23rd December 2019, I would like to re-confirm and reiterate that the below RTG executives currently still have a travel ban on them, preventing them from entering Bougainville:

1. Mr Michael J Carrick – Chairman of RTG Mining
2. Ms Justine A Magee – CEO and Executive Director of RTG Mining
3. Mr Mark Turner – COO of RTG Mining
4. Mr Robert N Smith – Non-Executive Director of RTG Mining
5. Mr Phillip C Lockyer – Non-Executive Director of RTG Mining

I also re-confirm and reiterate that this travel ban will not be uplifted under any circumstance. Whilst there was a travel ban into Papua New Guinea, it has recently been uplifted due to RTG’s lies and deceptions to the PNG government and immigration department about their purported involvement in the Mt Kare project – a project that the world knows it will not succeed. It is therefore concluded that RTG have taken advantage of the fact that both the PNG and ABG operate independently of each other and do not always consult each other on foreign companies, and that RTG’s interest in the Mt Kare project is merely an expensive ploy and deceptive tactic to be able to have a presence in PNG and access to their only real interest – the financial rewards of the Panguna pit.

RTG and their executives should be totally and utterly ashamed of themselves for their corrupt, disruptive and divisive behaviour. They have tried to take advantage of our landowners and people and have shown a complete lack of respect for government authorities. RTG have completely misled the markets for their own financial gain and convenience. The ABG will not rest until all RTG and their executives are banned for life from Bougainville and Papua New Guinea.

As it is my duty to protect the people of Bougainville from immoral charlatans, I appeal to the ASX, TSX and OTCQB, as your duty to protect current and potential shareholders, that you perform a full investigation into RTG Mining and their executives and their misconduct. My Government would be more than happy to assist you with any enquiries relating to RTG and their activities whilst in Bougainville.

For current and potential shareholders and financial markets, I hope that this clears up any confusion or misunderstanding on RTG Mining’s position in Papua New Guinea, Bougainville and Panguna.

Panguna Landowners Question Mining Law Changes

Post Courier | January 6, 2020

The Panguna landowners have called for consultation ahead of renewed push to amend Bougainville’s Mining Laws. In a recent interview with Reuters, Bougainville vice-president and Mining Minister Raymond Masono said, in reference to his determination to push through with highly controversial amendment of mining legislation at all costs, that “the revolution is ongoing”.

Philip Miriori, the chairman of the Special Mining Lease Osikaiyang Landowners Association (“SMLOLA”) said; “There has been no consultation by the Mining Department with landowners post the rejection of amending legislation by the Bougainville Parliamentary legislative committee – none.”

“This legislation is opposed by each and every Panguna Landowner Association, local government bodies and all sections of the community. It will be a disaster for the mining industry in Bougainville and will ensure Panguna is never reopened.”

“Both the Autonomous Bougainville Government and the national government want Panguna to be reopened, so that it can reduce the dependency of Bougainville on the PNG national budget and enable us to deliver fiscal self-reliance for all Bougainvilleans,”

Lawrence Daveona said, “The Panguna landowners have written to Prime Minister James Marape, drawing his attention to this offensive and destructive attack on all Bougainville landowner’s hard-won legal rights being removed with the stroke of the pen, to allow the illegal transfer of the Panguna mine together with a near monopoly over all future large scale mining on Bougainville, to an unknown shelf company in the British Virgin Islands, based on a plan which can never work. PNG knows better than we do that, we must attract high quality foreign investment to grow and that means bringing in reputable development partners and allowing them to work with us to make Panguna and Bougainville a success.”

“This is the time for us all to pull together on the back of a very successful and peaceful Referendum. The revolution is done – a proposal like this will only create disharmony again and pit customary landowners against the mining department which is not necessary – we are here to work together co-operatively, to find a fair and equitable solution for everyone.”

The SMLOLA was established by the Autonomous Bougainville Government September 7 2011 with its Constitution being drafted by the ABG Mining Department.

The SMLOLA was established uniquely for and on behalf of all the customary landowners who own land contained within the area covered by the special mining lease at Panguna and now the subject of the expired EL 01, including the land used for the Panguna gold and copper mine pit, industrial processing areas, Panguna township and the areas around the mine within the area contained in EL 01.

The stated purposes of the SMLOLA pursuant to its Constitution is set out in detail in clauses 1.2 (a) – (h), and includes amongst other things, the duty to maximise the commercial benefits of their members in the Panguna Mine and promote peace, unity and co-operation amongst landowners in a sustainable manner.

The customary landowners and their families are members of the SMLOLA by right of birth within the 7 named villages, in accordance with the Naisoi custom, and as set out in clause 2.1.1(a) of the SMLOLA constitution.

The SMLOLA has in excess of 3,500 members.

The governing body of the SMLOLA is democratically elected every three years as required by clause 4.3.3 of the constitution, by the members so that its structure and board is truly representative of the owners. The current board was elected on 21 December 2018.

Section 8 of the Bougainville Mining Act states that “all minerals existing on, in or below the surface of customary land in Bougainville are the property of the owners of the customary land.

This is exactly the same as our unwritten customary law on minerals ownership that has been in effect for millennia.

Bougainville landowners seek help from PNG prime minister

Panguna. RNZ/Johnny Blades.

Radio New Zealand | 3 January 2020 

A landowner group at the site of the Panguna Mine has asked the Papua New Guinea Prime Minister James Marape to intervene in its dispute with the Bougainville Mining Department.

The group, the Special Mining Lease Osikaiyang Landowners, or SMLOLA, has written to the prime minister detailing its concerns that it is being shut out of involvement in any re-opening of the mine.

A resumption of mining at Panguna, closed by the civil war, has been touted by several groups as the way for Bougainville to develop a viable economy.

SMLOLA said since Raymond Masono became Mining Minister two years ago it has been shut out of any talks, despite it being one of the groups which own the minerals under the Bougainville Government’s Mining Act.

It said it feared the Mining Department was driving secret, controversial changes to this measure without the support of the wider Bougainville Government.

And it said a call for a travel ban on executives from its Australian partner, RTG, was disrespectful.

SMLOLA said the claims from the Bougainville Government about these executives causing disharmony by disrespecting local custom are “misleading and without factual substance”.

Attempts by RNZ Pacific to reach Raymond Masono for comment have been unsuccessful.

Bougainville voted yes to becoming the world’s newest nation. Now begins the gold rush

PHOTO: The people of Bougainville voted overwhelmingly in favour of independence. (ABC)

Natalie Whiting | ABC News | December 14 2019

A ceremony to announce the results of Bougainville’s historic referendum opened with a chorus of the Bougainville anthem. When the overwhelming result for independence was handed down, people spontaneously started singing it again.

It was a clear sign of the separate identity that Bougainvilleans have long maintained. The thumping result for splitting from PNG was an even clearer sign.

But the path to potential nationhood remains complex and far from guaranteed, despite the mandate from an almost 98 per cent vote of support offers.

The end of the referendum not only starts another political process, but it will also turn eyes back to a massive open-cut mine that has been sitting, waiting in the mountains since the 1980s.

PHOTO: The Panguna mine hasn’t produced a pound of metal in 30 years.

As Bougainville looks for a way forward politically, it also needs to look at economic options.

That’s something Papua New Guinea is keen for it to focus on as it grapples with how to respond to the vote.

PNG is known as the land of a thousand tribes and many in the Government are worried about keeping the rest of the country united if Bougainville leaves.

PNG Prime Minister James Marape has offered economic control but stopped well short of committing to independence for Bougainville.

Economically, the most obvious income stream for the resource-rich area is mining, but that would involve revisiting the issues that started the bloody conflict in the region.

Landowners at the site of the Panguna gold and copper mine, where the violence first broke out, say they are ready to see it reopen in the wake of the referendum.

Up to 20,000 people died in the secessionist conflict that followed, before the peace agreement which guaranteed the vote brought it to an end.

PHOTO: A small settlement has been built at the bottom of the Panguna mine. (ABC News: Natalie Whiting)

Several companies are already circling, keen to make a move now that the vote is over.

Whether they have the capital and the ability to reopen it peacefully remains to be seen.

PNG Prime Minister offers Bougainville economic control

PHOTO: PNG’s Prime Minister James Marape was welcomed at the airport with a guard of honour from police and a traditional sing sing group. (ABC News: Natalie Whiting)

As the referendum ballots were being counted in Bougainville’s capital Buka, speculation about the movements of Mr Marape were swirling.

Initial indications that Mr Marape would be coming to Buka for the announcement were replaced by rumours of him instead going to Panguna in the days after the result.

In the end his visit was moved to the town of Arawa, near the mine. But Panguna and building Bougainville’s economy featured throughout his speech.

Thousands of people gathered in the middle of town to hear him speak. The people even wanted to carry him to the stage on a specially built chair, an offer he graciously refused.

PHOTO: Thousands turned out to hear Mr Marape speak in Arawa during his first visit after the referendum. (ABC News: Natalie Whiting)

Mr Marape has been seen as being more supportive of the referendum than previous leaders, but PNG has nevertheless made no secret of the fact it wants Bougainville to remain a part of the country.

The independence vote is non-binding, and amid the celebrations of the result, PNG has been quick to remind people that years of discussions between the two parties will follow and a negotiated outcome will then be presented to PNG’s parliament.

In the lead-up to the referendum, Mr Marape had been discussing a “third option” beyond independence and greater autonomy which the people were asked to choose between — what he called “economic independence”.

His speech was in a similar vein, focussing on economic development and self-determination, but avoiding mention of independence.

He presented a cheque worth 50 million kina ($21 million), promised another 100 million kina ($42 million) next year and control over income generated in Bougainville, including tax powers.

“The only thing I will ask you, is that I will look after the border and both of our flags must fly until we reach the conclusion of this process,” he told the crowd.

Certainly, Bougainville is currently in no position to support itself and the call to focus on building the economy is warranted. But Mr Marape wouldn’t be drawn on whether he could envisage independence for Bougainville.

“That’s something for the future. I can’t pre-empt the outcome of the consultations that will take place,” he told the ABC.

PHOTO: Bougainville President John Momis heads to the polls on referendum day. (ABC News: Natalie Whiting)

After such a comprehensive vote, there may be little appetite in Bougainville to accept something less than full independence.

But for the moment his speech was well received by the crowd, and Bougainville’s President is confident of productive discussions going forward.

The greatest expectation from Bougainvilleans after the referendum is for change — people want improved services and infrastructure. Both governments will need to make that a priority and it will require funding.

Landowners split over who should reopen mine

PHOTO: The disused mine has divided locals, some of whom have blocked access to the site over the years. (ABC News: Eric Tlozek)

In the base of the massive open pit of the Panguna gold and copper mine, a small settlement has been built and people work digging up gold that remains buried there.

It’s thought there is still $84 billion worth of copper and gold in the site, but re-establishing operations would likely take a decade and billions of dollars.

Keeping the mine closed has been seen as part of maintaining peace ahead of the referendum.

PHOTO: People dig for gold at the base of the Panguna gold and copper mine. (ABC News: Natalie Whiting)

The local landowners now largely want to see it open, however, a split is already forming over which company should be brought in.

The most prominent landowner group is backing Australian company RTG, but there is another group of landowners who want to see the original company, Bougainville Copper Limited, brought back. The Bougainville Government has supported a third company, Caballus, which is also Australian.

That, combined with the ongoing political discussions, could create an uncertain investment landscape.

Mr Marape has said the PNG Government’s 39 per cent stake in Bougainville Copper Limited will be given to Bougainville, but he urged people to look at other industries as well, like agriculture.

It’s not just Panguna that has been attracting attention — landowners say they’ve received visits from other companies, some from Australia and some from China, interested in looking at other greenfield sites in the region.

Australia could face difficult diplomatic waters

The current geopolitical climate in the pacific — where China and the west are seen to be in a battle for influence — has thrown another filter on the vote.

Much has been made of possible offers from China to help Bougainville develop if it is a fledgling country.

However, Bougainville President John Momis has said there have been no offers from the Chinese Government and it was unclear if money being offered by companies, including some said to be interested in Panguna, would actually materialise.

PHOTO: The Panguna gold and copper mine sparked a war that killed 20,000 people. (Reuters: Trevor Hammond)

He said: “These are complex issues, which we’re not going to deal with right away.”

The geopolitical and diplomatic complexities of either a new nation in the region, or of a disagreement between PNG and Bougainville during the upcoming negotiations, is undeniable.

Nowhere will that be felt more keenly than in Australia, which is a key financial and development supporter of both.

Already a key former combatant from the crisis is calling for the international community to “ask PNG to accept the reality and let Bougainville go”.

PNG’s Bougainville Affairs Minister Sir Puka Temu has urged the international community “not to interfere in the consultation phase”.

“What we want is to achieve an outcome like what we did 18 years ago, that is a joint creation — the Bougainville Peace Agreement was a joint creation,” he said.

In a statement, Australia’s Foreign Minister has passed on congratulations for the vote and says Australia “looks forward to continued productive engagement” between the two governments.

PHOTO: Flags were proudly flown around the region when the people of Bougainville overwhelmingly voted yes to independence. (Reuters: Melvin Levongo)

But as the cobalt blue of Bougainville’s flags flickers from buildings and cars across the region in the wake of the vote, credit must be given to both it and PNG for almost 20 years of peace and an incredibly well-run referendum.

Hopefully, the next phase will be as successful.

An independent Bougainville could mean Panguna’s rebirth, a mine with a Grasberg scale potential

BCL via International Mining | 11 December 2019

Talk to any Australasian mining manager “over a certain age” and it is likely they or one of their compatriots from mining school spent some halcyon days working at the Panguna copper-gold mine in Bougainville, which in its heyday was one of the largest mines in the world, and on paper still is in terms of potential. Tales of high salaries, escapades during time off in Rabaul…you get the picture. After the deposit was discovered in the 1960s, the open pit mine in Panguna was opened by in 1972 by Bougainville Copper Ltd, a subsidiary of Rio Tinto, through its Melbourne arm Conzinc Rio Tinto, opened in 1972, with Rio only selling its BCL stake in 2016.

Back to the 1970s and Panguna soon provided 44% of Papua New Guinea’s export income and in the 17 years prior to 1989, the mine produced concentrate containing 3 Mt of copper, 306 t of gold and 784 t of silver. But it all came to an end in 1989 when production abruptly halted following separatist militant activity by the Bougainville Revolutionary Army fighting against the PNG army, mainly over issues caused by a large influx of PNG migrants that did not sit well with Bougainvillians.

And much of the equipment is still there, overgrown by tropical jungle and unused. Bougainville Copper also trained some 12,000 employees, including approximately 1,000 completing full trade apprenticeships and some 400 completing graduate and post-graduate studies that resulted in considerable progress in the localisation of the company’s employees and significantly added to the number of skilled workers elsewhere in the country’s workforce.  

On 1 July 2016, BCL’s major shareholder, Rio Tinto, transferred its 53.8% shareholding for distribution to the Autonomous Bougainville Government, for the benefit of Panguna landowners and the people of Bougainville, and to the Independent State of Papua New Guinea. 

Fast forward to December 2019 and an independence vote by the people of Bougainville (98% in favour) means the likelihood of Panguna mine returning to production, and joining the likes of Grasberg, Lihir, Porgera and OK Tedi in the region’s hugely important mining industry, have just got much higher. The referendum was approved by the Papua New Guinea government, but the result is non-binding. That said, it puts a lot of international pressure on PNG to grant Bougainville independence. The islands have a population of around 300,000, and 206,731 people enrolled to vote in the referendum.

Panguna is the single obvious route to a vast and relatively quick revenue source for any new sovereign nation of Bougainville. BCL is already majority owned by the people of PNG and Bougainville. And it would come at a good time mining wise, as it would be in a position to use the latest technologies available to maximise productivity and efficiency from automation to digitalisation, though this would have to be balanced with supplying large numbers of badly needed skilled jobs in the country. And of course the mine could support a vast industry of other businesses that come with mining from catering to cleaning to logistics to accommodation, which all where possible should be locally owned.

BCL’s task has been made more challenging with a decision in January 2018 by the Autonomous Bougainville Government not to grant an extension of the company’s exploration licence (EL1) – which Bougainville Copper believes was legally and procedurally flawed. This decision is subject to an ongoing Judicial Review in the PNG National Court.

Regardless, the company believes BCL presents the best value proposition to redevelop Panguna – particularly given the strong majority ownership stake that the people of PNG and Bougainville have in the company – and continues to work towards this eventuality.