Eric Tlozek | ABC News | 4 May 2017
The company which used to the run the controversial Panguna copper mine on the island of Bougainville is now trying to reopen it with the support of the island’s Government.
It has been almost three decades since Panguna was abandoned, after anger about the mine led to the outbreak of an armed insurgency known as the “Bougainville crisis”.
Now the Bougainville Government believes it needs the mine to reopen, so the region can have a source of revenue that could enable it to become independent from Papua New Guinea.
The bid by the Bougainville Copper Limited (BCL) to reopen its Panguna mine is stronger than one might expect, given the mine led to an armed insurgency and its abandonment left central Bougainville with many environmental problems.
But this time it will be quite different and the landowners will be brought along on the journey.
BCL secretary Mark Hitchcock said restarting the mine would allow the company to address some of the environmental and social problems it left behind.
“We did have to leave in a hurry and things were not closed down the way that a normal mine would close,” Mr Hitchcock said.
“When we go back, we’ll be conducting our baseline studies to see what the situation is and we will, as the mine progresses, progressively work on some of those environmental issues.
“But with the people, the mine will only work if we involve them all the way along.”
BCL was owned by Rio Tinto, but the mining giant gave its shareholding to the PNG Government and to the Autonomous Bougainville Government, the entity created as part of the Bougainville Peace Agreement to end the crisis.
The PNG Government said it would then give its shareholding to unspecified landowners in Bougainville, creating uncertainty about who the company must deal with and leaving the Bougainville Government without a controlling stake.
Mr Hitchcock said that has created another problem to be resolved.
“The ABG and the landowners are a little bit concerned about who the actual owners are, after Prime Minister O’Neill said that he was going to gift them to the people of Bougainville and the landowner,” he said.
“So that’s one of the issues we need to sort out. “
The PNG and Bougainville Governments have just agreed to create a Joint Steering Committee to resolve this and other issues.
BCL executive chairman Rob Burns said that was a major step forward.
“So we’ve got commitment in that respect that all parties are going to work together and it’s terrific news for BCL,” Mr Burns said.
BCL was stripped of its mining tenements and left with just an exploration licence, but it still has all the resource data for the site.
Other companies have expressed an interest in mining Panguna, but the Bougainville Government is giving preference to BCL because it owns part of the company.
Raymond Masono, Bougainville’s Deputy President and Mining Minister, said “BCL is not longer the devil that we know”.
“We actually own this devil as a major shareholder in the company,” he said.
“Also, BCL under the Bougainville Mining Act has the first right of refusal to Panguna.”
BCL return expected to face opposition
The main reason the Autonomous Bougainville Government is supporting a resumption of mining is revenue.
There will be a referendum in 2019 on whether the region should become fully independent of Papua New Guinea, and the Bougainville Government believes a mine is the best way to guarantee income for a new country.
“We believe that Panguna can bankroll Bougainville’s autonomy and independence if the people so decide in the 2019 referendum,” Mr Masono said.
The Bougainville Government says most landowners support the resumption of mining, but other residents may be less convinced.
A United Nations Development Program report in 2014 found there was no evidence of majority support for reopening the mine amongst the general population.
There are also some organised groups who oppose BCL’s return.
Mr Burns said the company was aware of “active detractors”.
“We believe that they’re a very minor group and the most vocal of that group have competing interests in our Panguna mineral rights and they aren’t truly representative of landowners,” he said.
The push to reopen Panguna is part of a broader move by the Bougainville Government to lift its moratorium on mining in general.
BCL’s attempt will surely be watched by companies and investors to see how well the damage of the Bougainville crisis has healed.