Tag Archives: Human rights

Gold mine protester tried for spreading communism as red scare sweeps Indonesia

Indonesian Muslims shout slogans during a rally against communism outside the Parliament in Jakarta on September 29. Photo: AP

Jewel Topsfield & Amilia Rosa | Sydney Morning Herald | October 12, 2017

An anti-gold mine protester has become the latest person to be tried under draconian anti-communist laws in Indonesia.

The case comes as the spectre of a resurgent red peril has once again inflamed the country more than 50 years after the leftist movement was brutally crushed.

In circumstances that local media have described as reminiscent of Suharto’s authoritarian New Order regime, Heri Budiawan could face up to 12 years in jail for spreading communism.

Prosecutor Budhi Cahyono said banners made by protesters against a gold mine in Banyuwangi in East Java on April 4 contained a hammer and sickle drawing in red spray paint like that used by the defunct Indonesian Communist Party, the PKI.

Accused of spreading communism: Heri Budiawan. Photo: Amilia Rosa

“The defendant led the activities of the people protesting and did not stop or prevent the placement of the banner with the hammer and sickle symbol identical to the PKI symbol, knowing that communism is forbidden in Indonesia,” Mr Budhi said in the indictment in the Banyuwangi District Court.

“The defendant’s act was against the law … in regards to crimes against the security of the nation.”

But environmental groups claim the gold mine, PT Bumi Suksesindo, is using the communism allegations as a tactic to shut down protests against alleged environmental damage caused by the mine.

The man who filed the complaint to police about the alleged hammer and sickle image in April was the then senior manager of external affairs at the gold mine.

Supporters of Heri Budiawan outside the Banyuwangi District Court. Photo: Supplied

Mr Heri strenuously denied the allegations. “None of the banners we did had hammer and sickle drawings on them,” he told Fairfax Media.

Mr Heri claimed there was no way he would invoke the former communist party in his fight against the gold mine.

Thousands of Muslims staged a rally in the Indonesian capital, protesting the government decree to ban radical organisations and against the alleged revival of communism.  Photo: AP

“I am against the PKI, I don’t want it in Indonesia either. If there was an anti-PKI rally I would join it.”

A surge in anti-communist sentiment and paranoia about the resurgence of the PKI swept Indonesia in the lead up to the 52nd anniversary of the murder of six army generals on September 30.

The PKI was blamed for the aborted coup, which triggered the purge of between 500,000 and one million people with suspected leftist leanings in a dark chapter of Indonesian history that remains deeply sensitive.

Last month police were forced to fire tear gas and water cannons to disperse anti-communist protesters who falsely claimed an event at the Jakarta Legal Aid Institute Foundation was a meeting of communist supporters.

Military chief General Gatot Nurmantyo ordered screenings of the 1984 propaganda film Pengkhianatan G30S/PKI (Betrayal of the Communists), a blood thirsty depiction of the death of the generals at the hands of the communists.

Even Indonesian President Joko Widodo – who was targeted by a smear campaign falsely claiming he was the son of communists during the last election campaign – tweeted on October 1: “Don’t let the cruelty of the PKI reoccur.”

“Although the PKI was violently obliterated in the mid-60s and communism is a dead letter globally which has no popular support in Indonesia, it is alive and well as Indonesia’s number one bogeyman,” Dr Tim Lindsey, the Director of the Centre for Indonesian Law, Islam and Society at Melbourne University wrote recently.

“Communism remains the label of choice to smear progressive opponents.”

Mr Heri is convinced the case against him has been made up because of his fight against the gold mine, BT Bumi Suksesindo, which he claimed had destroyed the local forest and and was responsible for mud floods.

“It’s all made up. I know I am not guilty,” he told Fairfax Media. “I am not an activist, just a villager. The mine is destroying our livelihood.”

The mine could not be reached for comment.

The trial is continuing in the Banyuwangi District Court.

Fandi, from the Indonesian Forum for the Environment (WALHI) in East Java, said this was not the first time locals had been criminalised to stop the fight against the mine.

He said the PKI symbol might be ancient history but it was an effective weapon. “It is to divert attention from the issues with the mine,” Fandi told Fairfax Media. “The area was downgraded from protected forest to an industrial zone to allow the mine to operate on it.”

Australian National University Associate Professor Marcus Mietzner said that rather than an indication of hardening anti-communist stances in Banyuwangi, this appeared to be a convenient pretext for interests associated with a large corporation to support cases against those rejecting its projects.

“Some of the other events – especially the attack on the Jakarta Legal Aid Institute Foundation – are more closely related to the ideological and political dynamics ahead of 2019,” Dr Mietzner said.

“Obviously, the goal is to somehow associate Jokowi with communism – a move he has countered by portraying himself as being as staunchly anti-communist as his critics. As a result, pro-democracy and leftist NGOs are cornered from two fronts: the alliance of Islamist and pro-military forces on the one side, and the Jokowi government’s attempts to appear anti-communist on the other.”

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Grasberg mine’s riches still a distant glitter for Papuan communities

Panorama from high up at the Grasberg gold and copper mine in Indonesian Papua on the island of New Guinea. Photo by Richard Jones/flickr.

Hans Nicholas Jong | Mongabay | 13 October 2017

  • Through its local subsidiary, US-based Freeport-McMoRan operates the world’s largest and most profitable gold mine in Indonesia’s Papua province.
  • Changes to Indonesia’s mining laws earlier this year raised hopes that Papua’s indigenous people might finally get a stake in the mine.
  • With negotiations between the government and the company snagging on key issues, activists say these hopes may be premature.

High hopes that the world’s biggest gold mine will finally bring meaningful benefit to the community for which it has for decades been a source of contention have been deflated as negotiations hit a wall.

Freeport McMoRan Inc. (FCX) and the Indonesian government are currently hashing out the details of a long-term agreement for an extension of the company’s contract to operate the giant Grasberg gold and copper mine in Papua province, due to expire in 2021.

Freeport announced in August that it had agreed to divest a 51 percent stake in its Indonesian subsidiary, PT Freeport Indonesia (PTFI), in which it currently holds a 90.64 percent stake, following sustained pressure by the government to reform a mining sector long seen as not doing enough to benefit local communities or contribute to the national economy.

As part of broader changes to Indonesia’s mining law, the government has required that all mining firms build smelters in-country; convert their existing contracts into more flexible permits; and, for those with a foreign majority shareholder, divest a 51 percent stake in their operations to local partners within a decade of the mines coming into production.

Freeport’s announcement was cheered by Indonesians, many of whom believe the country has been getting the short end of the stick in its business dealings with foreign miners.

The indigenous inhabitants of Papua, in particular, welcomed the announcement, hoping the redrawn contract would finally address the impact of the company’s mining operations on the local community and improve their welfare.

But as negotiations between Freeport and the government stall over the terms of the divestment, the role Papuans will play in determining the future of the mining project is once again shrouded in uncertainty.

A map of the Grasberg mine in Papua. Image by AK Rockefeller/flickr.

Sharing the wealth

In 2016 alone, Freeport’s Indonesian operations generated $3.8 billion in revenue for the parent company. Yet despite having the world’s most profitable gold mine, Papua remains Indonesia’s poorest province, where 28 percent of the people live below the poverty line. It also has some of the worst infant mortality and literacy rates in Asia.

To ensure that some of the mine’s revenues trickle down to Papuans, Energy and Mineral Resources Minister Ignasius Jonan has said that up to 10 percent of PTFI’s shares should be reserved for the Papuan government and indigenous Papuan people.

But Freeport has balked at the details of the government’s plan to manage the divestment. In a letter dated Sept. 28, the company expressed strong disagreement with the valuation, timing and structure put forward by the government.

The government has proposed acquiring a majority stake in PTFI by the end of 2018, but Freeport wants the divestment to take place in stages over a period of several years. It also wants the first batch of shares to be offered publicly through the stock exchange, rather than allocated directly to the government.

The price is another sticking point. Last year Freeport offered to divest a 10.64 percent stake in PTFI for $1.7 billion, which would give a valuation of around $8.1 billion for a 51 percent stake. Jonan, however, has called for a much lower figure. Conflating FCX’s market capitalization on the New York Stock Exchange and its share of revenue from PTFI, the minister argues that the fair value for a 51 percent stake in the Indonesian operator should be $4 billion.

Any hopes for immediate benefits as a result of the divestment, particularly the promised 10 percent stake for Papuans, have diminished as a result of the impasse.

Maryati Abdullah, the national coordinator of mining sector watchdog Publish What You Pay Indonesia, said such disagreements should have been foreseen. “The contentions in the negotiation process were predictable. So any claims of victory after the divestment agreement [in August] were premature, given that there are still many details that haven’t been agreed upon,” she told Mongabay. “As long as there’s no written agreement, there’s a high chance that things could still change.”

A woman from the Korowai tribe, who live in southeastern West Papua in the Indonesian Province of Papua. Photo by Mari/flickr.

‘Our nature is damaged’

Community leaders in Papua argue they should be involved in the ongoing negotiations, regardless of whether Papuans get a share in PTFI.

A group representing various indigenous tribes affected by PTFI’s mining operation met with Jonan last month to discuss the issue.

“We hope we will be involved in the negotiation of the details of the agreement and that a good deal will be given be to the local people,” said Odizeus Beanal, a representative of the Amungme tribe, whose highland home is where Grasberg is located. “Our hope in the future is for an agreement to be reached for indigenous people.”

Also affected by PTFI’s operations are the Kamoro, a lowland people whose ancestral territory is the site of Freeport’s mining town of Timika. The Amungme and Kamoro have traditionally subsisted on sustainable agriculture, fishing and hunting. But the opening of the mine in 1967 disrupted their lives, stripping them of their rights to 100,000 hectares (247,100 acres) of their ancestral lands. They have been further displaced and marginalized by migrants from elsewhere across Indonesia drawn to the mining boomtown.

Indonesia’s National Commission on Human Rights (Komnas HAM), a state-funded body, said earlier this year that PTFI had never compensated the Amungme and the Kamoro as the original stewards of the land where it operates. It characterized Freeport’s concession as a land grab.

“The land that could be used to live on has been contaminated with chemicals,” Daniel Beanal, a Kamoro elder, told presidential staffers at a meeting earlier this year. “Our nature is damaged. The mountain is filled with holes. I’ve never received anything from Freeport.”

Beanal argued it would be best for PTFI to cease operations, a call echoed by another Kamoro elder, Nicolaus Kanunggok.

“Our aspiration is clear: to close and audit [PTFI] first. We’re not asking for a share, not even a single percent. Close the operation first, and then audit [them],” Kanunggok said.

The giant Grasberg open-pit copper and gold mine in Indonesian Papua on the island of New Guinea. US-based mining giant Freeport McMoRan, which operates the mine, was also granted an exemption from the 1999 Forestry Law. Photo by Alfindra Primaldhi/Wikimedia Commons

Audit findings

A recent report by Indonesia’s Supreme Audit Agency (BPK) identified a wide range of irregularities in PTFI’s operations and its current contract.

Eleven of the issues were attributed to weak management by the government, while 10 pointed to violations of regulations by PTFI. These include indications of reckless mining, and the dumping of mining waste into rivers, forests and the sea. An earlier review by the agency estimated the environmental damage from the company’s operations at 185 trillion rupiah ($13.7 billion).

PTFI spokesman Riza Pratama said the company manages its waste in accordance with the terms set out in the Environmental Impact Assessment (EIA) approved by the government in 1997. “We are operating in accordance with our mining contract and [mining waste processing and disposal] has been regulated in it,” he told Mongabay.

Noak Kapisa, the head of Papua’s environmental agency, said PTFI should pay for the environmental damage identified by the audit agency. “If the damage is done inside Freeport’s areas, then it has to fix it,” he told Mongabay. Kapisa also called on the government to revoke the company’s EIA, which is in the process of being renewed, if PTFI refuses to make amends for the environmental damage it has caused.

The BPK also found that Freeport had used 4,536 hectares (11,208 acres) of protected forest area without obtaining the proper permits, costing the government $20 million in lost fees between 2008 and 2015.

Riza declined to comment on this finding when asked by Mongabay.

View from the Grasberg open-pit copper and gold mine in Indonesian Papua on the island of New Guinea. Photo by Richard Jones/flickr.

Pitfalls and progress

As things stand, there is no guarantee of more environmentally sound mining operations once Freeport has relinquished a 51 percent stake in PTFI.

That’s because Freeport has insisted on retaining operational control of its subsidiary until 2041, even if the government holds the majority of PTFI shares. Should the miner get its way, Indonesia would have no leverage in the deal, according to PWYP Indonesia advocacy manager Aryanto Nugroho.

For instance, he argues, Freeport could refuse to pay dividends to the government by saying it needs the money to cover expenses like building a smelter, which it is required to do under the new mining law.

“Even if the government held the majority of shares, if FCX still retained operation control, what could we do? So there are traps like that,” Nugroho told Mongabay.

The government must ensure that Freeport pays all its obligations, including for environmental damage, before the divestment is done, says Henri Subagiyo, executive director of the Indonesian Center for Environmental Law (ICEL), an NGO.

“If the obligations are paid before the takeover, there won’t be many problems. But if the obligations [are held over until] after the takeover, then who would bear the burden?” Subagiyo told Mongabay. “If the government has the majority of shares, then the government would have the obligations [to pay for the damage]. If Papuans get a stake, they would bear the risk as well.”

Activists have urged the government to use the BPK’s findings as a basis in the negotiations with Freeport.

“These problems have to be probed further and discussed during the renegotiation process of Freeport’s mining contract,” said PWYP Indonesia’s Abdullah. “Environmental problems are no less important than other problems in the renegotiation, which are mainly financial, such as tax, divestment and the obligation to build smelters in Indonesia.”

President Joko Widodo has said the government is seeking a win-win solution as quickly as possible. But with neither side seeing eye to eye on the key issues, it remains unclear when the negotiations will conclude.

Additional reporting by Basten Gokkon.

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Phillip Miriori: Why Bougainvilleans are having their say – ‘No to BCL’

Bougainvilleans proudly display “No BCL Ever” T-shirts. Image: Me’ekamui

Phillip Miriori | Asia Pacific Report | 13 October 2017

As many would be aware, we Bougainvilleans have been through a tough history with the disasters that came from the past operations at Panguna, then owned by Bougainville Copper Limited (BCL).

One of the key issues that led to our civil war, when around 20,000 of our friends and family died, was the way we were treated by BCL then – entering our lands without consent, poisoning our gardens and lives, removing our mountains, inviting in the military and ignoring our views, without compensating us fairly.

Since the end of the conflict, BCL has made no effort to resolve the damage they caused to our people, lands and rivers – infact they deny any responsibility and are trying to tell us what to do again, calling us impediments when we do not agree with the rules they try and dictate.

Have they learned nothing or think we have forgotten?

We have fought hard to protect ourselves from the same thing happening again if Panguna re-opens, and the new Bougainville mining law transferred ownership of the minerals to the landowners. As a result, now nothing can happen to our minerals without our consent.

Our Special Mining Lease Osikaiyang Landowners Association (SMLOLA) members are now in a position to make BCL, the Autonomous Bougainville Government (ABG) and the world respect our views. One of the key steps in the process of late has been our efforts to protect ourselves from the attempt to force the return of BCL without our consent.

We have had to use the Courts to ensure we are listened too and the result has been a landmark mediation process, right here on our lands at Dapera led by Justice Kandakasi.

Mediation process

The mediation process was initiated by me to try and help resolve the challenge to my leadership of the SMLOLA by Mr Lawrence Daveona, despite the fact he is not following custom in recognising my leadership position, a position I was born into.

He also wants BCL to return despite everything they have done and failed to do, which is strongly opposed by the majority of our members, as demonstrated by the petition against the return of BCL which now stands at around 2000 members saying “No to BCL”.

The mediator has now given us one more opportunity to try and resolve this among our family which I am keen to do. I firmly believe we can all unite to protect our people against the return of BCL and I promise to make every effort to do that with Mr Daveona and the ABG.

I want to work with them to ensure any redevelopment of Panguna is done properly this time and our members are protected and looked after, respected and treated equally and fairly.

The primary objective of the mediation was to try and resolve the challenge to my rightful leadership of the SMLOLA by Mr Daveona, which I firmly believe is unlawful and will take to the courts again if necessary. I am making every effort to accommodate him as unity will have a very valuable benefit for all of us and the future of Bougainville.

One of the other valuable objectives that has come from the mediation and I have committed to work on, is to more closely align our association’s constitution with our Nasioi customs, moving key decisions back to our clan system that has been our way since time immemorial. I strongly support that and encourage everyone to participate as I believe it will assist in making any benefit sharing from a future mine fairer for all.

The mediation over the past few weeks, has also given our women, the owners of our land, the opportunity to stand up and be heard. Some of them are against mining and one of my important tasks will be to work with them further as I believe Independence for Bougainville is very important and mining, if done responsibly and with people who we can trust, who will show us respect and fairness, will enable us to get there quicker.

As part of that process, in my role as the chairman of the SMLOLA and an elder to our clans, I have worked hard to attract a reputable international mining company who has both the social and environmental track record to make sure this time the mine could be developed successfully, fully integrated into our local community.

Revolutionary law

From the time the new transitional mining law was passed in 2014, I worked closely with President Momis and both Mining Ministers, Michael Oni and Robin Wilson. In fact, on the day the law was passed I was invited to meet with President Momis at the ABG Parliament to celebrate the new revolutionary Bougainville Mining Act, which uniquely, gave ownership of the land and minerals, back to the landowners to try and repair some of the mistreatment of our people in the past.

They were then opposed to the return of BCL and supportive of our efforts right through until March this year when suddenly and inexplicably something changed. They would no longer engage with us, would not explain why and started a very public campaign supporting BCL and a challenge of my leadership by Mr Daveona.

I didn’t select RTG Mining Inc. lightly, even going to a mine their management developed in the Philippines with a group of both Panguna landowners and ABG Ministers to see how they do things. In fact, the three ABG Ministers that came to see the RTG operation in Philippines expressed support for RTG.

Over time we came to develop a trust with RTG’s management and believe they will make the redevelopment of Panguna a great success, working closely with our members. They have supported the hard work we have done over the last year to defend ourselves against the illegal return of BCL.

Misled through lies

It is disappointing that some try to mislead through lies. The suggestion that improper payments were made to ABG officials is both ridiculous and untrue. They are currently working against us and strongly pushing BCL and Lawrence, rather than being impartial which is all we ask of them.

Despite the current position of the ABG, we are confident that they will eventually hear our firm views – “No to BCL!” and we remain committed to working with them to find a solution where all will win, including the ABG. We must talk openly and respectfully to find a fair solution. The law and views must be respected and we will continue to fight for that for our members.

The mediation is not a forum to make a final call on who the developer should be and if the mine should be redeveloped, which must be done in conjunction with all our members, but it has been invaluable to be able to showcase the opportunities to highlight the issues and concerns with a possible return of BCL.

In fact, BCL and the ABG have publicly admitted they cannot develop the project themselves and would have to find a partner. Who will that be, why won’t they tell us? How can someone support them when we do not even know who the actual developer will be?

I hope that the discussions at the mediation will assist Mr Daveona to understand why our people would be better off without the return of BCL. And I will continue to work with him to try and reconcile our positions so we can stand united against them and get a far better result for our people, developing a model that is win-win for the people of Bougainville and the ABG.

Phillip Miriori is chairman of the Special Mining Lease Osikaiyang Landowners Association (SMLOLA), Me’ekamui Government of Unity and SMLOLA.

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ABG claims of financial independence if mine reopens ridiculed

Nasioi Writer responds to Member for Kokoda, Rodney Osioco’s claims the Bougainville government will be financially self reliant if BCL is allowed to reopen the Panguna mine.

Mr. Osioco I can probably forgive you for being so naive and sentimental. Where and when is this extractive industry madness going to end. Your little baby government cannot even account for funding it gets from National Government which ends up in your private accounts as we are being told. Is this how you are going to manage the millions you get from mining and pay tit bits to the landowners who to this day have never been compensated adequately for loss of everything from environment, rivers, and land which is the source of their livelihood?

We are fed up with ABG preaching that agriculture, tourism is not enough to run the economy of Bougainville. Coming from a government that is wasteful with buying fleets and of cars and staying at expensive hotels, I find this hard to believe.

I wonder how much these politicians carrying out awareness are being paid? Isn’t this work suppose to be given to others to do? Maski giaman nabaut kisim allowance na mekim awareness.

The introduction of mining into our midst is causing so much confusion and division among the people who should be united to vote in the forth coming referendum. ABG’s push for mining with BCL at it’s helm is now being challenged by another player RTG which supposedly has the cash and elaborate plans to deal with issues ahead. I don’t support mining in any form or shape because already these companies are sprinkling cash this way and that. This is where corruption takes root if is not already eating away at ABG.

Opposition to Mining is mounting and I think it is time Hon. Osioco and his colleagues started to look at alternatives otherwise we are going to face another catastrophe at the hands of mining companies.

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Barrick calls for collaboration with MPs on ‘grim challenges’

Post Courier | October 10, 2017

In the face of a number of grimchallenges, the Porgera Joint Venture (PJV) mining operator Barrick Niugini Limited (BNL) has now called for greater cooperation from Engan members of parliament towards the achievement of the provinces’ development agenda.
At a recent briefing session with Engan leaders in Port Moresby, BNL executive managing director, Richmond Fenn highlighted a number of challenges that were impeding the progress of the provincial development agenda, which included; illegal mining, the state of the highlands highway, law and order, resettlement and the Memorandum of Agreement (MOA) review.
Mr Fenn highlighted the management issues of the Porgera Development Authority (PDA), the Paiam Hospital and functions of the District Administration.
He also raised issues faced by the mine such as the proposed amendments to the Mining Act; the proposed amendment to the MRA Act and increasing the Tax Credit Scheme(TCS) rate.
“While some of the issues we can manage as a company, others are more complex and need considerable amounts of commitment from the government to make it work,” said Mr Fenn.
“The partnerships that we generate from these kinds of gatherings where we are required to work together on issues that affect us all, are of the utmost importance to us,’’ he said.
Engan governor Sir Peter Ipatas supported the call, adding that as a non-renewable venture, sufficient collaborative action needed to be taken to secure the future of Enga.
“We have to work to sustain Porgera to continue to provide services. The mine will come to an end.
In the future, the province will have to fall on its own economy,” said Sir Peter said.
“We have the right leadership and we have to incorporate our plans for development into the government agenda,” he said.
Sir Peter said the national government should consider funding arrangements for Enga’s special project plans, particularly through an increase in the TCS rate.
Given the mines history and contributions to the national economy for over 20 years.

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Fundraiser for Bougainvilleans for No Mining

Click on the link  to donate – www.gofundme.com/women-for-no-mining

The traditional owners of Panguna who are women staged a protest and road block to Panguna on the 15th and 16th of June 2017, preventing the President of the Autonomous Government of Bougainville, John Momis and his delegates access to Panguna. The women wanted to send a clear message to the Transitional Government that there is no MINING until after independence and if there is miming it is under the terms of the custodians of  traditional owners and general consensus of the people of Bougainville.

The purpose of  fundraising is to fund 4 smart phones so the women can use digital platforms like  social media to broadcast their protests to the global audience. 

At the moment they are collecting data in the form of petition.

Click on the link  to donate – www.gofundme.com/women-for-no-mining

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Plans to restart giant Bougainville mine stall as operating rights battle rages

Local residents holding banners and placards during a protest at the former Bougainville Copper Limited’s (BCL) Panguna mining operation located on the Pacific Ocean island of Bougainville, Papua New Guinea, May 3, 2017. Renzie Duncan

Jonathan Barrett | Reuters | 6 October, 2017 



Plans to reopen one of the world’s biggest copper mines, shut by a civil war on the Pacific Island of Bougainville in 1989, have run into trouble.

The quarter of a million people of Bougainville are tentatively scheduled to vote on independence from Papua New Guinea in June 2019, and revenue from the reopening of the Panguna mine is essential [?] for the otherwise impoverished island to have any chance of flourishing if it becomes the world’s newest nation.

But there is now a struggle over who will run the mine between Bougainville Copper Ltd – the previous operator now backed by the Autonomous Bougainville Government and the Papua New Guinea government – and a consortium of Australian investors supported by the head of the landowners who own the mineral rights.

The dispute is opening old wounds – and is almost certainly going to delay any reopening. That could help to drive copper prices higher as many forecasters expect that demand for the base metal will exceed supply in the next few years.
The battle lines have been hardening on several fronts, Reuters has learned.

Papua New Guinea has told airlines that Sydney businessman Ian de Renzie Duncan, who set up the consortium, is banned from entering the country until 2024, according to a Papua New Guinea government document reviewed by Reuters. The request for the ban was made by the Bougainville government, three sources with knowledge of the document said.

The consortium has also acknowledged for the first time that it is paying some landowners a monthly stipend and has pulled in some big backers that have not previously been disclosed. They include Richard Hains, part of a billionaire Australian race-horse owning family which runs hedge fund Portland House Group.

In a sign of how ugly the row is getting on the ground, local opponents of BCL becoming the operator – and some who are opposed to the mine reopening altogether – blocked Bougainville government officials from entering Panguna in June.

They had hoped to get key landowners to sign a memorandum of agreement that would have endorsed BCL as preferred developer, according to a copy of the document reviewed by Reuters. The proposed agreement also stipulated the mine would be re-opened by June 2019, ahead of BCL’s own timeframe of 2025-26.

The Papua New Guinea government didn’t respond to requests for comment for this story.

Bougainville’s main political leaders say getting the mine reopened is critical. “If the independence of the people is to be sustained then we need Panguna to run,” Bougainville Vice President and Mining Minister Raymond Masono told Reuters in a phone interview.

He said he believes BCL has first right of refusal to operate the mine under laws passed three years ago, and only if BCL declined to take up that right should an open tender take place.

DEEP RESENTMENT

The abandoned copper and gold mine contains one of the world’s largest copper deposits. During its 17-year life until the closure in 1989, Panguna was credited for generating almost one-half of Papua New Guinea’s gross domestic product.

The civil war was largely about how the profits from the mine should be shared, and about the environmental damage it had caused. There was deep resentment among the indigenous Bougainville people about the amount of the wealth that was going to Papua New Guinea and to the mine’s then operator, Conzinc Riotinto of Australia Ltd, a forerunner of Rio Tinto.

The mine was forced to shut after a campaign of sabotage by the rebel Bougainville Revolutionary Army.

The conflict between Bougainville’s rebel guerrilla army and Papua New Guinea forces left as many as 20,000 dead over the following decade, making it the biggest in the region known as Oceania since the Second World War.

Rio Tinto divested its stake in BCL in 2016, and the listed company is now just over one-third owned by the Bougainville government and one-third owned by Papua New Guinea. Papua New Guinea Prime Minister Peter O‘Neill said last year his government would gift the shares received from Rio, or 17.4 percent, to the people of Bougainville, although that is yet to take place.

“NEVER AGAIN”

The challenge from the Australian consortium that now includes listed gold and copper explorer RTG Mining was made public in June. Duncan and his fellow investors have joined forces with a group of Panguna landowners, the Special Mining Lease Osikaiyang Landowner Association (SMLOLA) led by Philip Miriori.

Miriori was in the Bougainville Revolutionary Army as the private secretary to the late Francis Ona, the former BCL mine surveyor who became leader of the resistance.

Ona had declared that BCL should “never again” be allowed to run the mine and Miriori, Ona’s brother-in-law, still supports that stance. “They have caused a lot of damage, they don’t have the money and they are not telling the truth and so I wouldn’t accept them,” Miriori said in a telephone interview from the Bougainville town of Arawa.

The consortium’s challenge is based on new mining laws introduced in 2014 that downgraded BCL’s mining rights to an exploration licence and gave landowners powerful rights over the minerals on their land to acknowledge the losses suffered by those in Panguna during the conflict.Miriori told Reuters that the government did not have authority over mine negotiations.

PAYOUTS TO LANDOWNERS

Duncan, a former barrister with a background in mining law, heads an entity called Central Exploration that has a half share of the consortium.

Duncan’s consortium has been paying money, described as a stipend, to some of the landowners, but denies this amounts to bribery.

“We are really talking about people receiving a couple of thousand kina ($608) a month,” said Duncan, who added that the money helps the landowners to travel and find accommodation in towns where Panguna negotiations take place. “It’s not bribery, it’s business,” he said.

BCL claims to have the support of eight other landowner groups in Bougainville with an interest in the project. They have land rights covering access roads and the port site, among other areas, though crucially not the mine site itself.

BCL chairman Robert Burns, who formerly worked for Rio Tinto, said Bougainvilleans were the ones being impacted by Duncan’s attempt to gain control of the mine.

“Everyone is being frustrated and impeded by this issue,” Burns told Reuters in a phone interview from the PNG capital, Port Morseby.

FINANCING DOUBTS

The uncertainty is going to make it difficult for either group to raise the capital that will be needed to get the mine restarted.

In 2012, BCL estimated the cost of re-opening at $5 billion. With few of its own assets, the company would need to secure the mining rights before tapping capital markets.

The Australian consortium may be in a stronger position, according to Hains, who is a 15 percent owner of RTG. He said the consortium has strong access to the North American capital markets and could re-develop Panguna in a “highly timely fashion”.

As it stands, BCL has no mine without the support of the owners of the minerals, and Duncan’s group has no project without road and port rights as well as government support.

Anthony Regan, a constitutional lawyer at the Australian National University and an adviser to the Bougainville government, said the immediate outlook for the mine is bleak. “The need of Bougainville to have a significant source of revenue if it’s to be really autonomous or independent has become hopelessly enmeshed with the future of Panguna.”

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