Rowan Callick | The Australian | 23 August 2016
Papua New Guinea Prime Minister Peter O’Neill has escalated his feud with Bougainville’s President, insisting his cabinet’s offer to hand over a key parcel of shares in Bougainville Copper to mine landowners is final.
“The distribution of shares for Bougainvilleans will be done by themselves,” Mr O’Neill said.
President John Momis had “furiously” rejected the PNG plan, announced by Mr O’Neill to the parliament last week, to transfer to “the landowners and the people of Bougainville” the 17.4 per cent parcel recently given to the national government by Rio Tinto, the former owner.
If combined with the further 36.4 per cent parcel given by Rio to the Autonomous Bougainville Government led by Mr Momis, this gives the island a controlling stake over the mine — which still contains copper and gold worth about $50 billion, but is estimated to cost upwards of $6.5bn to reopen.
However, if the 17.4 per cent parcel is given to a Bougainvillean splinter group that is at odds with the autonomous government — and several remain, leftovers from the civil war of 1989-2001 — then that group would hold a veto power over further development in the island.
The mine is widely seen as the key potential income source for the island, whether Bougainvilleans choose in their 2019 referendum to seek independence from PNG or to remain autonomous within PNG.
Mr Momis said he was “angry because it’s the ABG that speaks for the people of Bougainville”.
“Mr O’Neill has rejected my advice,” he said. “He is interfering in Bougainville. He acts in the same high-handed manner as the colonial administration and BCL when the mine began. That caused the Bougainville crisis.”
Mining legislation passed by the Bougainville parliament already provides landowners with “full decision-making involvement and a good revenue share, if mining resumes”, he said.
Mr O’Neill responded yesterday:
“We have had enough of this nonsense and attempts manipulate the peace process for political gain.
“I have deliberately given these shares to the people so that the ABG does not have outright control of 53.8 per cent of the mine. The ABG is very welcome to participate in the consultation process with the landowners, but these shares will go to the people who have a direct stake in the mine.”
The legislation guarantees landowners 5 per cent free equity in the operating company once the mine starts producing again — which, Mr Momis said, would be worth much more than the 17.4 per cent being handed to them by Mr O’Neill since the cost of re-opening the mine would fall on existing shareholders, “dramatically diluting” their equity.
“The future of (mine site) Panguna is Bougainville’s most sensitive issue,” Mr Momis said. “I have explained to the PM several times why it is vital the ABG holds the Rio shares in Bougainville Copper Ltd.”