The prospects for a reopened Panguna copper mine have been boosted by a ‘joint resolution’ signed by landowners and the Autonomous Bougainville Government (ABG).
The Panguna mine
The Panguna mine has been closed since 15 March 1989, following extensive civil unrest.
According to the Autonomous Bougainville Government, the resolution was signed by ‘clan chiefs and representatives from the five major clans of the Panguna area – Basikang, Kurabang, Bakoringu, Barapang and Mantaa’ following a three-day summit last week week.
The Panguna was one of the world’s largest copper mines when operational and, at one point, accounted for two-fifths of PNG’s GDP.
The asset has been valued at A$75 billion (K204 billion) and holds estimated reserves of one billion tonnes of copper and 12 million ounces of gold.
Independence tool
Credit: ABG
The ABG is currently in negotiations with the PNG’s national government regarding independence for the autonomous region, whose people voted almost unanimously for independence at the end of 2019.
The Panguna mine is considered Bougainville’s major economic asset, with its revenues essential to support an independent nation.
‘Today marks the ending and the beginning of a new chapter, a chapter to realise Bougainville’s independence,’ said ABG President, Ishmael Toroama, in a statement.
The ABG has committed itself to work together with the landowner groups ‘to facilitate the process towards the re-opening of the mine’.
Developer
The announcement has also put a focus on which company might develop the mine, should it reopen.
Bougainville Copper Limited (BCL), the company that held the mining lease to Panguna when it closed back in 1989, is a potential front runner, although other mining companies have expressed interest in recent years.
In 2018, the ABG sought to end BCL’s exploration rights at Panguna – a move BCL took to PNG’s National Court.
BCL is now jointly controlled by the PNG State and the ARB-owned Bougainville Minerals Limited, which both own a 36.4 per cent share in the company.
Shares in the company are also still traded on the Australian Securities Exchange. Today, BCL’s shares rose 122.5 per cent in value.
In a statement to the ASX, BCL observed that, if the resolution was reported fairly, ‘this would appear to demonstrate unity amongst the landowners and would also boost confidence in the Autonomous Region of Bougainville as it pursues economic independence.’
It clarified BCL was not involved in the landowner summit and stated that ‘the Judicial Review of the ABG’s decision not to renew the Exploration licence over Panguna remains in process and we anticipate proceedings to commence in the first quarter of 2022.’
It has been estimated that the investment to get the mine production-ready again would be about K16.3 billion (AUD$6 billion).
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What could possibly go wrong ? For goodness sake.