Rowan Callick | The Australian
The Bougainville Autonomous Government is convinced Bougainville Copper — which owns a mine containing copper and gold worth more than $50 billion, as well as a recently reconfirmed exploration licence — is now in play.
Bougainville President John Momis last week called on Papua New Guinea’s Prime Minister Peter O’Neill and Rio Tinto to reveal any dealings over Rio’s 53.58 per cent shares in BCL.
“For over a year now, Mr O’Neill has expressed interest in the national government taking control of BCL,” Mr Momis said.
“He proposes that PNG operate the Panguna mine in Bougainville in the same way it operates the Ok Tedi mine,” which Mr O’Neill’s government took over in 2013.
The PNG government has hired Peter Graham, who led ExxonMobil’s successful construction of the country’s first liquefied natural gas project, to manage Ok Tedi mine and potentially to steer other state-owned mining assets.
The Bougainville mine, which was closed by conflict in 1989 and which would cost an estimated $6.5bn or more to reopen, is also owned 19.06 per cent by the PNG government, and 27.36 per cent by other shareholders.
Mr O’Neill confirmed that “we have had discussions with other shareholders of BCL on a range of issues including the reopening of the mine and the disposal of shares by existing shareholders, including Rio Tinto”.
But, he added, “There are no secret deals, and we are disappointed that President Momis is trying to use this issue at the time of the election” for a new Bougainville government that takes place at the end of next month.
“President Momis has been informed of whatever talks we have with other shareholders of BCL, only because the state is the second biggest shareholder,” Mr O’Neill said.
There would be no talks about reopening the mine, he said, “until landowners and the people of Bougainville are ready”.
It is understood the Momis government’s concern was aroused by information it had received that law firm Norton Rose Fulbright, which does a considerable amount of work for Rio internationally, had instructions to handle the sale of Rio’s shares, and had held discussions with agents in Port Moresby in relation to the deal. A Norton Rose Fulbright spokesman declined to comment when questioned by The Australian.
The BCL share price suddenly soared by 50 per cent a fortnight ago. The ASX issued a “speeding ticket”, asking the company to explain the leap. BCL said it couldn’t.
Mr Momis, whose government has recently passed new mining legislation that hands back control of all resources to landowners, said:
“We cannot allow a new form of colonial dealings in Bougainville’s resources to occur.”
He said that last month he wrote to BCL, seeking advice from either it or Rio Tinto, about whether share transactions between Rio and PNG were under discussion or preparation.
“I received a brief reply from Rio, addressed to BCL but passed on to me, dated March 23. The letter simply stated that ‘Rio Tinto … is reviewing its options with respect to its stake in Bougainville Copper Ltd. This review is continuing’,” Mr Momis said.
“Secret dealings of this kind are completely unacceptable to the people of Bougainville,” he said. “It would be unacceptable to the people of Bougainville for the national government to try to take control of Panguna.” Such a move, he said, would trigger demands for immediate independence.
Peter Taylor, who has been chairman of BCL for 12 years, told The Australian:
“the Bougainville government seems to want the mine reopened, but we have to sit down … and see what’s doable”.