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The Horse Breeder, the Novelist and the $60 Billion Panguna Mine

Panguna. RNZ/Johnny Blades.

Aaron Clark | Bloomberg News | January 27, 2020

John Kuhns has been many things: an investment banker, a silicon smelter operator in China and a novelist. His sights are now set on an abandoned mine with an estimated $60 billion of gold and copper.

Kuhns is among a handful of people exploring for minerals and courting landowners on the Pacific island of Bougainville. His rivals include an Arabian-horse breeder, a hedge fund investment manager who keeps wallabies on his estate and a former Australian defense minister.

The involvement of such an eclectic mix of entrepreneurs is a reflection of the fact that this is no ordinary mineral reserve. Rio Tinto Group operated the Paguna mine for 17 years through subsidiary Bougainville Copper Ltd. The global mining behemoth shut it in 1989 as local protests over mine revenue degenerated into a civil war that killed as many as 20,000 people.

The mine has been in limbo ever since. But that may be about to change as the Autonomous Region of Bougainville moves toward independence from Papua New Guinea after a referendum showed an overwhelming majority of the population on the small group of islands wants to establish a new nation.

While the political uncertainty may deter major mining companies from making an immediate investment, the mine’s riches attract entrepreneurs hoping to develop the asset to a point where they can deliver it to a big operator for a fee, said Peter O’Connor, a Sydney-based analyst at Shaw and Partners Ltd. “They have to create a story with a vision,” he said.

Success will depend on earning the trust of thousands of poor, customary landholders, many of whom remember the civil war that was triggered by communities demanding greater compensation from the mine.

“The landowners want to reopen the mine but they are divided by the interested developers,” said Sam Akoitai, a member of the island’s parliament who represents central Bougainville, an area that includes Panguna. “It’s really up to the landowners to come together to understand that the land belongs to the clan and not to some individuals.”

Bougainville Copper, which is no longer associated with Rio, has estimated it would take seven to eight years and $5 billion to $6 billion to rebuild the mine and resume full operations. The company is blamed by many locals for contamination attributed to the mine.

“We retain strong levels of support among customary landowners within the project area,” Bougainville Copper said in a statement. “We have a trusted local team on the ground that continues to engage with project area communities.”

The Bougainville Mining Act 2015 strengthened landowner control and was designed to increase compensation to local communities and the island’s government from future mining to avoid a repeat of the bloodshed of the 1980s and 1990s. The government also decided not to renew Bougainville Copper’s exploration license, which the company is challenging in court.

In June 2019, Kuhns flew several landowners to the U.S. to meet potential investors, including representatives from Barrick Gold Corp. At the Harvard Club in Midtown Manhattan, where stuffed moose, bison and even an elephant head adorn the rooms, the landowners heard Kuhns deliver a PowerPoint presentation introducing potential investors to Bougainville.

Barrick declined to comment.

“Panguna mine can be rejuvenated and can be resuscitated for a couple of billion dollars,” said Kuhns in a follow up phone interview. “It’s going to take a major to do that.”

Among those also interested in Panguna is Jeff McGlinn, who made his fortune in mining and construction services through Western Australia-based NRW Holdings Ltd., which he co-founded. McGlinn, who resigned from NRW in 2010, is part of the glamorous world of Arabian horse breeding, mixing with models and celebrities at parties on the French Riviera and promoting luxury brands. He once gave an Arabian colt to Italian opera singer Andrea Bocelli.

McGlinn’s roots in mining give him valuable experience for Panguna — one of NRW’s businesses was constructing dams that hold mining waste. He’s also linked to a recent effort by the island’s government to kick start development, when it created Bougainville Advance Mining. The government’s Executive Council proposed last year an amendment to the 2015 mining act that would give all available mining rights to the new company, in which McGlinn’s Caballus Mining would hold a stake.

That amendment drew criticism from landowners, as well as Bougainville Copper, the former mine operator, which says the proposal undermines its rights to mine Panguna. The bill was later shelved. A representative of Caballus said McGlinn was unavailable to comment.

Another interested party is Richard Hains, son of the Australian billionaire David Hains. Richard, famous for keeping wallabies on his Gloucestershire estate, has helped develop mines in some of the world’s most difficult places. He’s the largest shareholder of RTG Mining Inc., whose management team has financed, built and operated mines across Africa and Asia, including the Boroo gold mine in Mongolia.

“Some of the best opportunities in the mining business in the 21st century are now in the more difficult commercial environments,” Hains said in a phone interview.

RTG believes it can restart production at Panguna through a staged process in as little as 18 months for about $800 million.

“It’s far smarter to start with a smaller footprint,” said RTG Chairman Michael Carrick. “Then in consultation with the community, we can turn up the mine’s operation.”

RTG operates a joint venture with the Special Mining Lease Osikaiyang Landowners Association, a Panguna landowners group. The JV employs 15 people, including Philip Miriori, the chairman of the landowners group.

There are bigger fish too. Fortescue Metals Group Ltd. said in an emailed statement it has sent representatives to Bougainville to learn about the region and potential opportunities, confirming earlier reports. Founder Andrew Forrest is Australia’s second-richest person with a $10.2 billion fortune, according to the Bloomberg Billionaires Index.

Shaw and Partners’ O’Connor said Chinese miners may also have a chance of redeveloping Panguna because they have a greater risk appetite and access to cheap financing.

But the Panguna landowners group Chairman Miriori said the people he represents aren’t interested in working with Chinese developers because of their poor environmental track record.

If anyone wins the right to develop Panguna or other parts of the autonomous region they will need to do so cautiously. Violence remains a constant threat in a community that is still fiercely divided.

A geologist working for Perth-based Kalia Ltd. was killed and seven others were injured in an attack in northern Bougainville in December, according to the local government and the company, whose chairman is former Australia Minister for Defence David Johnston. Authorities subsequently suspended Kalia’s exploration expeditions and geological field work.

There’s also a moratorium on work at Panguna because of sensitivity to restarting the mine, said Raymond Masono, Bougainville’s vice president and minister for mineral and energy resources.

“We are no longer talking with any investors about Panguna until the moratorium is lifted, and we don’t know when” that will be, he said by phone. “The government is treading very carefully on this particular mine.”

But prospects for restarting Panguna and allowing for the development of new mines are bolstered by the idea that Bougainville would need revenue to have any chance of financing an independent state. Many hope the mineral wealth could ultimately help reduce poverty for the region’s 300,000 people where estimated per capita GDP is only about $1,100.

That would depend not only on clearing the way to restart production, but a government able to make sure that enough of the proceeds are used to fund development. “Given the failure of mining in PNG to deliver really anything like sustainable development, those hopes may end up being disappointed,” said Luke Fletcher, executive director of Jubilee Australia, a group that has tracked the effect of resource extraction.

But the lure of riches mean miners aren’t likely to give up.

“Bougainville had almost no exploration for nearly 40 years,” said Mike Johnston, executive director of Kalia. “There’s no other place like it on the planet.”

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Bougainville president accuses mining company of lying to Australian stock exchange

Bougainville’s Panguna mine, for which RTG Mining is seeking an exploration licence.

John Momis says his government ‘will not rest’ until Australian-linked miner seeking licence for Panguna mine is banned for life from Bougainville and PNG

Kate Lyons | The Guardian | 24 January 2020

The president of the autonomous Bougainville government has accused an Australian-linked mining company of lying to the Australian Securities Exchange over its plans to reopen one of the world’s largest copper mines.

In a scathing statement, John Momis, the president of the autonomous Bougainville region, accused the Australian-linked RTG Mining of “lies and deceptions” and said his government “will not rest until all RTG and their executives are banned for life from Bougainville and Papua New Guinea”.

Momis was referring to a statement issued by RTG Mining to the ASX on Tuesday in which the company sought to clarify recent press reports, which have alleged that RTG staff are banned from entering Papua New Guinea.

In December, after the results of a referendum that saw almost 98% of Bougainvilleans vote in favour of independence from PNG, Momis issued a warning banning people affiliated with certain foreign mining companies, including six from RTG and one from Kalia Group, from entering Bougainville. Momis said they were creating “disharmony” in the region and that he had sought the assistance of the PNG prime minister and office of immigration and border security to assist with keeping them out of Bougainville.

However, RTG clarified in its statement to the ASX that its executives were “not banned from travel to Papua New Guinea” and emphasised that “the national government currently [have] constitutional authority over border control for the country”.

RTG is seeking to secure an exploration licence at the Panguna mine in Bougainville. The Panguna mine was at the heart of the brutal civil war in the region that saw an estimated 20,000 people killed between 1988 and 1997. The mine, which once provided 45% of Papua New Guinea’s export income, has been mothballed since the conflict began, but there has been talk about reopening it.

Among the companies in talks about resuming mining in Bougainville are RTG, which is listed on the Canadian and Australian stock exchanges, ASX-listed Kalia, Bougainville Copper Limited, a former subsidiary of Rio Tinto that ran the Panguna mine in the 1970s and 1980s, and Caballus Mining.

Andrew “Twiggy” Forrest has also expressed interest in mining in Bougainville, with the Sydney Morning Herald reporting that representatives of his mining company, Fortescue, travelled there in 2019 to explore “potential opportunities”.

There are disputes over land rights at the Panguna mine site, but RTG is the joint venture partner of the Special Mining Lease Osikaiyang Landowners Association (SMLOLA). RTG wrote in their statement to the ASX that the members of the SMLOLA “are the customary landowners who own the minerals at the Panguna Mine under the Bougainville Mining Act”.

However, Momis said the SMLOLA was established under an old system and that the autonomous Bougainville government considered its claims over the mine “illegal, null and void”.

There are concerns that disputes over land rights at the mine site might reignite tensions in the region. The Bougainville government enacted an indefinite moratorium on renewing the licence of BCL, a controversial mining company, in January 2018 over fears it could reignite violent civil conflict. However, since then, the government has shown signs that it was in favour of restarting mining in the region.

Despite voting for independence from PNG, the question of how an independent Bougainville would support itself hangs over the vote, with some experts saying it is impossible for Bougainville to become financially independent without a strong mining industry and that it would take much longer for other mining projects to be established and become profitable than it would take to reopen Panguna.

The autonomous Bougainville government and RTG Mining were contacted for comment.

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ABG President refutes RTG claims

Autonomous Bougainville Government President John Momis.

One PNG | 22 January 2020

I refer to RTG Mining Inc.’s most recent announcement to the Australian Stock Exchange (ASX) dated 21st January 2020 whereby RTG deliberately made false claims to mislead their shareholders, the general public and the ASX.

Firstly, the Special Mining Lease Osikaiyang Landowners Association (SMLOLA) was an entity established under the controversial Bougainville Copper Limited (BCL) regime, which mistakenly placed landowners into individual blocks. This is in fact inconsistent with the traditional land inheritance system whereby land is owned by clans and families. The ABG has started the process to rectify this grave past mistake with the rejection of BCL’s licence over Panguna, thereby deeming all current mine affected landowner associations, including SMLOLA illegal, null and void.

So while it is true that RTG are the joint venture partner of SMLOLA as they have confirmed, I would like to confirm SMLOLA have no legal rights over Panguna and cannot enter into any legally binding agreements relating to Panguna. I am happy to advise however that the ABG will be assisting the true and genuine landowners to ensure proper social mapping is carried out in order to establish new legal landowner associations and entities.

Secondly, as per a media statement released from my Office on the 23rd December 2019, I would like to re-confirm and reiterate that the below RTG executives currently still have a travel ban on them, preventing them from entering Bougainville:

  1. Mr Michael J Carrick – Chairman of RTG Mining
  2. Ms Justine A Magee – CEO and Executive Director of RTG Mining
  3. Mr Mark Turner – COO of RTG Mining
  4. Mr Robert N Smith – Non-Executive Director of RTG Mining
  5. Mr Phillip C Lockyer – Non-Executive Director of RTG Mining

I also re-confirm and reiterate that this travel ban will not be uplifted under any circumstance. Whilst there was a travel ban into Papua New Guinea, it has recently been uplifted due to RTG’s lies and deceptions to the PNG government and immigration department about their purported involvement in the Mt Kare project – a project that the world knows it will not succeed. It is therefore concluded that RTG have taken advantage of the fact that both the PNG and ABG operate independently of each other and do not always consult each other on foreign companies, and that RTG’s interest in the Mt Kare project is merely an expensive ploy and deceptive tactic to be able to have a presence in PNG and access to their only real interest – the financial rewards of the Panguna pit.

RTG and their executives should be totally and utterly ashamed of themselves for their corrupt, disruptive and divisive behaviour. They have tried to take advantage of our landowners and people and have shown a complete lack of respect for government authorities. RTG have completely misled the markets for their own financial gain and convenience. The ABG will not rest until all RTG and their executives are banned for life from Bougainville and Papua New Guinea.

As it is my duty to protect the people of Bougainville from immoral charlatans, I appeal to the ASX, TSX and OTCQB, as your duty to protect current and potential shareholders, that you perform a full investigation into RTG Mining and their executives and their misconduct. My Government would be more than happy to assist you with any enquiries relating to RTG and their activities whilst in Bougainville.

For current and potential shareholders and financial markets, I hope that this clears up any confusion or misunderstanding on RTG Mining’s position in Papua New Guinea, Bougainville and Panguna.

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Panguna Landowners Question Mining Law Changes

Post Courier | January 6, 2020

The Panguna landowners have called for consultation ahead of renewed push to amend Bougainville’s Mining Laws. In a recent interview with Reuters, Bougainville vice-president and Mining Minister Raymond Masono said, in reference to his determination to push through with highly controversial amendment of mining legislation at all costs, that “the revolution is ongoing”.

Philip Miriori, the chairman of the Special Mining Lease Osikaiyang Landowners Association (“SMLOLA”) said; “There has been no consultation by the Mining Department with landowners post the rejection of amending legislation by the Bougainville Parliamentary legislative committee – none.”

“This legislation is opposed by each and every Panguna Landowner Association, local government bodies and all sections of the community. It will be a disaster for the mining industry in Bougainville and will ensure Panguna is never reopened.”

“Both the Autonomous Bougainville Government and the national government want Panguna to be reopened, so that it can reduce the dependency of Bougainville on the PNG national budget and enable us to deliver fiscal self-reliance for all Bougainvilleans,”

Lawrence Daveona said, “The Panguna landowners have written to Prime Minister James Marape, drawing his attention to this offensive and destructive attack on all Bougainville landowner’s hard-won legal rights being removed with the stroke of the pen, to allow the illegal transfer of the Panguna mine together with a near monopoly over all future large scale mining on Bougainville, to an unknown shelf company in the British Virgin Islands, based on a plan which can never work. PNG knows better than we do that, we must attract high quality foreign investment to grow and that means bringing in reputable development partners and allowing them to work with us to make Panguna and Bougainville a success.”

“This is the time for us all to pull together on the back of a very successful and peaceful Referendum. The revolution is done – a proposal like this will only create disharmony again and pit customary landowners against the mining department which is not necessary – we are here to work together co-operatively, to find a fair and equitable solution for everyone.”

The SMLOLA was established by the Autonomous Bougainville Government September 7 2011 with its Constitution being drafted by the ABG Mining Department.

The SMLOLA was established uniquely for and on behalf of all the customary landowners who own land contained within the area covered by the special mining lease at Panguna and now the subject of the expired EL 01, including the land used for the Panguna gold and copper mine pit, industrial processing areas, Panguna township and the areas around the mine within the area contained in EL 01.

The stated purposes of the SMLOLA pursuant to its Constitution is set out in detail in clauses 1.2 (a) – (h), and includes amongst other things, the duty to maximise the commercial benefits of their members in the Panguna Mine and promote peace, unity and co-operation amongst landowners in a sustainable manner.

The customary landowners and their families are members of the SMLOLA by right of birth within the 7 named villages, in accordance with the Naisoi custom, and as set out in clause 2.1.1(a) of the SMLOLA constitution.

The SMLOLA has in excess of 3,500 members.

The governing body of the SMLOLA is democratically elected every three years as required by clause 4.3.3 of the constitution, by the members so that its structure and board is truly representative of the owners. The current board was elected on 21 December 2018.

Section 8 of the Bougainville Mining Act states that “all minerals existing on, in or below the surface of customary land in Bougainville are the property of the owners of the customary land.

This is exactly the same as our unwritten customary law on minerals ownership that has been in effect for millennia.

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Bougainville landowners seek help from PNG prime minister

Panguna. RNZ/Johnny Blades.

Radio New Zealand | 3 January 2020 

A landowner group at the site of the Panguna Mine has asked the Papua New Guinea Prime Minister James Marape to intervene in its dispute with the Bougainville Mining Department.

The group, the Special Mining Lease Osikaiyang Landowners, or SMLOLA, has written to the prime minister detailing its concerns that it is being shut out of involvement in any re-opening of the mine.

A resumption of mining at Panguna, closed by the civil war, has been touted by several groups as the way for Bougainville to develop a viable economy.

SMLOLA said since Raymond Masono became Mining Minister two years ago it has been shut out of any talks, despite it being one of the groups which own the minerals under the Bougainville Government’s Mining Act.

It said it feared the Mining Department was driving secret, controversial changes to this measure without the support of the wider Bougainville Government.

And it said a call for a travel ban on executives from its Australian partner, RTG, was disrespectful.

SMLOLA said the claims from the Bougainville Government about these executives causing disharmony by disrespecting local custom are “misleading and without factual substance”.

Attempts by RNZ Pacific to reach Raymond Masono for comment have been unsuccessful.

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Landowners ‘Ready To Reopen Panguna Mine’

Panguna landowners showing clearly which option they will vote for at the mine site up in Panguna.

Post Courier | November 25, 2019

Landowners of the decommissioned Panguna copper mine are now prepared to reopen the mine as soon as the next Bougainville House of Representative is installed.

Seeing that as the only means of generating income for Bougainville as soon as it gains independence status, the landowners have agreed that Panguna will finance Bougainville like it financed Papua New Guinea back in the 1970s and 80s.

Special Mining Lease Osikayang Landowners Association (SML-OLA) mobilised all landowners from different parts of Panguna to gather at the edge of the mine pit to show that they were now one and ready to re-open the mine when Bougainville gained its independence.

SMLOLA chairman Philip Miriori and chief consultant adviser to the association Lawrence Daveona told the Post-Courier in Arawa that the landowners were now one and that there was no differences among them anymore.

“We are now united as one and we, re ready to re open this mine to finance the Independence of Bougainville, culturally and symbolically over to the government the new government that will be in place next year,” Mr Miriori said.

“This will be proof to the PNG government and also the international community that we can also be economically independent now, and right now Panguna mine is the only answer because it will not need exploration.

“We are now very positive that this mine will be reopened soon, we are working together with our developer RTG to reopen the mine and we have made a very strong commitment and stance that we do not want BCL back ever again into Panguna or on this island.”

He said the landowners were the people to have and to make the final say on the mines re-opening and now they had made a final say, to reopen the mine, to cater and finance the Bougainville independence.

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Derelict mine caused a bloody war. Now Aussie companies are fighting over it again

Heavy trucks sit rusting on the edges of Panguna copper mine, closed in 1989 as a result of sabotage.

Sarah Danckert and Ben Bohane | Sydney Morning Herald | November 15, 2019

Iron ore magnate Andrew “Twiggy” Forrest has joined the race with an unruly bunch of small, struggling mining companies, all with links to Australia and share prices of 10c or less, for access to some of the world’s biggest copper and gold deposits on the Pacific island of Bougainville.

The manoeuvring over the gigantic, mothballed Panguna mine comes ahead of an independence referendum later this month that could turn Bougainville into the world’s newest nation after disputes over foreign mining prompted a bloody, 10-year war that killed perhaps 15,000 people.

However, China is also sniffing around opportunities in Bougainville, although not necessarily the Panguna mine itself, which was valued recently at a staggering $US58 billion ($84 billion).

Previously run by Rio Tinto, the mine was at the centre of a decade-long conflict over allegations that locals were being ripped off and the environment damaged by foreign mining companies. The war continued well after the mine closed as a battle of control for the country raged between the Bougainville Revolutionary Army and the Papua New Guinea Defence Force. It was the most serious conflict in the south Pacific since World War II.

The Age and The Sydney Morning Herald have confirmed that representatives of Mr Forrest’s mining company, Fortescue, travelled in recent months to the island and were exploring growth opportunities there.

“As a leading mining company with world-class expertise, we constantly assess opportunities to build on our operational reputation to drive future growth through product diversification and asset development,” chief executive Elizabeth Gaines said. “Consistent with business development activities, representatives from Fortescue have visited Bougainville Island to learn about the region and potential opportunities.”

Other companies – including one chaired by a former Liberal defence minister David Johnston and another by Arabian horse breeder and luxury goods dealer Jeff McGlinn – have also been striving to gain local support on the island to reopen the mine, which was shuttered in 1989.

Meanwhile, a Chinese delegation is rumoured to have offered substantial funds in late 2018 to help finance a transition to Bougainville independence, along with offers to invest in mining, tourism and agriculture, with a figure of $US1 billion cited. A new port was also reportedly proposed.

A new nation to our north?

On November 23, Bougainvilleans will go to the polls and are expected to vote overwhelmingly for independence from Papua New Guinea. But in the wake of that expected vote, there is a real risk of new disputes between landowner groups as miners, many with links to Australia, could reignite the crisis that engulfed the island 30 years ago.

“Are they f—king mad?” asks one former Rio Tinto executive who worked at the company when it was the majority owner of Bougainville. “Re-opening Panguna would be a disaster.”

In its heyday, the mine, which would take an estimated $US5 billion in infrastructure spending to restart, was a productive asset for Rio Tinto, then known as Conzinc Rio Tinto. During the final year of production in 1988 and 1989, Rio’s subsidiary Bougainville Copper (BCL) extracted 550,000 tonnes of copper concentrate and a whopping 450,000 ounces of gold.

Already the tussle for Panguna has sparked a race to promise the best deal and the highest royalties to landowners while stemming the environmental degradation that has ravaged Bougainville. But that race has also already sparked intense political disagreement between rival groups on the island.

Rio’s former subsidiary BCL is still in the race for a mining licence, though Rio divested its shares and walked away in 2016. But a number of new entrants are also in the game.

Among them is Toronto and ASX-listed RTG Mining Inc – which has links to the Philippines and counts the son of billionaire Australian stock picker David Hains, Richard, as the largest shareholder of its Toronto-issued shares.

Another ASX-listed company, Kalia Limited, has been given two permits to explore in the northern tip of Bougainville. Kalia counts former Defence Minister David Johnston as its chairman and Perth-based mining entrepreneur Nick Zuks as its top shareholder. Johnston’s biggest claims to fame at home are a controversy over his lavish spending on entertainment as minister and comments that South Australians couldn’t build a canoe, much less a submarine.

Kalia’s bid is financially supported by a company run by Australian polo patriarch Peter Yunghanns. Another significant shareholder, Graeme Kirke, is the founder of Kirke Securities where Mr Forrest previously worked.

More recently a new player, Caballus Mining, has arrived in Bougainville. It sparked fears, rumours and intrigue when it emerged the Autonomous Government of Bougainville had drafted new laws that would assign the responsibility for issuing mining licences to a new entity – Bougainville Advance Mining and a foreign partner. Many believed that partner would be Caballus.

Caballus Mining was set up only in August 2018. Its sole director is Arabian horse breeder and luxury goods dealer Jeff McGlinn – a man who posted a flashy social media video of Saudi royalty at a luxury event, and another of him giving one of his fine equines to classical crossover singer Andrea Bocelli.

The entry of Caballus sparked fears among Bougainville locals – specifically those linked to rival miners – that a three-way fight for Panguna would erupt.

Slugging it out

Already, former Rio subsidiary BCL and Australian-Toronto based RTG Mining have been slugging it out via statements on their websites or on the Australian Securities Exchange. RTG claims BCL has lost its local goodwill and cannot operate in Bougainville, and that RTG has the support of a landowner group the Special Mining Lease Osikaiyang Landowners Association – one of the groups who say they represent landowners in the Panguna area.

BCL hit back saying the landowners’ association (known as SMLOLA) is a new invention and points to recent statements disputing its provenance. In turn, the landowner groups supporting BCL’s plans to reopen Panguna have also come under fire.

The one thing both have in common is their respective share prices are in the gutter, with BCL trading at 10 cents a share and RTG trading at 6.5 Canadian cents (7.4 cents). Kalia’s share price is just one-tenth of a cent.

The disputes between miners have been reflected in intense politicking among local landowner groups and political players on Bougainville. Bougainville’s president John Momis has copped much criticism for entertaining the Caballus deal, and the Autonomous Bougainville Government has given mixed signals on its position on mining.

Momis initially supported a moratorium on mining at Panguna to avoid reigniting old conflicts between landowner groups. The moratorium was put in place in early 2018, but the government now appears to favour mining across the island as a means to generate income and underwrite independence.

Autonomous Bougainville Government President John Momis.

Landowners are guaranteed rights under the 2015 Mining Act, but in an urgent bid in January 2019 to raise funds for the referendum, the government proposed to abolish those rights, at the same time allocating “near monopoly” rights to Caballus’s Bougainville Advance Mining. That legislation was later rejected by the government’s legislative committee, illustrating how politically contentious this issue will be in an independent Bougainville.

Fiscal self-reliance

In recent months, the mudslinging by supporters of both groups has died down. Several sources linked to the company and NGOs operating on the island said this was due to the request by the government that the miners are not seen to be influencing the independence vote.

There was no answer from Caballus in response to a series of questions, including regarding its links to Bougainville Advance Mining and how it achieved such a prime position. McGlinn was last week travelling in Europe.

Calls to the Perth offices of another suitor, Kalia Limited, which is now led by Michael Johnston, the former boss of failed PNG miner Nautilus Mining, went unreturned. David Johnston (no relation to Michael) and Kalia shareholder Nick Zuks also did not return calls.

RTG chairman Michael Carrick was also loath to talk about the issue.

“Politics is played extremely robustly in PNG and the facts/truth are often amongst the first casualties,” Carrick said via email from his Perth office. However, he added that mining would be part of Bougainville’s future.

“There can be no independence without first setting the country on a pathway to fiscal self-reliance and Panguna is the only asset which can assist this fundamental objective.”

BCL company secretary Mark Hitchcock said from his office in Port Moresby that the company retained strong support among landowners and rejected suggestions the company had lost its social licence to operate.

“There is at times frustration when some purporting to speak on behalf of all landowners are in fact representing a narrower interest. Regardless, all views are to be respected.”

Luke Fletcher, a long-time Bougainville watcher and executive director of think tank Jubilee Australia warns of the “resources curse” that has plagued PNG.

“This is one of the problems of the resource curse, you have these big revenues sitting in bank accounts that can be misappropriated quite easily,” he said.

It’s a curse that many think is worth risking.

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