Panguna promisingPublished by MAC on 2006-09-09
9th September 2006
Robin Bromby, The Australian
MAY 15, 1989, was the last day of operation at the huge Panguna copper mine on the Papua New Guinea island of Bougainville. Since then its owner, Bougainville Copper, 53.6 per cent owned by Rio Tinto, has been largely reduced to watching the chaos on the island and the deterioration of the mine while rebel forces held sway.
At a time when the mining industry worldwide is desperate for new exploration frontiers, the restoration of some order has suddenly made Bougainville the subject of a great deal of interest. Panguna, of course, is on the top of many lists, but those with longer memories may recall that in 1985-86 the then CRA did a very extensive geological study of the island - and came up with a large number of several interesting targets, none of which has been followed up.
So expect the would-be explorers to start lining up. In fact, a few already have. An unlisted Canadian company, Invincible Resources, has reportedly donated 20 million kina ($10.5 million) to the Autonomous Bougainville Government as a gesture of goodwill - Invincible no doubt expecting it will be in pole position when the exploration licences get handed out. No one knows much about this Canadian company, even though Bougainville Copper and others have been inquiring.
Also interested is Sydney-based Ord River Resources, which has had some talks with the new Government. Ord River is really acting as point man for its 20 per cent shareholder. China NonFerrous Metals is keen to lay its hands on any new copper, lead, zinc, gold and nickel/cobalt plays. Panguna would be too big a bite for a company like Ord River on its own, but Chinese financing for the redevelopment of Panguna is not an outrageous thought - just think of China Metallurgical Construction teaming up with Highlands Pacific and providing the $1.15 billion for the huge Ramu nickel-cobalt project.
But Bougainville Copper has no intention of letting Panguna go without a fight. And, after years of despair, it now believes there is a real chance it could get the mine back. Its optimism is buoyed by two things: it could lay its hands on the $1 billion needed to reopen the mine and, even more important, it has all the geological data. Anyone else trying to rebuild Panguna, it believes, would have to spend years just working to understand the ore body.