The abandoned Panguna copper mine. Credit: Sydney Morning Herald
‘The landowners have agreed because they want a better life and see this as the way forward.’
True or False?
Kevin McQuillan | Business Advantage | 8 Nov 2017
Two key events before year’s end are likely to decide the timeline for the rebuilding of the Panguna copper mine on Bougainville Island. The Chairman of Bougainville Copper Limited, Rob Burns, tells Business Advantage PNG two board appointments are part of the company’s strategic development.
The appointment of Bougainvillean and mining specialist, Mel Togolo, and OK Tedi Mining’s Managing Director, Peter Graham, to the board of Bougainville Copper Ltd (BCL) last month reflects the company’s desire for more Bougainville representation, and the need for strategic management expertise, according to BCL Chair, Rob Burns.
‘We’ve been talking to the Autonomous Bougainville Government (ABG) and are been keen to get Bougainville representation—so first and foremost that was our number one priority,’ Burns tells Business Advantage PNG.
‘We’d like to make more appointments and get greater representation from the Bougainville side.
‘We also wanted to bolster our project development capabilities.
‘Peter Graham’s knowledge of project development and project management is second to none in PNG.’
Two key events this month and next will determine the timeline for rebuilding the mine, which is estimated to cost US$4–6 billion, and could take up to 10 years.
The first is a third round of mediation talks on 23–24 November aimed at settling a dispute over the chairmanship of one of the nine landowner associations in the project area: the Special Mining Lease Osikaiyang Landowners Association (SMLOLA).
A dissident landowner, Philip Miriori is at the centre of the dispute, along with his cousin Lawrence Daveona. They both lay claim to the chairmanship.
The second event is wardens’ hearings on 11–12 December about the five-year renewal of the mining exploration lease, which is currently held by BCL. Under the Bougainville Mining Act 2015, the ABG needs to hold wardens’ hearings as part of the process for a five-year renewal of the lease. The wardens’ recommendation then goes to the Minister.
‘I’m optimistic it will be renewed. The landowners have agreed because they want a better life and see this as the way forward.’
Burns expects there will be fresh elections for the executive positions of the SMLOLA after this month’s mediation talks.
Miriori’s group opposes the involvement of BCL in the rebuilding and operation of the Panguna mine.
The group is backed by a small Perth-based company, RTG Mining.
‘Things are progressing but not as quickly as we would like, and not as quickly as the Bougainville people would like, with the court mediation process to settle the landowner dispute still to run its course,’ says Burns.
‘We want to get on with it, but we are respectful of the need to get landowner and community understanding of what the operation will look like and get their input into how it’s designed and what features it will have.
‘BCL has project knowledge and the intellectual property.’
‘If we get all that right to start with it’s going to make it a far more efficient and effective development process. We believe we’ve got good support.
‘We don’t want some individuals and other consortia continuing to thwart us so we’ll entertain anything. But there’s a thing called trust in all this and until they demonstrate they can be trusted you can’t have a relationship—a sustainable one.’
Burns is sceptical about the role of RTG Mining (which has not yet responded to Business Advantage PNG’s requests for an interview).
‘They’ve got their story and they’ve made representation to Philip Miriori and a presentation to the ABG.
‘That’s been rejected by the ABG, so I believe this is part of their business plan—to eke their way into the redevelopment of the Panguna mine.’
Burns says he believes BCL are ‘the rightful developers and have the community support to carry the development of the project.’
He argues that BCL has project knowledge and owns the intellectual property, which includes the geological database, where the ore is located and where the waste is.
‘If another party comes in, they’d have to commence a massive drilling program to ascertain basic details.’
Once the landowner dispute is settled and the lease is determined, Burns says BCL will work on getting more accurate assessments of capital requirements and operating costs.
BCL has US$50 million in liquid assets to do the social, technical, environmental and regulatory studies needed to prove the viability of the mine. That would lead to a full feasibility study, which might cost US$150 million.
‘There are people approaching us all the time about getting involved and how we might undertake that financing for the feasibility study, and for the major construction and rebuild that would follow.
‘We have a clean sheet of paper and that’s why I’m leaning on people like Peter Graham to assist us with strategic thinking.’