Tag Archives: Rio Tinto

Reopening Panguna is dividing families and communities

Mine Pit looking greener – let it be green

Clive Porabou | Mekamui News | 28 August 2017

The Panguna mine issue is the hottest and very sensitive issue on the ground today. It is dividing communities and families up. BCL is so crazy to reopen it using every possible avenue it can to get people on their side. In the meantime ABG is desperate to have money to run the Government of the day in Bougainville and also pushing for the reopening.

The former BRA ranks and files are also divided, last week another MOU was not signed when the Bougainville Hardliners say no to reopening but yes to keep it closed.

Strong woman against mining says no to mining

Last week I was in Arawa and late Francis Ona’s brother came to me and told me that his sister Joanne whom I have been campaigning with against re-opening the mine is on the side of reopening the mine. He told me they must have given her money to change her mind. He says our family is now dividend. Later he and his elder sister came to me and gave me her mobile number.

Joanne on the left now becomes pro mining before when we campaign against mining

They told me to try and talk with her so that she can change her mind. I didn’t call her for a reason if they gave her money she might say to me we campaign with no money now I have money so if I join you on no mining will you give me money. Hope she will change her mind and save the last Guava Mountain to plant sweet taro for tamatama.

Some mothers who are against reopening the mine

A young woman, I interviewed her at the mine site, told me that they don’t want the mine reopen it will be so much pain and suffering more then the last time. I asked her the alluvial gold panning is also causing some kind of danger. She told me it is small and the people are getting more money from it then what the company can give them. She told the ABG Government can come in to help the gold diggers set up some kind of melt and essay laboratory so that the Gold diggers will not us dangerous chemicals etc etc

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Wars of words over Panguna as Bougainville moves to new era

Leonard Fong Roka | PNG Attitude | 26 August 2017

With Bougainville less than a year away from a referendum on its political future, the Autonomous Bougainville Government (ABG) and a local Panguna group known as the Meekamui Government of Unity are in a war of words over the re-opening of the Panguna copper and gold mine.

The ABG wants the now reformed Bougainville Copper Limited (BCL) to operate the mine which it believes will finance the redevelopment of Bougainville.

But the Meekamui and the Osikaiyang Landowners Association are keen to see the mine opened by an Australian company they have aligned with called RTG.

Bougainville’s president John Momis has said the ABG will not allow a company with no track record to mine at Panguna.

The quarrel between the ABG and the Meekamui is potentially divisive and may affect peace-building efforts in the autonomous province.

BCL, through the Panguna Negotiation Office, is said to be funding a group calling itself Panguna New Generation Leaders which is aggressively pushing for the re-opening of the mine.

The Meekamui and its overseas backers are taking a more moderate stance but are determined to get RTG to develop the mine.

After a 10-year civil war, the signing of the Bougainville Peace Agreement in 2001 addressed the political problem but did not provide a settlement to cater for the Panguna problem which is still shimmering around us.

Meanwhile the 1980s vintage old landowners associations and the new landowners association are also still verbally brawling and attacking each other.

As this struggle goes on, we, the innocent people of Panguna, are being blamed by other Bougainvilleans of working to re-open Panguna.

On the BCL side we see no change of heart for the interests of the people of Bougainville who have suffered because of them and the PNG state.

Rio Tinto offloaded its shares to PNG and Bougainville so that we could see that it was changing its mind on the future of Panguna. But can we be sure? We need to watch to see if various personalities move to and fro between positions in BCL and Rio Tinto.

Let us hope we are not submerging into the violence of the 1990s even as we try to work through the peace agreement and move to the new dawn that next year’s referendum should represent.

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Bougainville Copper: will it get to play again?

Rivers and streams in the mine’s vicinity remain polluted and unusable as sources of freshwater or fish. Photo by Catherine Wilson.

MAC [Mines and Communities] | Nostromo Research18 July 2017 

Odds seem loaded against recent moves

When the great – no doubt sometimes also good, but frequently woefully ignorant – among mining outfits (and their desk-bound investment advisors) look at a risk-laden, problematic, prospect like Bougainville Copper Ltd’s Panguna mine, any upturn in commodity markets are apt to be heralded as a golden opportunity.

And also give a boost to the fortunes of the existing incumbent company BCL, however dubious its ownership claims may be.

Two such “experts” – Greg Evans of KPMG and Satish Chand, a professor of finance based at Australia’s Defence Academy (sic) – acknowledge some of the risks involved in finding a major player to bankroll restart of the Panguna mine, estimated by BCL itself to cost around US£5 billion.

But they appear to have little understanding of the increased financial burdens that will be incurred, not least in compensating a fully-independent Bougainville for the vast damages caused by former lease owner Rio Tinto, as well as the strong likelihood of local bitter opposition – especially by women – to the mine’s re-opening (see article below).

These risks were clearly set out in a paper published by Nostromo Research and geophysicist Dr. Mark Muller at the end of 2015. It asserted that, inter alia:

  • A new mine is at least five – possibly ten years – away from any profitable production;
  • Judging by the amounts and grades of copper and gold in the existing Panguna mine lease area, any company re-opening the mine will struggle to compete against global competitors, and is likely to fail;
  • In order to attract mine development funds, BCL must acquire new prospecting ground outside the current licence area. It’s doubtful this would yield significant fresh economically-recoverable ore reserves;
  • Even if these were implemented, they would necessitate significant additional operating costs; and would materially increase threats to the integrity and health of landowners’ land and water;
  • It’s highly improbable that any [major] mining company – including Rio Tinto and Chinese ventures – would be seriously interested in re-opening Panguna (See: Would restarting Panguna contribute to Bougainville sustainable development?).

John Momis, head of Bougainville’s Autonomous Government, earlier seemed to accept such evidence, and dispute BCL’s right to resume mining (See: Has Bougainville president done a U-turn on Panguna?).

Alas – the lure of fresh money, however speculative, has proved  a powerful force in influencing the president to place his faith in “the devil we know”, rather than admit to the true nature and shameful history of that particular enterprise.

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Global mining major needed to re-open Bougainville’s Panguna copper mine?

Kevin McQuillan | Business Advantage PNG | 18 July 2017

Moves to re-open the Panguna copper mine on Bougainville are gathering momentum. Funding the re-opening is a key concern, however, says Bougainville President, John Momis. Could one of the global mining majors get involved?

Bougainville Copper Ltd (BCL) is currently advertising for a local Bougainville-based manager, and are looking at the payment of K14 million in rent and compensation that was owed to the 812 customary clan groups who own the blocks of land within the mining lease areas.

Autonomous Bougainville Government President John Momis tells Business Advantage PNG, that over the next year, he expects BCL to open an office and ‘start dealing with some of the legacy issues, demonstrating BCL’s commitment, in a just and fair way, to some of the real issues that have been bothering the land owners.’

That includes, he says, the ecological, environmental, and health damage issues caused by former owner, Rio Tinto.

‘They have walked away, so now BCL has to address that.’

Momis says the Joint Steering Committee preparing for the mine’s re-opening consists of representatives from the nine official landowner groups, BCL, the national government, and the ABG, and is to be chaired by an independent chairman.
Funding

A key challenge is the cost of reopening the mine; back in 2012, BCL estimated it would be US$5 billion.

‘BCL has to demonstrate to us they have ability to solicit funds and attract a developer and I’m sure they are thinking about this,’ says Momis, pointing out that under Bougainville’s 2014 Mining Act, BCL has first right of refusal about re-opening the mine.

‘The Panguna mine is a “high-risk, high-return” investment.’

‘We are giving BCL the opportunity to get funds and to meet the conditions as per the mining law. If they fail, then other companies will have to apply and be put through this process.’

Mining industry analysts describe the Panguna mine as a ‘high-risk, high-return’ investment, which only global miners would be interested in.

Greg Evans, KPMG’s Perth-based Global Leader, Mining Mergers and Acquisitions, believes there will be considerable interest.

‘If you look at what the resource is, and what it can deliver to both an owner and investor—and, probably more importantly, the local economy—it would have to be a definitive “yes”.

‘The copper price is heading in the right direction, the supply metrics are working in the favour of copper broadly and I would expect that BCL are being approached reasonably regularly by a number of metals traders.’

Evans points to growing demand for copper, noting that batteries in electric vehicles are likely to use 927,000 tonnes of copper a year by 2030, according to forecasts by Bloomberg New Energy Finance. That alone equates with 5 per cent of current production.

Evans believes a global miner, ‘like Glencore or similar’, is likely to become involved.

‘KPMG just completed a survey around transaction activity across a bunch of sectors. In the mining sector, the preference of the majors was particularly for joint ventures at the asset level.

‘Batteries in electric vehicles are likely to use 927,000 tonnes of copper a year by 2030.’

‘To me, that would be the form that a transaction would likely take. BCL would ensure the social licence to operate, and look after stakeholder management, political and administrative management on the ground, with perhaps a partner coming in providing financial and operational support.

‘So, it is likely to be a large industry player used to dealing in remote locations, eliciting strong local community engagement, and creating local employment as an obligation and priority. All those things are going to be required.’
Risks

Satish Chand, Professor of Finance at the University of New South Wales and based at the Australian Defence Force Academy in Canberra, says risk assessment will be crucial.

‘There has been a history of conflict where a very small number within the population has the ability to stop a very large mine. That risk remains.

‘There is a contest over the distribution of proceeds and that has not yet been settled to my understanding. There is little that is known about the magnitude of the cost involved in the clean up.’

Chand notes that the Bougainville Mining Act says 51 per cent of the mine must be locally-owned. The non-binding referendum on Bougainville’s independence from PNG scheduled for 2019 must also be considered a ‘risk’.

Greg Evans agrees the local shareholding requirement makes the financing prospect ‘more challenging’.

‘The biggest successes that the majors have had in countries such as Africa and South America, have been where they’ve engaged local communities, shared the profits, and shared the benefits. The control over how those profits flow and are allocated is equally the challenge—as it is the solution.

‘You’ve always got to come back to the quality of the resource; which will always make it attractive.’

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Panguna landowners give big tick to mining but no to BCL

Radio New Zealand | 22 June 2017

The head of a landowners group controlling the site of the Panguna mine in Papua New Guinea’s Bougainville says it is keen to see a resumption of mining but will always be opposed to the return of Bougainville Copper Ltd.

BCL was the original operator of the mine and has been blamed for sparking the civil war.

Its former multi national owner, Rio Tinto, last year walked away, giving its shares to the PNG and Bougainville governments, rather face demands for compensation over the environmental and social damage blamed on the mine.

Last week this new look BCL was stopped by a protest march from signing a memorandum of agreement with the Panguna landowners – a move seen as the first move to re-open the Panguna mine and boost the region’s economy ahead of an independence vote in two years.

Not the least of BCL’s problems is that they were not dealing with the proper landowners and legal action has put a stay on the signing of the MOA.

The man they should have been talking to, Philip Miriori, the chairman of the Special Mining Lease Osikaiyang Landowners Association, says he will never back BCL returning.

Mr Miriori, who also heads the Me’ekamui Government of Unity, explained the SML’s thinking to Don Wiseman.

PHILIP MIRIORI: It is the same legal company with enormous liabilities hanging on its shoulder and some much damage was done during their operations. So it is the same company.

DON WISEMAN: The thing here is of course that since Rio Tinto has walked away – it doesn’t have resources does it? In terms of that  environmental and social deficit that people like John Momis have talked about, this current version of BCL is never going to be in much of a position to do much about that is it?

PM: With BCL the ABG is saying it is a new company, but we don’t think it is a new company, it is the same company,, and the same management. People from Rio [Tinto] are still with the BCL arrangement, even now.

DW: Are there any circumstances under which the Me’ekamui Government of Unity and the SML Osikaiyang Landowners would ever accept BCL?

PM: I don’t think we will accept BCL to come back to Panguna. BCL has said it would attract development partners, but we don’t know this development partner, who is he? maybe it is the same Rio Tinto. They are looking to come back and work with BCL.

DW: So this protest last Thursday and Friday, the protest and the road block, did your people organise that?

PM: The people of Panguna especially the landowners and the women, our stand has always been clear – we don’t accept BCL to come back and with the protest march last Friday it is a common sense that the people have here in Panguna, that by not accepting BCL to come back they had to stand for their rights. So they [The ABG] can make any tricks under the sun but with the records that BCL have in the past it is just not going to work. The protest march was right, you know.

DW: last month you presented a petition to the ABG, more than 500 signatures. What has been the outcome of that?

PM: Well the outcome from the ABG was negative. I presented that petition myself to President Momis. The petition was signed by 550 people from Panguna – the SML [Osikaiyang landowners]. So no response from President Momis’s office, so these are the things that have brought the people together on the signing of the MOA.

DW: You are not opposed to mining are you? You clearly are interested in mining and you have linked up with this Australian miner called RTG. Why have you linked with them? Why have you chosen them?

PM: I am always for mining you know but not with BCL. We have this Australian company. We work with them for some time now and we built trust so we are not opposed to mining opening. We are for. We want the mine to open, to generate prosperity for our people and not with BCL. We don’t want BCL to come back you know.

DW: Let’s say RTG were to get an exploration licence, would you be keen for them to get in there and start doing the EL work, as it’s called, immediately and then the prospect of opening the mine as soon as possible.

PM: If we are given an exploration licence we will start immediately and also make clean up operations around Panguna.

DW: There are a lot of other landowning groups close by aren’t there and it would seem that you are at odds with them, or are you?

PM: Now I want to correct this. The other eight, or whatever, landowner associations – I think at this point in time they are irrelevant. They can come in when the mine is up running. They can make no decision on where the pit is, so right now, for me, it is irrelevant for those other organisations to make a decision over the SML [Osikaiyang Landowners]. The only entity, legal entity, is SML which I am chairman of.  

DW: Your message then to the ABG is that there is substantial opposition among the people who are on the land, or who have the land, around that enormous hole in the ground at Panguna, who are opposed to BCL coming in, but you are very keen on mining and you want to form an association with this Australian company, RTG.

PM: A proper awareness is what is needed now. To go right down to the people, you know, and tell them what is the advantage of re-opening the mine now, and the disadvantage of keeping that mine [shut] for ten years as BCL says. But to us I can see that we start the mine up now, so that we start generating the money and prepare for the referendum or whatever you know.         

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Bougainville People Against Mining: New Petition

SIGN THE PETITION

A new petition on the Avaaz Community Advocacy website is targeting the Autonomous Bougainville Government with a no mining message.

The Petition says mining is the cause of conflict on Bougainville in which some 20,000 Bougainvilleans perished. It is not needed by the people of Bougainville as much as it is by mining companies who care little for the people in their effort to make a profit. Therefore no mining company should be allowed back on the island.

SIGN THE PETITION

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Bougainville Copper moving to reopen controversial Panguna mine with Government backing

Reopening the Panguna mine could give the Bougainville Government a much-desired source of revenue claims the ABG. (AAP Image: Ilya Gridneff, file)

Eric Tlozek | ABC News | 4 May 2017

The company which used to the run the controversial Panguna copper mine on the island of Bougainville is now trying to reopen it with the support of the island’s Government.

It has been almost three decades since Panguna was abandoned, after anger about the mine led to the outbreak of an armed insurgency known as the “Bougainville crisis”.

Now the Bougainville Government believes it needs the mine to reopen, so the region can have a source of revenue that could enable it to become independent from Papua New Guinea.

The bid by the Bougainville Copper Limited (BCL) to reopen its Panguna mine is stronger than one might expect, given the mine led to an armed insurgency and its abandonment left central Bougainville with many environmental problems.

But this time it will be quite different and the landowners will be brought along on the journey.

BCL secretary Mark Hitchcock said restarting the mine would allow the company to address some of the environmental and social problems it left behind.

“We did have to leave in a hurry and things were not closed down the way that a normal mine would close,” Mr Hitchcock said.

“When we go back, we’ll be conducting our baseline studies to see what the situation is and we will, as the mine progresses, progressively work on some of those environmental issues.

“But with the people, the mine will only work if we involve them all the way along.”

BCL was owned by Rio Tinto, but the mining giant gave its shareholding to the PNG Government and to the Autonomous Bougainville Government, the entity created as part of the Bougainville Peace Agreement to end the crisis.

The PNG Government said it would then give its shareholding to unspecified landowners in Bougainville, creating uncertainty about who the company must deal with and leaving the Bougainville Government without a controlling stake.

Mr Hitchcock said that has created another problem to be resolved.

“The ABG and the landowners are a little bit concerned about who the actual owners are, after Prime Minister O’Neill said that he was going to gift them to the people of Bougainville and the landowner,” he said.

“So that’s one of the issues we need to sort out. “

The controversial Panguna mine was one of the richest copper mines in the world. (ABC News, file photo)

The PNG and Bougainville Governments have just agreed to create a Joint Steering Committee to resolve this and other issues.

BCL executive chairman Rob Burns said that was a major step forward.

“So we’ve got commitment in that respect that all parties are going to work together and it’s terrific news for BCL,” Mr Burns said.

BCL was stripped of its mining tenements and left with just an exploration licence, but it still has all the resource data for the site.

Other companies have expressed an interest in mining Panguna, but the Bougainville Government is giving preference to BCL because it owns part of the company.

Raymond Masono, Bougainville’s Deputy President and Mining Minister, said “BCL is not longer the devil that we know”.

“We actually own this devil as a major shareholder in the company,” he said.

“Also, BCL under the Bougainville Mining Act has the first right of refusal to Panguna.”

BCL return expected to face opposition

The main reason the Autonomous Bougainville Government is supporting a resumption of mining is revenue.

There will be a referendum in 2019 on whether the region should become fully independent of Papua New Guinea, and the Bougainville Government believes a mine is the best way to guarantee income for a new country.

“We believe that Panguna can bankroll Bougainville’s autonomy and independence if the people so decide in the 2019 referendum,” Mr Masono said.

The Bougainville Government, headed by President John Momis, believes most landowners support reopening the mine.

The Bougainville Government says most landowners support the resumption of mining, but other residents may be less convinced.

A United Nations Development Program report in 2014 found there was no evidence of majority support for reopening the mine amongst the general population.

There are also some organised groups who oppose BCL’s return.

Mr Burns said the company was aware of “active detractors”.

“We believe that they’re a very minor group and the most vocal of that group have competing interests in our Panguna mineral rights and they aren’t truly representative of landowners,” he said.

The push to reopen Panguna is part of a broader move by the Bougainville Government to lift its moratorium on mining in general.

BCL’s attempt will surely be watched by companies and investors to see how well the damage of the Bougainville crisis has healed.

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