from http://www.thenational.com.pg/081507/editorial1.htm Friday, October 12, 2007
Air of unreality over Bougainville Copper
NOT long after the first sitting of the Autonomous Bougainville Government, it became clear that the reopening of the Bougainville copper mine could be critical to a rapid improvement in living standards.
The Bougainville Assembly began at an early stage to canvass this possibility even though many on the former war-torn island remain wary of mining.
Nevertheless, a number of reports have suggested the ABG has done a deal with a Canadian financial group and at least one Australian company appears to have held hopes of getting some kind of mandate on reopening of the mine.
Many thousands of kina have also been wasted on a fruitless trip of ABG representatives and others to the big Batu Hijau copper mine in Indonesia on the assumption the PNG visitors would learn how the environmental impacts of mining can be managed.
Many of these activities have literally put the cart before the horse, much in the way of the ABG demand to take full responsibility for granting of mining rights. Why? As far as Bougainville, the rest of PNG and the world is concerned, the historic mine, one of the largest of its kind in its hey day, is still in the “no-go zone”.
Why would any sane company executive invest hundreds of millions of dollars on a mine that they cannot even get to see much less have an assurance that they can access?
ABG President Joseph Kabui was reported last week to have made moves to meet with Rio Tinto’s chief executive Tom Albanese to formalise its legal disengagement from the abandoned mine at Panguna.
This is a decidedly unfriendly gesture since Rio Tinto remains the majority shareholder of Bougainville Copper Ltd, with a 53.58% stake.
Has this stance been taken because the ABG has some reason to believe that some other consortium will be able to match or exceed what Rio Tinto might be able to provide in reopening the mine?
At this stage, this seems pretty unlikely. Few mining companies in the world have the range and depth of expertise contained within Rio Tinto or the capability to match its financial capacity.
It seems the ABG would like to make Rio Tinto the scapegoat for the civil war that struck the North Solomons province, when it was more like the meat in the sandwich.
Some 18 years since the shutting down of the Bougainville mine, BCL continues to be cited as PNG’s pre-eminent example of a company that carried out exemplary training programmes for Bougainvilleans and Papua New Guineans.
Thousands had gained skills as tradesmen and professionals at the Panguna operation and its success in that regard was raised by several speakers at last year’s PNG Mining and Petroleum conference in Sydney.
The conflict between the Bougainville provincial government and the National Government in the lead-up to the mine closure had occurred despite the company’s support for the provincial government position that the National Government should meet with it.
Some of the people at the helm of CRA, which eventually merged with Rio Tinto, were icons in the world of mining, many with hands-on experience in Bougainville.
They did the best they could under prevailing conditions and, prior to closure of the mine, a pipeline had been built so mine tailings would bypass the Jaba River and flow straight to the ocean.
If it had been able to operate, the Jaba River is likely by now to have virtually returned to the near pristine condition it reportedly is in today.
The ABG has probably not been able to ponder the reality that no matter which company takes over the mining operation today, it is unlikely the same level of potential benefits would flow from the operation as they once did.
Despite the much bigger potential revenue flows due to higher copper prices – it will cost around US$1 billion to reopen the mine – no new owner is likely to match the effort put in by BCL to train Bougainvilleans and Papua New Guineans on the acquisition of new skills.
ABG’s inability to come to grip with today’s realities, in terms of the Bougainville mine, will mean that many other parts of PNG will experience much more rapid progress than is likely to occur in Buka and Arawa in the coming five years.
(Sir) Lunchalot Scoffer Extraordinaire
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