Mining To Restart On Bougainville?Published by MAC on 2006-12-06
Source: DOW JONES NEWSWIRES
Mining to restart on Bougainville?
By James Attwood
DOW JONES NEWSWIRES
6th December 2006
SYDNEY (Dow Jones)--Papua New Guinea's government expects to agree terms with Bougainville authorities next year to lift a moratorium on mining in the battle-scarred island and resume operations the following year.
"Give us two years and mining will restart in the Panguna mine," PNG mining minister Sam Akoitai told Dow Jones Newswires Tuesday.
Anglo Australian miner Rio Tinto Plc. (RTP) shut the massive Panguna copper and gold mine in May 1989 after repeated attacks on infrastructure and workers by secessionist rebels.
Speaking on the sidelines of a PNG mining conference in Sydney, Akoitai said both the Bougainville autonomous government and foreign investors are keen to resume activities in the minerals-rich South Pacific island once fiscal arrangements are agreed.
"Bougainville is a place where every man and woman will swim across to," he said, when asked about the current level of investor interest.
"I've been approached by many many companies who are interested in doing exploration in Bougainville and also companies interested in talking about Panguna," he said.
"But my approach would be I'd rather work with the devil I know than getting somebody new to come in and start again," he said, referring to Rio Tinto subsidiary Bougainville Copper Ltd. (BOC.AU)
"I've had the opportunity to work with Bougainville Copper for nine years and think they're doing a very good job."
Besides holding the position of PNG national mining minister, Akoitai is also the parliamentary member for Central Bougainville.
Panguna produced about 180,000 tons of copper a year to rank as the world's third-largest copper mine. It remains closed despite a 1998 cease-fire and the formation of an autonomous island government.
Any decision on resuming mining at the dismantled operation is estimated to cost around US$1 billion.
Before any decision can be taken, however, stakeholders must complete a review of new fiscal and operating terms for exploration and mining on the island, Akoitai said.
The long-delayed review process is expected to begin in the first quarter of next year and take "months" to complete, he said, adding the benefits for Bougainville would have to be significantly better than current terms.
"It's an issue close to me. I'm from Bougainville and I also represent the electorate where the mine is. I would want the review process to be concluded quickly so we can decide the future of mining in Bougainville."
"The whole reason the government in Bougainville asked for this review process to began is so we can sort out the outstanding issues and then perhaps start mining from a clean sheet."
Benefits for the local community would have to be in line with new benchmarks of modern mines, he said, without elaborating.
Akoitai said Australia's Ord River Resources Ltd. (ORD.AU) and Gallipoli Mining Pty Ltd are among companies to make recent approaches to authorities on the possibility of exploring in Bougainville.
-By James Attwood, Dow Jones Newswires; 612-8235-2957;