MAC: Mines and Communities

Bougainville: Beyond the Valley of Tears

Published by MAC on 2011-12-12
Source: Asia Sentinel (2011-12-05)

There have been many months of speculation as to whether Bougainville's government, with the backing of Papua New Guinea, will allow the notorious Panguna mine to re-open. See: Re-opening of Panguna Mine is not negotiable

Last month, Bougainville Copper - a subsidiary of Rio Tinto - re-applied for a 21-year extension of the mining lease after the original had expired.

In the following article, Catherine Wilson, a correspondent for the well-reputed Asia Sentinel, sets out the dilemmas faced by Panguna landowners as they weigh up the possible consequences of mining returning to their territories.

Beyond the Valley of Tears

By Catherine Wilson

Asia Sentinel

5 December 2011

Nestled in a remote valley in the forested mountains of Panguna in Central Bougainville, an autonomous island region in Papua New Guinea (PNG), is what was the world's largest open cut copper mine. However, a local tribe called the Nasioi in the 1980s became the world's first such people to shut down an international mining operation in a dispute over environmental destruction, exclusion from consultations and exploitative benefit distribution.

Panguna mine on Bougainville
Panguna mine on Bougainville - Source: The National

More than 20 years later, customary landowners and the Autonomous Bougainville Government (ABG) are preparing to decide if the controversial Panguna mine will reopen. The Panguna copper mine opened in 1969 during Australian administration of the island as a UN Trust Territory. Local landowners were excluded from the mining agreement between the Australian government and Conzinc Rio Tinto Australia (CRA), endured forced community evictions and watched as mine tailings contaminated agricultural land and the nearby Jaba and Kararong rivers, killing fish and poisoning water supplies. The operating company, Bougainville Copper Ltd (BCL), is predominantly owned by Rio Tinto (53.6%) and the PNG Government (19.1%).

According to an Aid Watch report in 1997, "Of the $1700 million profit the mine generated between 1972 and 1989, the PNG Government received 61.4%, private investors received 32.8% with the traditional landowners obtaining only 1.6%."

In 1989 the Bougainville Revolutionary Army (BRA) blew up the mine's power pylons following BCL's refusal to pay local landowners 10 billion kina compensation. A ten year civil war followed between the PNG Defence Forces, BRA and other armed groups on the island resulting in the ruination of towns and villages and estimated death toll of 20,000.

Access to the Panguna mine today is via a checkpoint manned by the Mekamui, who comprise former revolutionary fighters, and a winding road to the top of the Crown Prince Range where the stark edge of the mine pit, 6km long, is visible through the dense forest.

The road down the other side enters a broad landscape of gutted mine buildings, silent rusting trucks and mine machinery. Lynette Ona, Panguna landowner and niece of Francis Ona, former leader of the Bougainville Revolutionary Army, calls it the ‘valley of tears' in reference to Richard West's unflattering history of mining company, Rio Tinto, entitled ‘River of Tears.'

While the decade long conflict remains vivid in people's memories, indigenous landowners are quietly protecting their communities and attempting to regenerate land. Vegetation is encroaching into the mine pit, a reminder that its excavation necessitated the removal of an entire hunting forest which provided surrounding villages with cuscus and wild pig.

Early in the morning, the dawn breaks clear over the valley where, twenty years ago, villagers contracted and, in some cases, died of asthma due to the profuse dust and endured excessive noise during the mine's round the clock operation. Today the tranquillity is disturbed by the sound of birds, families busy preparing food, cultivating vegetable gardens and carpenters adapting ruined buildings into family dwellings.

The people of Panguna, who already know the human cost of competition over access to land and natural resources, predicted to intensify as the world's population rapidly increases, are contemplating how much their lives will change again if mining is allowed back on their land.

For islanders, priorities include both economic development and preservation of environment and culture.

Since the 2001 Peace Agreement ended hostilities, the island's reliance on international aid with limited financial assistance from the PNG Government has seen a slow recovery of infrastructure and public services. Long term political and social stability is now dependent on the ABG guiding equitable development on Bougainville where the population has doubled in the past decade, 97% of people reside in rural areas while most services are centred in the northern town of Buka, and approximately 43% of the population is under 15 years.

Weapons disposal and reconciliation between parties to the civil war is ongoing, but David McLachlan-Karr, UN Resident Co-ordinator in PNG, has stated that: "People will not give up their guns unless they are certain of a stable and prosperous future."

The ABG, which held preliminary discussions this year with BCL Chairman, Peter Taylor, believes substantial revenues from the Panguna mine will build an economic base ahead of a referendum on political independence from PNG by 2020.

There is also intense international interest in the mine, especially from rapidly growing countries in the Asia Pacific, such as China, seeking new sources of raw materials. BCL estimates Panguna contains reserves of 3.5 million tonnes of copper and 12.7 million ounces of gold.

On the expiry of BCL's forty two year licence for the Panguna Special Mine Lease on 24 November, the company submitted an application for a 21 year extension to the PNG Government.

Chris Damana, Interim Chairman of the Panguna Landowners Association (PLA), an umbrella organisation representing landowners from six mine lease associations, said that factors in their consideration of BCL's application will include the company's plans to execute an environmental cleanup, ensure no further damage to customary land, respect the location of current communities, the rights of customary landowners as resource owners and agree to an equitable share of the mine's revenues.

The critical role of the ABG in co-ordinating the landowners input and setting the agenda for discussions will depend on its ability, as a new government set up in 2005, to build the capacity of its mining department to a sufficiently qualified level and implement mining laws and powers in advance of critical decisions.

At present, it is developing new land policies based on traditional concepts of land ownership, while new mining laws are being drafted in association with the World Bank. Mining powers and functions will be transferred from PNG to the Bougainville government after new mining laws are established.

Once an independent environmental study of Panguna has been completed, the ABG and PLA will participate in a review of the Bougainville Copper Agreement with BCL and the PNG Government.

According to a PLA briefing document: "A decision needs to be made soon about the future of the mine so environmental damage, site stabilisation and other outstanding issues can be dealt with properly. In addition, for planning purposes, the ABG and landowners need some certainty about whether or not Panguna mine revenues will be available."

Outstanding issues include compensation for destruction during the mine's former operations.

"We must look at those issues, like K10 billion [compensation] still stands, and the damage and the killings of the islanders," said Lynette Ona, "Nobody has paid that compensation. If the landowners say the company can come and dig the mine, then the rebels will say, well, did you already pay my brothers who died for the crisis and there will be another crisis again."

A core issue for many landowners is the potential loss and degradation of land, which is a major source of livelihoods.

"My concern is that there won't be enough land," said Joanne Dateransi, from Guava Village, located near the rim of the mine pit, "Because Bougainville is only a small island. There is a big scar here and we don't want the same thing to happen again in the future."

According to Panguna District Chief, Greg Doraa, traditional thinking promotes the importance of conserving mineral resources below the ground for future generations and he believes that economic development through agriculture and tourism must be explored first.

"We can export taros and sweet potatoes, bananas, water, lots of things," added Dateransi, reflecting the diversity of local opinion about whether large scale copper mining is the right choice for the island, "We can use those things to boost our economy in Bougainville."

Bougainville was the largest cocoa producer in Papua New Guinea prior to the civil war, and production has recovered impressively with an output of 15,000 tonnes in 2007.

If the Panguna mine reopens, there will be many challenges for the ABG and landowners, including mitigation against Dutch disease *, ensuring transparent use of government revenues and their benefit to all islanders, maintaining the healthy competitive state of other local industries and addressing the impact of mining on currently unsustainable levels of deforestation and resource extraction in the region.

Over the ten year period, 1990-2010, PNG lost 8.9% of its forest cover due to large-scale logging, mining and the land pressures of a rapidly increasing population. This is a serious challenge for an island state already experiencing impacts of climate change and alarming rates of natural resource depletion.

As the sun set quickly over Panguna and the generator kicked in to bring light to our dining table on the second floor of a ruined mine building, now a home dwelling, Philip Takaung, President of the Panguna-based Mekamui Government, which retains control of the mine, spoke of another possible future. Takaung envisions this beautiful valley as a tourist destination to promote the local history, natural beauty and indigenous communities and cultures of the area to regional and international visitors.

There is no shortage of people on Bougainville with the inspiration to imagine not one, but many possible paths to a prosperous and peaceful future.

* Editorial note: Dutch disease, aka the "resource curse", is a term used to describe a state's over-reliance on the exploitation and export of its raw materials, which leads to gross distortions of local economies, with often disastrous consequences for its citizens

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