THE Autonomous Bougainville Government has made an in-principle decision to support a proposal from Bougainville Copper Ltd to reopen the Panguna copper and gold mine.
ABG President Dr John Momis said, under the Bougainville Mining Act, the decision will be subject to the powers of the mine lease landowners, who can veto the project if they are not satisfied with the conditions for re-opening.
In addition, the decision will be subject to the ABG being satisfied – on behalf of all Bougainvilleans – that the project conditions are just and equitable.
Dr Momis explained that BCL is no longer owned by Rio Tinto. The ABG now holds over 33% of BCL shares and the PNG national government has promised that the 17.4% of shares it received from Rio will be transferred to ownership of Bougainvilleans, including Panguna landowners.
This means that BCL is now a different company. It is not a subsidiary of Rio Tinto. Instead it is majority owned by Bougainvilleans.
“As a result, BCL is no longer the devil-we-know, it is instead the devil-we-own,” Dr Momis said.
“As the devil-we-own, and one that is subject to the very tough requirements of the Bougainville Mining Act, BCL is now required to seek new investors in some sort of partnership and come up with a deal acceptable to the landowners and to the ABG,” he said.
Without such a deal, BCL will have little option but to cease existence – to liquidate and to distribute its remaining funds to shareholders. At that point, Bougainville would be able to seek other potential developers.
Dr Momis said a second reason why the ABG supports BCL is that it still holds an exploration licence over the area of the former special mining lease. While it holds that licence, the ABG must deal with BCL. BCL also holds all the drilling and exploration data for the ore body at Panguna.
He said BCL is a reputable company, with reputable board members and management and it has shown a willingness to deal with the legacy issues left by the mining operation it closed in 1989.
BCL has also shown responsibility over the past five years in working closely with the ABG and the six relevant landowner associations to gradually develop responsible and workable arrangements for paying land rent and occupation fees dating back to 1990.
Dr Momis said the leaders of the combined landowner associations have consistently indicated support for BCL as the preferred company to become involved in re-opening Panguna.
“I emphasise, however, that despite all these reasons for supporting the BCL proposal, there are as yet no guarantees that it will be BCL that re-opens the mine,” Dr Momis said.
“Everything will depend on whether the ABG and the landowners are satisfied with the proposal that BCL eventually puts forward.”