AFTER two years of deliberation, Rio Tinto has today transferred its 53.8% shareholding in Bougainville Copper Limited (BCL) to an independent trustee, which, in six months, will provide both the PNG and Bougainville governments each with 36.4% of the company.
The remaining 27.2% of shares is held by independent shareholders, who now become important players in the future of BCL.
In a media statement, Rio said Equity Trustees Limited will manage the distribution of shares between the ABG "for the benefit of Panguna landowners, the people of Bougainville and PNG".
According to Rio, this “ensures both parties are equally involved in any consideration and decision-making around the future of the Panguna mine.
“The ultimate distribution of our shares provides a platform for the ABG and PNG government to work together on future options for the resource,” said Rio copper & coal chief executive Chris Salisbury.
“Our review looked at a broad range of options and by distributing our shares in this way we aim to provide landowners, those closest to the mine, and all the people of Bougainville a greater say in the future of Panguna.”
Although Rio will no longer hold any interest in BCL, the statement said it will continue to meet its obligations under the agreement during that period to ensure an orderly transition in the shareholding.
BCL chairman Peter Taylor resigned with immediate effect but will continue to provide services to the board during the transition period.
The statement was silent on whether Rio will take any responsibility for the environmental clean-up of the site, so it must be assumed that this huge task will be left to BCL to address.
The negotiations about who will eventually take control of BCL will be particularly messy, and Rio must know this.
The governments of PNG and Bougainville have been at loggerheads for some time over financial obligations the PNG government has not met in relation to the Bougainville Peace Agreement.
In light of this, Mr Salisbury’s comment that Rio’s decision “provides a platform for the ABG and PNG government to work together on future options” seems especially cynical.
With Bougainville’s referendum on independence due in the next couple of years, Rio’s stepping aside could turn out to be an abdication that spells even bigger trouble for Bougainville-PNG relations.