Bougainville voters have voted by an overwhelming margin in favour of independence from Papua New Guinea. All eyes will be on how the National Government responds and what will happen to the island’s K252  billion Panguna copper and gold mine.

The Bougainville vote being counted this week. Source: BRC

The result of the Bougainville Referendum on independence has today delivered an overwhelming result in favour of independence from Papua New Guinea.

176,928 votes for independence were recorded out of 181,067 ballots – an extraordinary 97.7%. 3043 votes were recorded for great autonomy from Papua New Guinea and there were 1096 informal ballots.

A total of 181,067 ballot papers were counted in the vote, with the Bougainville Referendum Commission (BRC) claiming a voter turnout of over 85 percent.

BRC Chair Bertie Ahern. Source: BRC

‘Voting has been in the spirit of the larger peace process, of which this referendum is just one part,’ said BRC Chair, the Hon. Bertie Ahern yesterday.

The vote is the result of an agreement between the Government of PNG and the ABG as part of the Bougainville Peace Agreement signed on 30 August 2001, after a 10-year civil war. It is non-binding and subject to ratification by PNG’s Parliament. The result will only be tabled in PNG’s Parliament if the two governments agree.

The Autonomous Bougainville Government (ABG) has previously said there are several options post-referendum:

• Continue the current autonomy arrangements
• A greater level of autonomy for the region
• Free association with PNG
• Independence to be gradually attained
• Immediate independence
• Deferring a decision on independence until after another referendum is held

Economic independence

Bougainville’s economic independence is likely to depend on the fate of the Panguna copper and gold mine, which has been closed since 1989. There have been at least seven reports looking at the viability of the island’s and they point to the importance of the mine. University of New South Wales’ Satish Chand, for example, found Bougainville would need two-to-three times the annual income it currently receives (K286 million), much of which is now provided by the PNG Government.

Bougainville’s leader, Governor John Momis, has said he supports in principle the re-opening of the Panguna mine, but says it is a decision subject to the approval of the nine landowner groups. The ABG must be satisfied with the project’s conditions. There are reports that the landowners are prepared to re-open the mine ‘as soon as the next Bougainville House of Representatives is installed.’

Circling interests

Iron ore magnate Andrew “Twiggy” Forrest, Chairman of Fortescue Metals is reportedly investigating whether the mine can be reopened. It is claimed that he ‘has been casting the net far and wide for growth opportunities beyond iron ore in the Pilbara’. Fortescue Metals is valued at US$21 billion – less than a third of the putative value of the Panguna mine.

There are also reports of Chinese interest in the mine, including rumours that in late 2018 a Chinese delegation offered to help finance a transition to Bougainville independence, along with offers to invest in mining, tourism, agriculture and a new port.

A significant capital injection will be required to rehabilitate the mine, which is unlikely to come from PNG sources. The pre-closure operator of Panguna, Bougainville Copper Ltd (BCL), has estimated that the cost of rehabilitating the mine would be about US$5 billion (K16.86 billion), with an anticipated income of about US$75 billion (K252 billion) over its 30-year life.

BCL holds the exploration licence, although two Perth-based companies, RTG Mining Inc and Caballus Mining, have signalled they want to take over the licence to develop the mine.

There are also reports that Bougainville’s Vice President, Raymond Masono, will overhaul the region’s mining laws after its ongoing independence referendum, ‘which could strip the former operator of the Panguna gold and copper project of its interests.’

Subsistence

Since the Panguna mine closed, Bougainville’s economy has survived on subsistence agriculture and fishing. The cocoa and copra industries have been revived, there is small-scale gold mining, and some potential for hydroelectric power and a revived forestry industry.

Once a mecca for tourists in the 1950s and 1960s, a lack of accommodation currently inhibits tourism.

Many aid projects are underway in the autonomous region in the above sectors, as is work to improve its infrastructure.

In September 2019, Prime Minister James Marape announced a 10-year K1 billion (US$287 million) infrastructure plan for Bougainville in a bid to foster its economic independence.