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Mine shares row leads to threats to deny licence

Thursday 1 September 2016 | Published in Regional


BOUGAINVILLE – The Autonomous Region of Bougainville is engaged in a new struggle with the Papua New Guinean government over the ownership of the island’s controversial Panguna copper mine.

Disputes over the Panguna mine sparked a decade-long armed insurgency that cost an estimated 20,000 lives.

PNG’s Prime Minister wants to give landowners on the island a minority shareholding in Bougainville Copper Limited (BCL), the company which operated the mine.

This would prevent the Autonomous Bougainville Government (ABG) from having a controlling share.

Bougainville’s president has responded by threatening to cancel the Australian-listed company’s exploration licence.

BCL holds the only exploration licence over the large copper deposits around the former Panguna mine, and also holds valuable drilling data that any company wanting to mine the area would need.

Bougainville’s President John Momis said that would count for little if the PNG government refused to hand over a controlling interest in the company.

“The ABG will have no option but to cancel Bougainville Copper Limited’s licence, and when that happens, then you’ll have a lose-lose deal,” he said.

The PNG government has long held 19 per cent of the BCL shares.

Mining giant Rio Tinto had 53 per cent, and recently decided to get rid of its interest.

It gave the Bougainville Government 36 per cent and the PNG Government an extra 17 per cent to give both parties an equal shareholding.

But on August 17, Papua New Guinea’s Prime Minister Peter O’Neill announced the national Government would give the extra 17 per cent to unspecified landowners of the mine area.

“We have given our shares to the landowners,” he said.

“The ABG will keep theirs, we will keep 19 per cent, an 17.4 per cent that was gifted to us by Rio Tinto will be now given to the landowners and the people of Bougainville.”

The decision infuriated the Bougainville government, which has passed its own Mining Act and taken responsibility for the complex negotiations with the various landowner groups and former combatants in the conflict.

Momis said landowner groups were rejecting the government’s offer of share ownership because it would lead to further disputes.

“We’ve been dealing with them and their representatives unanimously resolved that 17 per cent should go to the ABG,” he said.

Part of the peace agreement to end the Bougainville crisis was the promise of a referendum on Bougainville’s independence, which is scheduled for 2019.

But many people in Bougainville think the province would need the revenue from a restarted Panguna mine if it was to secede.

Bougainville’s Mining Minister Robin Wilson said the Prime Minister’s handling of the shares could be designed to weaken the case for independence.

“I think it’s a political move and I’ve been suspecting all along that there is this kind of thinking in the national government that if Bougainvilleans take over Panguna mine on their own, it will boost their chances of getting independence,” he said. - ABC