Tok Pisin breaks through as ANU offers it as a subject

Bougainville gets caught in China's Pacific power game

Mt Bagana in BougainvilleFUMI MATSUMOTO | Nikkei Asian Review | Extracts

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SYDNEY -- A small island has found itself caught in the escalating battle for influence in the South Pacific.

On both economic and diplomatic fronts, Papua New Guinea's autonomous region of Bougainville has become a key piece in the game between Beijing, on one side, and the US and its allies on the other.

With Bougainville holding one of the world's largest untapped deposits of copper, Chinese and Western companies are weighing the prospects for reopening its Panguna copper mine -- closed since a vicious civil war broke out in 1989.

The island is also set to hold an independence referendum on 15 June, potentially creating a new country that could vote in international forums such as the United Nations.

John Momis, president of the Autonomous Bougainville Government, told Nikkei Asian Review that Chinese businesspeople raised the matter of investing in the mine on a visit to PNG ahead of last month's Asia-Pacific Economic Cooperation in the capital, Port Moresby.

Momis said he told them that, "Panguna is not an easy issue, and as far as ABG's concerned we have decided to put it on the back burner until the referendum."

The peace agreement signed by the PNG government and island leaders in 2001 created the ABG and set the stage for the referendum.

Chinese involvement with the mine would give Beijing a direct role in the economic future of a newly independent nation as it seeks to secure resources and expand its strategic network. It would also boost China's sway in its power game against the US and regional rivals such as Australia.

But given its potential resources, the government in Port Moresby would be loath to lose the island, especially the Panguna mine. And while the referendum is not binding, blocking a secession backed by most of the local population might be a recipe for renewed unrest in the volatile country.

Diplomatic sources said 99% of residents will support independence; Ted Wolfers, a professor at Australia's University of Wollongong, said the consensus is an "overwhelming majority" will vote that way. But he also suggested PNG would not let the island go easily.

"PNG's government might talk the autonomous government into settling for greater autonomy that falls short of independence," Takehiro Kurosaki, a junior associate professor at Japan's Tokai University said.

The issues of the mine and referendum puts Bougainville firmly in the spotlight. While the situation on the island is replete with risks, Panguna's reserves are very attractive to China, the world's largest copper consumer.

The deserted mine contains more than one billion tons of ore, according to a study from 2009 -- more than the 675 million tons extracted over the 18 years it was open.

These deposits look even more valuable given global concerns over copper supplies, due to emerging market demand, depletion of known resources, rising mining costs and limited new discoveries.

A number of companies are circling. A Lowy report said there has also been corporate interest in the mine from Australia, the US, Canada and Brazil.

Whoever wins out will be able to cement a foothold in the region, but it will come at a financial cost.

Professor Wolfers said interested parties would have to consider the start-up costs of reopening the mine, which he sees reaching as much as $8 billion.

Bougainville's President Momis said the island's government was taking a cautious stance on the investment interest.

"We don't believe anybody who comes and talks about these issues until we see things in concrete and on paper," he said.

Nikkei staff writer Sarah Hilton in Tokyo and researcher Jennifer Walpole in Sydney contributed to this report

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