Bougainville to set up local company to reopen mine

Radio New Zealand | February 4, 2019

Bougainville’s government is planning to re-open the long closed Panguna mine, and operate it with a company that’s majority-owned by Bougainville. 

This comes after much squabbling over who should get the mining licence, followed by a government moratorium on any development at the site because it could undermine the looming independence referendum.

Bougainville’s president, John Momis, says with Papua New Guinea failing to fund Bougainville ahead of June’s referendum, these are emergency times and the government has decided to take action. 

He told Don Wiseman a company called Bougainville Advance Mining is being set up to be owned by the government of Bougainville and an investor, Caballus Mining, owned by West Australian businessman, Jeff McGlinn.

TRANSCRIPT

JOHN MOMIS: Caballus Mining was specifically set up to be the partner. It never existed before, but Jeff was involved in construction and management of big mines in Australia for a long time. 

DON WISEMAN: To do this though you are changing your own Mining Act, to suit this one company.

JM: Not to suit the one company, to suit our company. To suit the needs and the aspirations of the people of Bougainville who own the majority in Bougainville Advance Mining (BAM) and it gives the best deal, the best ever of any other mining deal before, to the people and the government of Bougainville.  

DW: The mining legislation that was passed a couple of years ago was hailed by many, including yourself, so why is it that there’s a need to ‘remove complicated steps that are unnecessary’.

JM: It’s not complicated. It was the best then, but even under the existing mining law which says that the minerals, while they remain in the ground are 100 percent owned by the landowners. Once extracted they are no longer owned by the landowners. The landowners only have 5 percent free equity, five percent. And if they want to increase they can only increase it by another five percent which they must purchase. under the new, the amended law, the people and the ABG will automatically own 60 percent. Don’t you see the big difference? So the people of Bougainville will – this is probably against an investor, it’s certainly the best deal for the landowners.

DW: Sixty percent certainly sounds impressive. Would you though retain because, at some point,, you have got to bring in additional investors and they would want a share wouldn’t they, so is that 60 percent going to stay or be whittled down?

JM: Well if any investors want to come they could buy from the 40 percent that has been allocated, under our mining law to investors, including Jeff McGlinn and his company, and any other investor. 60 percent belongs to the ABG and the people of Bougainville. But that does not, in principle, stop us from selling some of our shares, as long as we have the controlling interest. The Bougainville Advance Mining will go out, BAM, that is the joint venture, will go and solicit funds, will go and raise funds for mining in Bougainville. The amendment proposal does not affect existing companies that are involved in exploration. We have three companies in Bougainville doing that now. They are not affected by this new deal.   

DW: So when you say you will retain a majority, you mean you wouldn’t sell below 50.1 percent?

JM: yes we wouldn’t sell below that.         

DW: Do you think that’s going to be attractive to investors if they come in and they are always going to be [the] minority?

JM: I am sure that if they are interested they will have to abide by our laws, because for too long they have been misleading us. All the companies that have operated – well, Bougainville Copper, operating in Bougainville, got away with trillions and they gave the people of Bougainville, the landowners included, a pittance. They destroyed our environment, destroyed our land, exploited the place.   

DW: OK so BAM, you are already looking at projects?

JM: Well right now we are looking at Panguna.

DW: So you have got to come to a deal with groups of people and other companies, I suppose, that are working in the opposite direction?

JM: That’s right and the spokesmen of one of the other companies have become spokespeople of these companies and not the landowners, because what they are promoting is totally against the best interests of the landowners. 

DW: You did have a moratorium on Panguna for a number of reasons. You didn’t want to spark tensions leading up to the referendum. Is now the best time to be heading into this?

JM: Well as you know we have a huge problem with respect to the referendum. The national government has refused to fund. We have not received any money since the last JSB meeting, and time is running out on us. The people of Bougainville are determined to have the referendum and they must find the money to fund the referendum. One way of doing it would be if we started our own company and generated the revenue to enable us to conduct the referendum. We cannot sit on our hands. These are emergency times and in emergency times you have to take necessary measures to address the issues that confront Bougainville right now. The national government is not going to support the Peace Agreement, which talks about not only reaching a mutually acceptable political outcome of a negotiation between the national government and Bougainville, but one of the other important objectives of the Peace Agreement is to secure a permanent peace and if the national government consistently and systematically fails or refuses to pick up their end of the stick then they are working against securing permanent peace. Our people have suffered for too long under unjust deals that have been imposed on Bougainville. And this time around we are not going to take it.

DW: So it is your plan that BAM, Bougainville Advance Mining, will be up and running within a matter of weeks?

JM: Well we have, we have to. Whether it’s a matter of weeks or – we have to take the first step along the road to wherever must start now. We have to be seen to be proactively taking and responsibly taking measures to enable, to put us in a position where we are totally united, where there’s total human solidarity in Bougainville to put us in the strongest position to negotiate. Because as you know the outcome of the political status of Bougainville will be negotiated between the two governments, after the referendum.   

New mining company the best deal for Bougainvilleans – Momis

Radio New Zealand | February 4, 2019

An amended Mining Act will mean a new mining company in Bougainville can offer the best deal to landowners, the president of the autonomous Papua New Guinea region says.

Bougainville is forming a company to open the controversial Panguna mine.

It will be called Bougainville Advance Mining (BAM) and a be joint venture with a newly established Australian entity, Caballus Mining, headed by West Australian Jeff McGlinn.

The president, John Momis, had placed an indefinite moratorium on mining at Panguna after landowners opposed the return of miner Bougainville Copper Limited (BCL).

The landowners said BCL would not take responsibility for the environmental and social impacts of its previous operation.

BCL ran Panguna until the outbreak of civil war in 1989 in which grievances caused by the mine were central to the 10 year conflict that cost over 20,000 lives.

Mr Momis said the Autonomous Bougainville Government (ABG) and landowners would be permanent majority owners of the new company.

“Under the new, the amended law, the people and the ABG will automatically own 60 percent,” he said.

“It’s certainly the best deal for the landowners.”

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2 Comments

Filed under Bougainville, Financial returns, Mine construction, Papua New Guinea

2 responses to “Bougainville to set up local company to reopen mine

  1. Hunter, Archie (UK)

    Hi,

    I’m a long time reader of your blog, would be very much interested in your personal take on this development.

    Do you really think Momis and the government have a chance of making this work?

    Best,

    Archie

    Archie Hunter | European Base Metals Editor, Global Copper Editor
    Tel: +44 20 7779 8503 |

    Fastmarkets | Fastmarkets MB | Fastmarkets AMM |
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  2. Pingback: Bougainville and Belden Namah: Who profits from Panguna? – PNG Echo

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