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Can Bougainville rebuild on the broken corporate dreams of the colonial age?

Bougainville Revolutionary Army guerillas stand next to a destroyed dump truck at Panguna mine in 1994. CREDIT: BEN BOHANE

Ben Bohane | Fairfax Media | November 16, 2019

To view the Panguna pit is to witness an industrial apocalypse and one of the largest man-made holes in the world; a vast open-cut copper and gold mine in the highlands of Bougainville island, slowly being reclaimed by jungle.

Bits of twisted metal and rusting debris lie scattered everywhere, buildings and heavy machinery smothered under moss and creeping vine. Here lie buried the broken corporate dreams of a colonial age but also the promise of a future with local landowners in control.

Before guerrillas from the Bougainville Revolutionary Army forced its closure in May 1989, Panguna was one of the most advanced – and profitable – mining operations in the world. It was operated by a company called Bougainville Copper Limited. Its parent company Rio Tinto, one of the biggest in the world, called Panguna “the jewel in our crown”.

Yet locals saw little of the wealth. Australian officials administering Papua New Guinea in the late 1960s made it clear to local landowners that Panguna’s riches were to underwrite the economy of the whole country as it headed to independence in 1975 and beyond. And that, inevitably, led to war.

‘Kastom’: responsibility

Although anthropologists had told the company that Bougainville was matrilineal – that it was women who owned the land, not men – the mine proceeded to do all its dealings with men. Women opposed it from the start.

In 1988 the New Panguna Landowners Association usurped the previous one and the senior woman in the area, Perpetua Serero, issued a demand to the mining company: pay 10 billion kina ($4.2 billion) in compensation for use of the land and renegotiate the mine lease. Their demands were ignored.

When Serero died soon after, her brother, Francis Ona, a former surveyor at the mine, took on the “kastom” – responsibility – on behalf of the women owners to reclaim the land, even if it meant war. Ona went bush with a stack of stolen dynamite from the mine and formed the first cell of the Bougainville Revolutionary Army (BRA), soon launching attacks on the mine. Several mine workers, including an Australian, were shot, prompting closure of the mine and declaration of a State of Emergency by PNG.

Within months Bougainville descended into a war as the PNG Defence Force tried, unsuccessfully, to regain control of the island. In the next 10 years, an estimated 10 to 15,000 people died, mostly from preventable disease because PNG imposed a naval blockade of the island which stopped vital medicines getting in.

The mine – or more accurately, the total mineral wealth of this island in the south Pacific – remained at the centre of the dispute. When I interviewed Ona in his Guava village above the mine in 1994, at the height of the war, he showed me plans by BCL to establish several other mines on the island.

BRA leader Francis Ona with his men in his home village of Guava, above the Panguna mine, in 1994. CREDIT: BEN BOHANE

“When we broke into the company safe and I saw the plans, I knew our fears were true,” he said. “BCL wanted to mine the whole island and our people were worried they would all be moved off the island so the company could mine everywhere.”

Although it’s unlikely the mine could have done so, or the PNG government would have allowed it, such concerns in a community with little access to information or understanding of the space-age project planted on top of a tribal culture added to resentment and suspicion. People were already angry at pollution from the mine, the lack of royalties accruing to them and the growing number of PNG mainlanders arriving to take jobs that locals believe should have been reserved for them.

Ceasefire and reconciliation

By 1997, the women had had enough of the war and convinced their men among the rank and file of the BRA to seek a peaceful, diplomatic route to achieve their common goal: independence.

A ceasefire was brokered in 1997 by New Zealand and in 2001 the comprehensive Bougainville Peace Agreement was signed by PNG and all the warring factions, except a BRA breakaway group called the Me’ekamui Defence Force (MDF). The MDF still controls the Panguna site today. Nevertheless they have recently contained their weapons under UN supervision and will join the rest of Bougainville in voting.

Rebel guerillas above the Panguna copper and gold mine in Bougainville in 1994. CREDIT: BEN BOHANE

Any grievances about the mine and colonial administration need to be weighed against the fact that Bougainville was the most prosperous province of PNG during the 1970s and ’80s. It had good infrastructure, including roads, hospitals and schools. BCL paid substantial tax but was caught in tensions between provincial and national governments. Many Bougainvilleans were trained by the mine and local businesses, with some going on to careers elsewhere in PNG and overseas.

Today, Bougainvilleans have reconciled after a 20-year peace process and are poised to vote in a referendum they have long awaited. Although it is expected a large majority will vote for independence, the final outcome must be ratified by the PNG parliament – which is not certain. If successful, Bougainville will become the newest nation in our region since East Timor.

A sign advertising a weapons surrender process and urging an independence vote on Bougainville. CREDIT: BEN BOHANE

More than 206,000 voters are registered and 246 polling teams have spread across the Bougainville islands, Australia, PNG and the Solomons. The two-week voting period begins on November 23 and ends on December 7, with results expected soon after. Overseeing the vote is the chairman of the Bougainville Referendum Commission (BRC), former Irish prime minister Bertie Ahern, who has said the referendum “should be celebrated”.

Despite being scarred by the history of mining there, Bougainvilleans are pragmatic and many believe they need mining to underwrite a newly emerging nation. Although its infrastructure has been destroyed, Bloomberg recently estimated that the Panguna mine alone still contains up to $US58 billion ($84 billion) worth of copper, gold and silver.

In fact, the whole island is known to be rich in minerals and mining has never stopped. Villagers continue to pan for alluvial gold in rivers and streams across Bougainville, as well as the tailings area of the Panguna mine. Recently I watched young and old villagers close to Panguna clawing away at the hillside, using high-powered hoses and pickaxes to create a slurry they could then pan through to find precious little nuggets.

During the war I saw Nescafe jars filled with gold being smuggled out of the island to buy essential goods in the neighbouring Solomon Islands. Estimates vary, but since the war ended somewhere around $50 million per year is being earned by locals through alluvial panning.

But big external players are circling too, hoping to get exploration licences to mine Bougainville’s riches. Apart from the contested Panguna licence, four exploration licences have been issued by the Autonomous Bougainville Government since they were able to draw down mining powers from PNG.

The Panguna mine: one of the largest man-made pits in the world.

Former BRA commander “General” Sam Kauona has one licence, Filipino company SRMI has another while Perth-based Kalia has two licences. Other Australian companies such as Fortescue are in talks, while China is also pitching infrastructure deals based on the “collateral” of Bougainville’s mineral wealth.

Last December a delegation of 10 Chinese businessmen approached the “Core” group of Bougainville veterans and leaders offering up to $1 billion to invest in mining, agriculture, tourism and the “transition” from autonomy to independence.

Even today, some Panguna landowners are in favour of BCL or its former parent company, Rio Tinto, returning “after they have properly reconciled with us and cleaned up their mess”. Amidst the uncertainty of new players circling, as well as growing geopolitical tensions, there is an oft-heard refrain: better the devil you know.

‘Australia’s secret war’

While some worry about growing Chinese influence, others are equally critical of Australia’s failure to present a viable alternative and the lack of personal engagement by Australian officials on the ground. Although Australia’s leaders are mindful of PNG sensitivities ahead of the referendum and want to avoid being seen to favour either side, Bougainvilleans wonder if Australia is indeed “neutral” now or will continue to work with PNG to deny Bougainville’s independence.

PNG army troops on patrol in heavy jungle in 1997, hunting for guerillas who had shot a boy dead nearby. CREDIT: BEN BOHANE

This has geopolitical consequences as China woos key players on Bougainville who remain suspicious of Australia’s position.

Australia has a long and sometimes troubled history with Bougainville. Today it is a valuable aid partner, providing around 12 per cent ($50 million per year) of Bougainville’s bilateral aid program, the highest of any donor. It has positioned itself as the partner of choice for Pacific nations, particularly after the “step up” began in 2017.

Between 1915 and 1975 Australia directly administered the territory. The very first action of the national Australian military at the outbreak of World War I – well before the Gallipoli landing – was to take control of German New Guinea, including Bougainville.

In World War II, 516 Australian soldiers and up to 40,000 Japanese died fighting on Bougainville. Australian Coastwatchers, hiding in the hills and protected by loyal locals, provided such valuable intelligence to the Americans taking Guadalcanal to the east that after the war US admiral “Bull” Halsey personally thanked them, saying they had “saved the Pacific”.

After the war, large cocoa plantations were established along with the Panguna mine. Australian riot police were used several times to quash the budding local independence movement. Two universal declarations of independence, first in 1975 and then in 1991, went unrecognised.

And during the Bougainville war between 1988 and 1998, Australia continued to train and equip  PNG forces. Some called it “Australia’s secret war” since Canberra tried to maintain an appearance of neutrality while supplying PNG with four helicopters that were soon turned into gunships.

Since the war Australia has funded a 20-year peace process and has won local and regional admiration for the way it allowed traditional reconciliation processes to unfold.

While Bougainvilleans remain suspicious of Australia’s real position on independence, they are thankful for the role it has played in the peace process and its ongoing development assistance.

Rough seas ahead?

In the wake of the referendum, if PNG, Indonesia or Australia were to attempt to deny or campaign against Bougainville independence, there is a strong possibility that hardliners on the island would issue another unilateral declaration of independence that some countries in the Pacific – and Beijing – might recognise. In that scenario, the potential for another security crisis in the region is real.

If the outcome of the referendum is an overwhelming vote for independence, Canberra must be prepared for two possibilities: either the creation of a newly independent nation in the region, or a crisis unfolding if the PNG government refuses to ratify the result.

Heavy trucks sit rusting on the edges of Panguna copper mine, closed in 1989 as a result of sabotage. CREDIT: FRIEDRICH STARK / ALAMY STOCK PHOTO

On top of all this there are Australian miners courting various groups within Bougainville to get access to the hidden riches of the Panguna mine and other mineral resources across the islands.

It has prompted some observers to wonder if these new mining players in Australia and China are fully aware of the history of mining and conflict here, as they try to cash in at this sensitive moment when Bougainville is on the cusp of nationhood and trying to forge unity among its people.

Recent reconciliation ceremonies between the PNG military and Bougainville militants declared there will be “no more war”. Now, as polling day nears, Bougainvilleans look set to accomplish something Francis Ona told me during the war he wanted.

“We have been ruled by four colonial masters over the past 100 years: first the Germans, then the Australians, then the Japanese, the Australians again, then PNG.

“We believe it is time we ruled ourselves now.”

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Australian power stations among world’s worst for toxic air pollution

The Yallourn power station in Victoria’s Latrobe Valley, which along with Loy Yang A and Loy Yang B power stations, produced 151 kilotonnes of sulphur dioxide emissions in 2018 and covers a population of more than 470,000 people. Photograph: David Crosling/AAP

Coal-fired stations in Victoria’s Latrobe Valley and NSW’s Lake Macquarie region among biggest hotspots for deadly sulphur dioxide, report finds

Lisa Cox | The Guardian | 19 August 2019

Power stations in Victoria’s Latrobe Valley and New South Wales’s Lake Macquarie region have been named on a list of the world’s biggest hotspots for toxic air pollution.

A new report by Greenpeace, published on Monday, used satellite data published by Nasa to analyse the world’s worst sources of sulphur dioxide (SO2) pollution, an irritant gas known to affect human health and one of the main pollutants contributing to deaths from air pollution worldwide.

The greatest source of SO2 in the atmosphere is the burning of fossil fuels in power stations and other industrial facilities.

Australia ranks 12th on a list of the top-emitting countries for human-caused sulphur dioxide emissions and is singled out in the report for air pollution standards that allow power stations to emit sulphur dioxide at higher rates than in China and the EU.

It comes as state and federal environment ministers are reviewing Australia’s air pollution standards for sulphur dioxide, now 11 times higher than what is recommended by the World Health Organisation.

India, China and Russia rank first, second and third respectively in the Greenpeace report for emissions of SO2 in 2018.

The report also ranks the worst individual sources of toxic emissions, with two locations in Australia appearing in the top 50, and a further two inside the top 100.

The biggest source of SO2 pollution in Australia is a complex of mining operations with copper, lead and zinc smelters in Mount Isa in Queensland. This site ranked 32nd in the report, producing 207 kilotonnes of sulphur dioxide emissions in 2018, according to the analysis.

The Yallourn, Loy Yang A and Loy Yang B power stations in Victoria’s Latrobe Valley ranked 49th at 151 kilotonnes.

The Vales Point and Eraring coal-fired power stations in the Lake Macquarie region of NSW ranked 79th, and the Liddell and Bayswater power stations near Muswellbrook in the Hunter Valley 91st.

The Victorian SO2 air pollution hotspot covers a population of more than 470,000 people, and the NSW hotspot covers an area of more than 1.7 million people, but Greenpeace said the the impacts from secondary pollution covered a far greater population.

In Sydney alone, more than 100 premature deaths a year are thought to be caused by pollution from coal-fired power stations. Nationally it’s more than 4,000.

“Australian coal-burning power stations are polluting at levels that would be illegal in China and most other parts of the world,” said Jonathan Moylan, a campaigner with Greenpeace Australia Pacific.

“Air pollution is the price our communities pay for the federal government’s failure to stand up to big polluters. It’s time for state environment ministers to show leadership by championing health-based sulphur and nitrogen dioxide standards, strong pollution limits for industry and speeding up the switch to clean renewable energy.”

Sulphur dioxide can cause health problems including heart and lung disease, and asthma.

Ben Ewald, a doctor with Doctors for the Environment Australia, said there were places in Australia that had “a serious SO2 problem” and limits were set well above what was needed to protect human health. He said the same was the case for nitrogen dioxide, another airborne pollutant.

“These pollutants can cause childhood asthma, lung disease, cancer, birth defects and reproductive issues,” he said. “Australian governments must introduce tougher standards to protect community health.”

Environmental Justice Australia has been pushing for tougher air pollution standards across the country. EJA is representing the Nature Conservation Council in a legal challenge to the NSW Environmental Protection Authority’s decision not to vary the pollution licences of the Mount Piper, Vales Point and Eraring power stations.

EJA is also calling for Victoria’s Environment Protection Authority to finalise a long-running review of the pollution licences for the Latrobe power stations and set tougher limits.

“Although power stations obviously have [existing] limits on their licences, those limits are so lax that power stations essentially pollute as much as they want,” said Nicola Rivers, EJA’s director of advocacy and research.

“It’s pretty extraordinary to see the Latrobe Valley in that list of highest-polluting hotspots in the world.”

A spokesman for the Victorian EPA said it had considered 477 submissions to its review of the three licences in the Latrobe Valley and was drafting its assessment and amendments to the licences.

He said the EPA had also designed an air-monitoring network with the Latrobe Valley community “because we value their involvement, knowledge and concerns”.

“Victoria’s air quality is considered good by world standards but scientific knowledge on the impacts of air pollution on public and environmental health is continually growing and EPA is keen for this to be reflected in industry standards and requirements,” he said.

The spokesman said Victoria’s EPA was also leading the national review under way for nitrogen dioxide and sulphur dioxide under the national environment protection (ambient air quality) measure and it was likely this would lead to stricter national standards.

There have been 17,000 public submissions to the review.

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Australia to be sued over mining project’s ‘unmerciful’ destruction of Indigenous land

Galarrwuy Yunupingu, who is launching legal action against the commonwealth, says Nabalco and its successor, Rio Tinto, failed to ask the local people where they could and couldn’t go on the Gove peninsula. Photograph: Peter Eve/AAP

Galarrwuy Yunupingu taking legal action for loss of native title as well as destruction of dreaming sites

Helen Davidson | The Guardian | 4 August 2019

The federal government is facing a lawsuit over damage done to Indigenous land by the decades-old mining project that sparked the Yirrkala Bark Petitions.

Gumatj leader Galarrwuy Yunupingu revealed on Saturday that he and his people were taking legal action against the commonwealth, seeking compensation for the loss of native title over the minerals exploited by mine operator Nabalco and its successor, Rio Tinto, as well as the destruction of key dreaming sites.

The suit is expected to use the historic precedent set by the Timber Creek judgment by the high court in March, which ruled on monetary compensation for loss of native title.

“They’ve come to Gove peninsula without asking properly of the landowners of the place,” Yunupingu told the crowd at Garma festival, in north-east Arnhem Land.

“They have all come, getting the OK from the PM and the government of the country, to come all the way and start digging and insulting the country.”

He accused the two companies of having “ripped some land unmercifully”.

“They have damaged our country without seeking advice to us and they have damaged a lot of dreamings – dreamings that were important to Aboriginal people.”

He said the companies failed to ask the local people where they could and couldn’t go on the Gove peninsula in north-east Arnhem Land.

Traditional owners have received royalties from the mine, a fraction of the total revenue drawn from the site. They have recently opened their own mine and training centre, Gulkula Mining, of which Yunupingu is chair.

Prospecting for what would become the bauxite mine and refinery began in the 1950s, and Yolngu traditional owners were strongly opposed.

Leases were granted and excised without consultation of the people of Yirrkala, and the now historic Yirrkala bark petitions were delivered to the federal government in 1963. Yunupingu, whose father was then Gumatj clan leader, helped draft the petitions.

However, the mine went ahead, with the Gove agreement signed five years later between the commonwealth and Nabalco.

Traditional owners took the mine to court in 1971, the first ever native title litigation, but lost, with the judge citing the doctrine of terra nullius in his judgement.

The loss sparked the establishment of the Woodward royal commission, and NT land rights act.

The case flagged by Yunupingu on Saturday will rest on the precedent set by this year’s Timber Creek decision from the high court, which awarded more than $2.5m in compensation to native title holders over dozens of acts by the NT government between 1980 and 1996 which were later found to have “impaired or extinguished” native title rights and interests.

More than half the amount was to compensate for “cultural loss”.

The March judgment reduced the amount ordered by the federal court in 2016 but otherwise held up the new precedent of quantifying the monetary value of native title and associated compensation for the removal of land rights.

Native title experts responded to the ruling with predictions it would pave the way for potentially billions of dollars in liability payments by Australian governments.

The attorney general, Christian Porter, said on Sunday: “There is a well established process for native title claims and those processes would be followed for any such claim lodged regarding bauxite mining.

“I note that at this point what has been said is an intention to lodge a claim and that a claim has not yet been lodged.”

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No Export Permit Yet For SI Miner 

Solomon Star | 11 July 2019

TWO leading landowners of Axiom Mining Limited’s mining lease site on San Jorge in Isabel Province, Sam Pitu and Janet Voda, have questioned why the government keeps refusing to grant an export permit to the Australian mining company to ship out its nickel ore products to its United States-based buyer Traxys.

In a joint statement, Pitu and Voda said the repeated refusal by the Minerals Board has become more and more intolerable to landowners as it denies them their rights to enjoy benefits from the exportation of nickel ore extracted from their land,” Pitu said on Wednesday.

“The continued delays and denial of an export permit for Axiom by the Minerals Board also denies us of our rights to benefit from revenues that would have come from the exportation of nickel ore from our land,” he added

“The action by the Board is indeed mind-boggling because Axiom has fully complied with the relevant mining laws and regulations of the country in its operation on San Jorge and with good mining practices and yet its export permit application continues to be rejected whilst giving some unscrupulous Chinese companies the go-ahead to mine in the country and export their products.

“Just look at the case of the controversial Bintan mining company which continues to mine bauxite from Renell despite its perceived non-compliance with the country’s mining laws and regulations. 

“In February this year, the company caused an environmental disaster because of its reckless decision to allow its cargo carrier to load bauxite in cyclonic weather.

“And last week, just six months on from the oil spill, the company ran into another disaster when its bauxite carrier barge capsized during a loading operation releasing 5,000 tonnes of ore into the waters of Kangava Bay.”

Pitu added: “Bintan’s continued operation in Rennell despite the two environmental disasters it caused through reckless decisions brings into question why the government continues to entertain such companies in the country and denies genuine investors of the legislative support they need to carry on with their operations.”

Adding on to Pitu’s sentiments, Voda said the government needs to exercise fairness in its dealing with foreign investors and to deal with them within the bounds of Solomon Islands laws.

She said the bribery claims made against Bintan in the media should be matters of serious concern to Solomon Islanders because it somehow implies that the company could be bribing government officials to go ahead with its operation despite its non-compliance with the country’s mining and environmental laws and good mining practices.

Bintan yesterday issued a statement denying the bribery claim.

Voda said the government’s delay in granting an export permit to Axiom when it has granted the company with a mining lease is totally nonsensical because a mining company cannot extract minerals without having to export them.

She said the landowners need money to improve their welfare, Isabel Provincial Government needs money to provide services to the people of the province and Solomon Islands needs money to improve its economic base and yet the national government has deliberately ignored the millions of dollars stockpiled on San Jorge in the form of nickel ore awaiting a government permit to be exported.

Comments are being sought from the mining board.

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Mining Hopes for Independence

An aerial view of the Panguna mine located in the autonomous region of Bougainville on July 20, 2015, in Papua New Guinea.(USGS/NASA LANDSAT/GETTY IMAGES)

A copper quarry helps fuel Bougainville’s hopes for separation from Papua New Guinea, a move that would resonate across the Pacific.

By Geoff Hiscock | U.S. News | July 1, 2019

THE Pacific island of Bougainville is moving a step closer to potential independence from Papua New Guinea as preparations begin for a long-promised referendum later this year.

Whether it can survive as a stand-alone nation is a key question for its 250,000 inhabitants, and for other separatist movements in the Pacific. The future course of the island could ripple across the region, as the question of Bougainville’s independence will touch on a complicated mixture of business concerns, environmental worries and geopolitical interests stretching from Australia and New Zealand to ChinaJapan and the United States.

It’s an outsized international role for Bougainville, which lies 900 kilometers (560 miles) east of the Papua New Guinea mainland. The roots of the referendum stem from a bitter inter-clan and separatist conflict that ran from 1988 to 1997, fighting that claimed between 10,000 and 20,000 lives through a combination of violence, disease, poverty and dislocation.

A truce brokered and maintained by regional neighbors that included Australia, New Zealand and Fiji helped restore order, and a comprehensive peace agreement was signed between Papua New Guinea and Bougainville in 2001. The island has had its own autonomous government since 2005.

Bougainville’s people are expected to vote decisively for independence in the Oct. 17 referendum, according to Jonathan Pryke, Pacific Islands program director at the Lowy Institute, a Sydney-based policy think tank. The vote is not binding and any move toward independence will require agreement from the central government of Papua New Guinea, commonly referred to as PNG.

Most people hope the two sides can find a “Melanesian solution” that will deliver a workable form of autonomy for Bougainville, says Pryke, using the term that describes the region of the South Pacific that includes PNG, Fiji, the Solomon Islands and other island nations and territories.

James Marape, who took over as Papua New Guinea’s prime minister in late May, said on June 14 he would prefer Bougainville to remain part of a unified nation, but would listen to the people’s voice and then consult over future options.

Papua New Guinea’s new prime minister, James Marape, arrives at the house of Governor-General Bob Dadae to be sworn in as the new leader in Port Moresby on May 30, 2019.(GORETHY KENNETH/AFP/GETTY IMAGES)

Peter Jennings, executive director of the Australian Strategic Policy Institute in Sydney, says the desire for independence in Bougainville remains strong, but from a regional perspective it will be best if the Bougainville people decided to stay in Papua New Guinea. “We don’t need another microstate emerging in the Pacific.”

Australian Foreign Minister Marise Payne, who visited Bougainville on June 19 with PNG’s new minister for Bougainville Affairs, Sir Puka Temu, said Australia will work to ensure the integrity of the referendum and will not pass judgment on the result. Australia is by far the biggest aid donor in the Pacific region, giving $6.5 billion between 2011 and 2017, according to research last year by the Lowy Institute. Most of Australia’s aid goes to Papua New Guinea.

Scars Remain From a Civil War

The Bougainville conflict, in which rival clans on the island fought among themselves and with the Papua New Guinea Defence Force, evolved from multiple issues, including land rights, customary ownership, “outsider” interference and migration, mineral resource exploitation, and perceived inequities and environmental damage associated with the rich Panguna copper mine.

Under the terms of the 2001 peace agreement, a vote on independence within 20 years was promised.

A reconciliation ceremony will be held on July 2 between the central PNG government, the national defence force, the Autonomous Bougainville Government and the Bougainville Revolutionary Army.

Deep scars remain from the conflict, both physical and emotional. Much of the island’s public infrastructure remains in poor shape, educational opportunities are limited, and corruption is pervasive. Clan rivalry and suspicion persists, particularly in regard to land rights and resource development.

Since Panguna closed in May 1989, Bougainville’s people have led a life built around agriculture and fishing. The cocoa and copra industries ravaged by the war have been re-established, there is small-scale gold mining, and potential for hydroelectric power and a revived forestry industry. For now, a lack of accommodation inhibits tourism.

Copper Mine Underscores Doubts over Bougainville’s Economic Viability

Almost 40 years ago, Bougainville’s Panguna mine was the biggest contributor to Papua New Guinea’s export income and the largest open-cut in the world. But the mine, operated by BCL, a subsidiary of Conzinc Riotinto Australia (now Rio Tinto Ltd.), became a focal point for conflict over pollution, migrant workers, resource ownership and revenue sharing, and has been dormant since 1989.

Apart from any foreign aid it may receive, Bougainville’s future prosperity may well depend on whether it can restart the mine, which contains copper and gold worth an estimated $50 billion. But customary ownership claims – land used for generations by local communities without the need for legal title – remain unresolved and at least three mining groups are in contention, which means an early restart is unlikely. Jennings cautions against investing too much hope in Panguna, with remediation costs after 30 years of disuse likely to be high.

Likewise, Luke Fletcher, executive director of the Sydney-based Jubilee Australia Research Centre, which studies the social and environmental impacts of resources projects on Pacific communities, says reopening Panguna would be a long, expensive and difficult proposition. He says the challenge for any mine operator would be developing a project that is environmentally safe, yet still deliver an acceptable return to shareholders and to the government.

Bougainville’s leader, President John Momis, believes that large-scale mining offers the best chance for income generation and is keen both to revive Panguna and encourage other projects. That would require outside investment, which was a factor contributing to the outbreak of violence in the late 1980s. The local community perceived that it was not getting its fair share of Panguna’s wealth.

Rio Tinto gave up its share in BCL in 2016, and ownership now rests with the government of PNG and the Bougainville government, each with 36.4%. Independent shareholders own the remaining 27.2%.

At least two other groups are vying to operate Panguna. Sir Mel Togolo, the BCL chairman, told the company’s annual general meeting on May 2 that continued uncertainty about Panguna’s tenure remains a big challenge. “We will need to work cooperatively with all stakeholders to achieve our objective of bringing the Panguna mine back into production,” he said.

Regional, International Eyes on October Referendum

With doubts persisting about Bougainville’s economic viability if it cuts ties with the central government, the referendum outcome will be closely watched by other PNG provinces pushing for greater autonomy, such as East New Britain, New Ireland and Enga.

Across the region, some parts of neighboring Vanuatu and the Solomon Islands are agitating for their own separate identities. In the nearby French overseas territory of New Caledonia, voters rejected independence from France by a 56 percent to 44 percent margin in November 2018. European settlers were heavily in favor of staying part of France, while indigenous Kanak people overwhelmingly voted for independence.

At the international level, Australia will be keen to ensure that whatever the outcome of the Bougainville referendum, stability is maintained in Papua New Guinea, if only to counter China’s growing interest in offering aid and economic benefits as it builds a Pacific presence.

Along with Japan, New Zealand and the U.S., Australia has committed to a 10-year $1.7 billion electrification project in Papua New Guinea. Australia and the U.S. have agreed to help Papua New Guinea redevelop its Manus Island naval base, which sits 350 kilometers north of the mainland and commands key trade routes into the Pacific.

Jennings says Australia would be likely to give aid to an independent Bougainville to try to keep China at bay. “China is everywhere. Its destructive connections co-opt leaderships in a way that doesn’t work out well for people.”

From a strategic perspective, Jennings says it would be best if Melanesia looked to Australia as its main partner on matters of security.

While China gives most of its aid to PNG and Fiji, the region’s two biggest economies, Jubilee’s Fletcher says China giving aid to an independent Bougainville was “feasible.”

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Geopacific stitches up Woodlark gold project in PNG

The colonisers eye up their pot of gold

Matt Birney | Company Advertorial | The West Australian | 26 June 2019

Geopacific Resources has acquired 100% direct ownership of the flagship Woodlark gold project in Papua New Guinea, buying out fellow Australian Kula Gold’s remaining share in a cash and scrip transaction worth about $3.29m.

Kula will immediately utilise the cash component to repay a loan totalling about $0.72m to Geopacific.

The deal seems like exquisite timing for the company, with the gold price nearly 25% higher than that assumed in November’s definitive feasibility study for Woodlark, which already outlined robust economic metrics and strong margins to develop the project.

Additionally, full ownership streamlines the corporate structure with significant administrative cost reductions and importantly reduces the risk to external financiers, willing to fund the project’s start-up.

Geopacific Managing Director Ron Heeks said: “Moving to 100% ownership of the 1.6Moz Woodlark gold project is a major milestone for the company. Full ownership simplifies project financing discussions and further enhances the company’s attractiveness and general market appeal … (with) additional benefits … (including) a substantial reduction in corporate costs.”

“The timing of the transaction coincides with the near completion of project finance due diligence and a strengthening gold price that is well above the DFS pricing assumption of AUD$1,650/oz. Progression in these work streams alongside the increasing gold price is a positive step in taking advantage of the increasing margin.”

The company is now racing down the final lap with baton in hand and is currently in the closing stages of an Independent Technical Experts, or “ITE”, review of the gold project, with representatives attending a site visit to Woodlark Island this week.

Back in January, the ITE review was commissioned by a consortium of banks and non-bank lenders, after an indicative non-binding term sheet was received.

Perth-based SRK Consulting was appointed as the lead ITE to review the technical aspects of the Woodlark project on behalf of the group of potential lenders.

SRK completed an initial Fatal Flaws Review late in 2018, with none being identified for the project.

With the gold price only strengthening since, the free cash flow position of the proposed initial 13-year mine life project has ballooned with Mr Heeks saying in January: “Every AUD$10 (per ounce) increase in the gold price is an additional ~AUD$10m in revenue which is considerable upside for the +1Moz project …”

November’s DFS study optimised the project at AUD$1,650 per ounce and produced a pre-tax free cash flow of $424m.

Geopacific recently received indicative costs to build the proposed gold processing plant on Woodlark Island from three international standard contractors.

The company said that an initial review of those costs showed that the pricing is in line with the DFS parameters completed last year by Lycopodium.

Total capital establishment costs for the Woodlark gold project come in at just under $200m, with a third of those monies required to construct the processing plant, which is very respectable considering the relatively isolated overseas location.

With respect to the near completion of the ITE review of Woodlark, Mr Heeks added: “The ITE review is progressing well and Geopacific is confident with the technical aspects of the DFS completed by industry-leaders Lycopodium, Mining Plus and MPR Geological.”

“The results from the initial ITE fatals flaws review (built) confidence in the Woodlark project in addition to the conservative approach undertaken in calculating the (mineral) resource. The resource estimate uses a fully diluted resource model with a significant dilution factor.”

“This provides additional comfort that mining at the estimated grade is achievable. The Woodlark deposit is a permitted project with robust economics that are improving with the current gold price ~AUD$350/oz higher than that used in DFS.”

Last month, the company appointed Ian Clyne as its new Chairman to actively drive financing arrangements for the gold project.

Mr Clyne has been part of the company’s board since 2016 and brings with him a wealth of corporate experience including most recently as Group CEO of Bank South Pacific Limited, based in PNG’s capital Port Moresby for five years.

It was a strategic move for Geopacific, with Mr Clyne being a strong advocate for PNG’s potential and its people and holding a high level of commitment to social and community issues within the mainly rural population of the developing country.

Commenting at the time, Mr Clyne said: “As the Chairman of Geopacific, my priority is to drive the Woodlark gold project towards a successful project finance outcome that will maximise shareholder and stakeholder value and returns.”

“Woodlark Island is one of the most prospective regions of PNG and we take great pride in our positive relationships with the local community, the National & Provincial Governments, and the regulatory authorities who have also demonstrated strong levels of support for the permitted … project.”

The Woodlark project holds an ore reserve of nearly 29 million tonnes grading 1.12g/t gold for 1.04 million ounces, contained within a broader JORC-compliant mineral resource estimated at 1.57 million gold ounces.

This gold resource is also likely to build over time as the project has extensive gold and copper exploration potential, in a region where Geopacific holds the dominant land position on the 912 square kilometre area of Woodlark Island.

Once in production, the company will likely be able to self-fund and potentially sustain its mining operations at the Woodlark gold project to beyond the initial 13-year mine life.

The project area is blessed with flat terrain and soft outcropping ores with average metallurgical gold recoveries exceeding 90% during the first five years of production.

All permitting is granted and the project enjoys strong community support in the proven mining investment hub of PNG.

With full ownership of the exciting project within its grasp, the gold price behaving itself and a new Chairman at the helm, Geopacific now has clear air ahead towards the construction, development and ultimately gold production at the impressive and undervalued Woodlark project.

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Bougainville: Australia positions itself as chief new coloniser ahead of referendum

The controversial Panguna mine which land holders are fighting to stop being re-opened for foreign profiteers.

Susan Price | Green Left Weekly | June 14, 2019

A spokesperson for the Bougainville Hardliners Group has called on the Autonomous Bougainville Government (ABG) to explain why the Australian Federal Police (AFP) were at the controversial Panguna mine site in central Bougainville on June 5.

AFP officers were seen taking GPS readings at the abandoned copper mine site. James Onartoo, a former leader of the Bougainville Revolutionary Army, said the community has a right to know why they were there and what they were doing.

“I think the public is owed an explanation as to what is happening,” said Onartoo. “To the best of my knowledge the AFP were ousted in 2007 on suspicion of spying on the ABG and the people of Bougainville by the former President, late Joseph Kabui.”

He suggested that their presence could be linked to the mine’s controversial reopening.

“Their presence at Panguna, which is the site of so much controversy and disagreements plus issues of sensitive nature stemming from proposed reopening by ABG, raises serious questions considering the fact that, in the past, Australia has always supported military intervention by the Papua New Guinea Defence Force to regain control of the mine.”

Onartoo said if the AFP can raid the ABC, “they are capable of anything”, including gathering intelligence “for the purpose of regaining control of Panguna and restarting the mine with use of force”.

The June 11 ABC Radio Pacific Beat said the AFP confirmed that members from the Papua New Guinea-Australia Policing Partnership did visit the site to “undertake an assessment of capability development for support to the Bougainville Police Service”.

Onartoo said Australia’s interest in the mineral deposits at Panguna has never declined. He has criticised Australia’s advice that the ABG prioritise mining over agriculture, tourism, fishing and other sustainable industries.

Several companies, including of Australian origin, are vying to reopen the Panguna mine, which was shut down in 1990 after a brutal battle against mostly indigenous landholders who received none of the huge profits generated by the mine. More than 20,000 people were killed during the 10 year civil war.

The Bougainville Hardliners Group has been actively resisting attempts by the ABG to weaken the Mining Act to give foreign companies exclusive rights to large-scale mining. It opposes further large-scale mining in the autonomous Papua New Guinea region, saying the focus should be on sustainable alluvial mining.

Bougainville is scheduled to hold its independence referendum in October under the terms of the 2001 peace agreement. The referendum outcome then has to be ratified by the PNG parliament.

The ABG has expressed its desire to reopen the Panguna mine.

Legislation to amend the Mining Act is currently being debated in the PNG parliament. According to landowners, the proposed amendments would effectively remove customary ownership of minerals and remove landowners’ veto rights over mining projects.

Onartoo has said that Bougainville’s 350,000 people do not need large-scale mining, and that the changes being proposed are in breach of sections 23 and 24 of Bougainville’s constitution as well as the Mining Act which provides protection from a repeat of “the ownership of minerals on the island by colonisers”.

A report by Papua New Guinea Mine Watch in January said Australian businessperson Jeffrey McGlinn of Caballus Mining is pushing for the act to be amended. A Radio New Zealand report said McGlinn “wanted to shortcut a number of what it calls complicated requirements in the act to fast track vital infrastructure development in Bougainville and boost employment ahead of the referendum”.

However, other reports suggest that he is more focussed on seizing control of major mineral deposits across Bougainville ahead of the referendum.

The Osikaiyang Landowners group has referred the government’s mining plans to the Papua New Guinea Ombudsman.

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Filed under Australia, Bougainville, Financial returns, Human rights