Copper price puts focus on disputed mine May 9, 2008
BOUGAINVILLE COPPER is back on Rio Tinto's agenda.
It has been nearly 19 years to the week since the contentious operation in Papua New Guinea closed after the outbreak of a civil war on Bougainville Island.
But amid record copper prices, the chairman of Bougainville Copper, Peter Taylor, broached the possibility of reopening the Panguna mine at the Rio subsidiary's annual meeting in Port Moresby yesterday.
He said Rio's technology and innnovation group last month began a study into a potential reopening even though the company has not been allowed access to the damaged site. The study should be completed in August.
Rio estimates it could process 20 million to 50 million tonnes of material annually from the low-grade copper and gold mine, which would produce between 80,000 and 200,000 tonnes of copper a year.
During its 17 years of operation, the mine produced 3 million tonnes of copper and accounted for about 44 per cent of PNG's exports over the period.
"There has not been a more favourable time since mine closure to assess the economic feasibility of restarting and operating a large copper mine on Bougainville," Mr Taylor said. "World demand for copper - particularly in China - has created an unprecedented opportunity for Bougainville to kick start its economic growth through mineral resource development."
He said the Autonomous Bougainville Government and the national Government of Papua New Guinea had made significant progress toward resolving the political and administrative issues associated with the future of mining and exploration on the island.
Mr Taylor said it would be impossible to calculate the costs of reopening the mine without firsthand knowledge of the state of the site. But there is speculation it could cost well in excess of $US1 billion ($1.05 billion) to restart operations.
Mr Taylor said the mine retained 691 million tonnes of mill feed at 0.4 per cent copper and 0.47 grams per tonne of gold, and "significant infrastructure" - including an access road and port - at the site.
He said the company hoped to enjoy better community relations than it did the last time around, and noted the redevelopment would bring a wide range of business opportunities to the island. He said Bougainville Copper would this year place a priority on formal engagement with landowners and advancing the reconciliation process.
But despite Mr Taylor's optimism, at Rio's annual meeting in Brisbane last month, its chief executive, Tom Albanese, said that there were no plans to reopen the Panguna mine in the "near future".
Rio has recently highlighted its large pipeline of copper development projects as part of its ongoing effort to fend off an unwanted bid from BHP Billiton, but it has not mentioned Panguna in those presentations.
Bougainville Copper shares closed 4c higher at $1.05.
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