JAMES REGAN | Reuters
RIO TINTO IS LOOKING into restarting its Panguna mine in Papua New Guinea, one of the world's largest sources of copper and gold until the company abandoned it a quarter century ago after local villagers chased off workers in a secessionist uprising.
A new study by Rio Tinto's majority-owned subsidiary Bougainville Copper Ltd says the mine on Bougainville contains at least five million tonnes of copper worth $41 billion at today's prices and 19 million ounces of gold worth $32 billion.
Renewed interest in the Panguna mine comes as Rio Tinto, which is expected to report a 20% drop in annual profit to around $10 billion next week, heralds a greater focus on its copper and iron ore businesses in the coming years.
Rio Tinto has long-shunned returning to the island despite an end to hostilities in 2001 and discussions from time to time with the government. In 2005, it sold its stake in another mine on Lihir island.
Between 1972 and 1989 some 3 million tonnes of copper and 9.3 million ounces of gold were mined from Panguna.
The potential for a restart could only be fully assessed once it was safe to return to the mine, according to Peter Taylor, managing director of Bougainville Copper, which owns the Panguna mine.
The new estimate for copper and gold "supports consideration of a number of potential development options", Taylor said in a statement.
"BCL continues to work with stakeholders on exploring ways in which the project may be advanced," Taylor said.
Bougainville Copper's income is now generated primarily as interest revenue on a range of debt and equity investments.
For the year ended 31 December 2012, it posted a loss of $2.6 million.