MAC: Mines and Communities

A new mining law for Bougainville ...

Published by MAC on 2014-08-14
Source: Statement,, ABC News, Post Courier, WSJ

... but does it open the way for mining?

Why Bougainville landowners oppose Rio Tinto's return

Dr Kristian Lasslett

International State Crime Initiative

11 August 2014

Once more Rio Tinto subsidiary Bougainville Copper Limited (BCL) is in the headlines, after the Autonomous Bougainville Government (ABG) passed transitional mining legislation that seemingly continues the momentum towards the re-opening of the Panguna mine.

The legislation has provoked strong condemnation from the landowning communities that will be directly impacted by the mine's prospective reopening. They fear BCL's return is now unstoppable.

Their opposition has been given powerful form in the Parakake Resolution, and in the poignant commentaries written by the Nasioi people's own organic intellectuals, such as Chris Baria.

Bougainville's President John Momis has dismissed this opposition on Radio Australia; he claims it is being stirred up by certain backdoor mining interests.

While it is hard to know whether a particular individual has or has not signed a MOU, as Momis claims, the vast majority of people in the mine affected areas have no interest whatsoever in these backdoor players. Their opposition is principled and rooted in a history that is yet to receive the public attention it thoroughly deserves, and which if recognised would provide essential context, missing from current debates.

At the bare minimum this history extends back to BCL's so called ‘alleged' involvement in PNGDF military operations that were conducted during 1989-90, after the mine was closed by landowning communities through a campaign of industrial sabotage (although this essential history goes further back still, to the mine's construction and operation, including its seismic impact on land, environment and culture).

This remains an extremely emotive issue on the ground in the mine area, because these military operations were replete with some of the most atrocious war crimes imaginable. Indeed, they were so graphic, and so horrible, it would be insensitive to describe them here - as I have learnt the trauma survivors endure is foreboding and ever-present.

Nevertheless, respected regional commentators have cast doubt over these allegations levelled against BCL. For example the celebrated ANU scholar, Anthony Regan - who was contracted to draft the controversial mining law passed through Bougainville's parliament last week - noted in 2003, ‘despite some claims to the contrary, there is as yet no credible evidence that BCL took any direct part in the [military] operations against the BRA [Bougainville Revolutionary Army]'. Regan maintains this position today, stating ‘credible evidence is yet to emerge. Perhaps such evidence will emerge one day, but I'm yet to see it'.

Regan is a lucid and perceptive commentator with a strong devotion to the region, so it is difficult to understand how he, and other regional experts, can maintain this position, when so much compelling evidence is now publicly available, and presented in a range of scholarly publications.

Nevertheless, given the serious doubt regional experts have cast over these allegations, it is perhaps understandable that the media has failed to give them much credence.

In that light it is worthwhile bearing witness, once more, to the robust empirical evidence charting BCL's past conduct, hyperlinked where possible to the primary sources (it should be emphasised here, because there appears to be confusion, this evidence has primarily emerged from independent fieldwork, and is not in any way reliant on affidavits produced for a US class action against Rio Tinto).

It is incredible to think in light of this powerful oral testimony and documentary evidence from a range of highly credible sources (i.e. senior BCL managers, PNG government officials, PNGDF officers, BCL internal records), which are detailed in full here, that these accounts have failed to be included in the most recent public debate (although it is very much part of discussions at the village level). Indeed, certain journalists have implied the allegations against BCL are so tenuous, they have reached a point where they can ‘be put to rest'.

Of course at Panguna people need no reminding of BCL's role, they still remember the hum of BCL trucks laden with PNGDF troops, coming down the road to torch their villages.

Yet in a curious twist Bougainville's President has often said it is the communities in the mine-affected region who have specifically petitioned his office to have BCL returned as the mine's preferred operator. The phrase ‘better the devil you know' has been put on high rotation; sadly those who should know better often quote this phrase as if it is axiomatic at the village level.

It is not. In fact I have never come across a villager in the mine-affected region who uses this phrase in support of BCL's return, indeed so raw are the scars that even the notional prospect of BCL's return tends to elicit panic and near universal condemnation. Whoever presented this view to the President (we are yet to find out), was not accurately relaying the beliefs widely held within the mine affected communities.

Compounding the confusion, journalists rarely travel to these villages, relying instead on media releases and political statements. When they do, as the intrepid Antony Loewenstein discovered, a very different narrative emerges, one seared by a great yearning for cultural sovereignty and self-determination, underpinned by a painful history of dispossession and marginalisation.

Indeed, these are not a people who suffer from a ‘lack of understanding', as certain leaders have claimed (coupled to this, it has also been implied rural communities lack the ‘expertise' to determine what is in their own best interests). Villagers in the mine-affected area have a breathtakingly nuanced understanding of their past, and they fully recognise the complexity of the conjuncture they are currently faced with. It must also be said, these people are not dupes being manipulated by foreign activists (which is another condescending allegation circulating in the media); they have witnessed first-hand the destructive consequences of believing grandiose promises delivered by outsiders with ulterior motives, and as a result have an unwavering belief in the strength and vitality of their own wisdom (and quite rightly, too).

So it is time to pause for a moment, and truly listen to the voices of Panguna. It is time to bear witness to their suffering, and to hear their cries for justice. It is time to move beyond the sleek sound-bites supplied by governments and miners, and actually study the primary evidence and actually visit the communities, to allow them to speak for themselves. It is time for BCL and its parent company, Rio Tinto, to acknowledge the past and to atone without strings.

It is time for truth, it is time for justice, and it is time to respect the dignity of the land's custodians; a dignity which so many, have sacrificed so much for.

Dr Lasslett's book State Crime on the Margin's of Empire: Rio Tinto, the War on Bougainville and Resistance to Mining is available via Pluto Press.

*A special thanks goes to Bougainvillean filmmaker Clive Porabou for the image used in this piece. Clive has tirelessly shared the voice of his people with audiences around the world through the medium of film.

Rio Tinto Weighs Bougainville Copper Stake

By Rhiannon Hoyle

Wall Street Journal

18 August 2014

SYDNEY- Rio Tinto's grip on its closed Bougainville copper mine-one of the world's biggest deposits of the metal-remained firm in the 1990s throughout bloody independence clashes in Papua New Guinea.

But as the mine edges toward restarting after a quarter of a century and copper prices rise, Rio is considering heading for the exit.

On Monday, the Anglo-Australian miner said it was reviewing its options for its controlling stake in Bougainville Copper Ltd. BOC.AU +17.50% , the mining company that owns the Panguna mine in Bougainville, Papua New Guinea, after the government passed new mining laws that may strip the company of its lease on the site.

For a country best known for its jungles and tribal society, Papua New Guinea saw in Panguna a path to riches when the mine started up in 1972. The impoverished country was then still under Australian control, and had little industry of its own other than fishing the schools of tuna that swam near its shores.

However, islanders soon became envious of the revenue that was flowing to government coffers in Port Moresby rather than being used for Bougainville schools, health clinics and boosting local incomes. Those frustrations, combined with worries over the mine's poor environmental record, burst into violence in 1989 when militants forced the mine to shut down.

At the time of its closure, the mine was producing around 166,000 metric tons of copper and 450,000 troy ounces of gold annually. That is enough copper for 7.3 million typical American-made cars.

Earlier this year, there were signs the mine was on the path to being rebuilt. Bougainville Copper had been pushing forward with negotiations in recent years amid a rally in copper prices, underpinned by rising demand from China, which uses the metal in everything from apartment buildings to electricity grids.

Landowners, officers from both the Bougainville and national governments, and mining executives have been working toward a customary reconciliation ceremony known as "bel kol," which Peter Taylor -chairman of Bougainville Copper for more than a decade-says is "best translated as a cooling of the heart, or a lowering of the emotional temperature."

What became a decadelong secessionist rebellion on the island, leading to thousands of deaths, ended in a cease-fire in 1998. However, earlier this month new mining laws were passed that will devolve the power to regulate mining to Bougainville's autonomous government from the Papua New Guinea national government.

Under the legislation, Bougainville Copper-in which Papua New Guinea's government holds a 19% interest-would lose its mining lease for Panguna, which would be exchanged for an exploration license. The company would have to reapply for the lease.

"Rio Tinto has decided now is an appropriate time to review all options for its 54% stake in Bougainville Copper," said Rio Tinto, which is still reviewing the implications of the mining bill.

About 27% of Bougainville Copper is owned by private shareholders. Some economists question the viability of the mine if Rio were to decide to walk away.

"Rio Tinto is large enough to have done their sums, looking at the costs of benefits, so I don't know if we will see a new player on the scene" if they can't make it work, said Satish Chand, a professor of finance at the University of New South Wales.

Chinese buyers have proven interested in major copper deposits, though, as they look to feed a voracious appetite for the industrial metal in the world's No. 2 economy.

Guangdong Rising Assets Management has been mulling a takeover of PanAust Ltd., an Australian company that is about to acquire Glencore PLC's majority stake in the Frieda River project, another major copper deposit in Papua New Guinea.

Bougainville Copper has estimated it would take between five and seven years to reopen the Panguna mine, should it win approvals and secure financing. A 2012 study forecast a capital expenditure budget of US$5.2 billion was needed to get the site back into production.

It also estimated there was at least another 5 million tons of copper and 19 million ounces of gold to be mined at the site, sustaining operations for more than two decades.

But many landowners oppose the reopening of the mine, and have been demanding more compensation for past environmental damage along the Jaba River.

"At the moment, a lot of income is earned through exports of cocoa, and the government will need to look at the impact the mine, and so-called Dutch disease, may have on agriculture," said Mr. Chand.


Papua New Guinea new mining law takes away Rio's subsidiary rights

Cecilia Jamasmie

11 August 2014

Papua New Guinea's autonomous region of Bougainville passed Friday a new mining bill that strips significant rights from Rio Tinto's subsidiary Bougainville Copper Limited.

The ruling formalizes the province's control of its own resources, which means the national PNG mining law no longer applies and that the agreement under which Bougainville Copper ran the Panguna open cut copper and gold mine for 20 years has been eliminated.

According to Radio Australia, locals worry the legislation -which transfers powers over mining from the Papua New Guinea government to the local legislature - gives too much power to Australian copper, gold, and silver company Bougainville Copper, whose Panguna mine sparked a civil war in the 1990's and has not seen mining activity since then.

The internal conflict, which came about in part due to a demand from Bougainville rebels for higher mine royalties, and their anger at alleged environmental destruction, resulted in an estimated 10,000 to 15,000 deaths.

Philip Miriori, Chairman of the Me'ekamui Government of Unity, a rebel group based near the mine site, told Radio Australia the legislation was "dangerous" and "potentially destabilizing."

But Bougainville President John Momis defends it: "I firmly believe that we have done has been practicable," he told Island Business, adding the law is a "transitional" one and that the long-term law is still being developed.Proposed

New legislation strips rights from Rio Tinto's subsidiary Bougainville Copper

ABC News -

12 August 2014

Bougainville President John Momis says his new Mining Act, passed on Friday, strips significant rights from the Rio Tinto subsidiary Bougainville Copper Limited, but he is still facing stiff criticism from grassroots organisations.

The main aim of the legislation is to transfer powers over mining from the Papua New Guinea government to the local legislature.

But many people on the island fear it gives too much power to Bougainville Copper, the company that ran the Panguna copper mine that sparked the civil war in the 1990's.

Philip Miriori, Chairman of the Me'ekamui Government of Unity, a rebel group based near the mine site, says the legislation is dangerous and potentially destabilising.

The Panguna Veterans Association says it will lay the foundations for a repeat of the crisis which left thousands dead.

Bougainville's President John Momis says the critics have got it wrong.

He told Jemima Garrett the new mining legislation strips away most of Bougainville Copper's rights and has wider significance as well.

Presenter: Jemima Garrett

Speaker: John Momis, Bougainville President

Bougainville House passes historic mining bill

Post Courier

11 August 2014

BUKA, PNG --- The passing of the Bougainville Mining (Transitional Arrangements) Bill 2014 by Bougainville Parliament on Friday was an historic occasion for the Autonomous Region.

The bill's passing completes the drawdown of mining powers from the national Government.

The symbolic and practical significance of this event is clear - the 10-year Bougainville Conflict was sparked by the giant Panguna Copper Mine which was closed down by dispossessed landowners.

As such, mining is an emotive issue for Bougainvilleans with up to 20,000 having died as a result of the Conflict.

The bill, in its fourth draft when passed, is the result of comprehensive community consultation, including wide-ranging forums and workshops.

It has been a long battle for Bougainville President John Momis who, with his team, has developed and pushed forward the bill over the past two years, changing it and tailoring it to fit the needs and expectations of the greatest possible amount of Bougainvilleans.

Despite this, not all are satisfied, with an angry protest being held outside Parliament last Tuesday when the bill was originally supposed to have been put before the House.

But the president strenuously defended it, saying "I firmly believe that we have done has been practicable". He explained it is a "transitional law" and that the long-term law is still being developed.

Momis said he expects the final bill to be ready by early next year after further community consultation.

In a stirring speech to Parliament on Friday, the president said "as we all know, Bougainville has bitter experience with previous mining laws that were applicable to Bougainville".

After outlining the ills caused by of past mining laws imposed upon Bougainville, he went on to say "mining can occur only if it is done in ways that respect our people's rights, brings as many benefits as possible and does the least amount of damage to our land, environment and culture".

The bill is considered a world-first in the unprecedented rights it gives to landowners.

"We are especially proud that the bill is completely unique in the world in the focus it gives to protecting the interests of the people of Bougainville," Momis said.

"Customary owners will have many rights."

Rio Tinto to dump toxic Panguna waste into Augusta Bay?

Ramumine Wordpress

6 August 2014

The first time Rio Tinto operated the Panguna mine on Bouganville they destroyed the Jaba river by dumping toxic mine waste straight into the river, and that led to a terrible conflict in which thousands lost their lives.

Twenty years later local people are still suffering from the ongoing pollution of the river system.

Now, as Rio Tinto tries to maneuver to reopen the Panguna mine, it has persuaded PNG's Constitutional and Law Reform Commission not to recommend a ban on the marine dumping of mine tailings.

Eric Kwa, the Commission Chairperson has revealed the Commission was considering a ban on marine dumping to go alongside its recommendation for a ban on river waste dumping, but Rio Tinto persuaded it otherwise. When asked on Radio Australia whether the Commission was recommending a ban on both riverine and deep sea disposal, Kwa replied:

Ah no, deep sea we did not propose the banning of it, basically because from the current technical advice that we have been given, deep sea tailings is moderately acceptable and given the current geographical and geological situation in Papua New Guinea, that particular option would be more acceptable. And in fact, one of the large mining companies suggested to us that we should ban river iron tailings, but deep sea we could approach it more cautiously and that's the Rio Tinto. They came up with some very interesting suggestions on handling this particular issue

Now, given the Panguna mine on Bougainville is the ONLY mine in PNG that Rio Tinto currently has any interest in, what should we conclude from their intervention?

It certainly look as if Rio Tinto, if allowed to reopen the Panguna mine, will dump the toxic tailings straight into the beautiful Augusta Bay!

Rio Tinto's Coup - The Bougainville Mining (Transitional Arrangments) Bill 2014

Barry Lalley

Ramumine Wordpress

7 August 2014

Rio Tinto may have lost the battle in 1990, if the Bougainville Mining Bill is passed, they have won the war.

The key section announcing the coup is buried right at the end of the bill. If passed, Rio Tinto's special mining lease will be converted into an exploration licence, which can then in turn be re-converted into a mining lease under the law.

Why is this a coup? Surely this is a loss for Rio Tinto? Well ...

Under the proposed law, the ONLY enforceable right landowners have is to withhold consent for the grant of an exploration licence. After an exploration licence has been granted the ABG can over-rule their wishes at all stages of the process.

So under the transitional arrangements Rio Tinto will see its lease convert AUTOMATICALLY into an exploration licence, whether the landowners like it or not. Rio Tinto has, in other words, been allowed to circumvent the one enforceable power landowners have.

As a result, once passed, the ABG will have full authority to reopen the Panguna mine, no matter what the mine-affected communities think about it. A very nice coup for Rio Tinto.

The offending section is included below (and it must be read in light of section 15).



(1) This section applies to a special mining lease granted, renewed or continued in existence under the Mining Act 1992 or any other law in respect of land situated in the Autonomous Region of Bougainville and in force immediately before the commencement of this Act.

(2) On and after the commencement of this Act:

(a) the special mining lease ceases to be in force; and

(b) the company that was the holder of the special mining lease immediately before the commencement of this Act becomes by force of this section the holder of an exploration licence within the meaning of this Act in respect of the area to which the special mining lease applied.

(3) The company referred to in subsection (2) may apply under section 70 for the grant of one or more mining leases.

(4) To avoid doubt, section 66 applies to the grant of a mining lease.

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