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Thomson Financial News

Huge Papua New Guinea copper mine could be reopened, says minister
04.01.08, 3:58 AM ET


SYDNEY (Thomson Financial) - One of the South Pacific's largest copper and gold mines, which was at the center of a decade-long secessionist war, could be reopened, the Papua New Guinea government said on Tuesday.

The huge Panguna mine on PNG's most eastern island, Bougainville, was forced to close in 1989 after continuous attacks by secessionist rebels in a war that cost an estimated 10,000 lives.

As part of a peace agreement, Bougainville was granted autonomy by the PNG government in June 2005, but the island has struggled financially and been plagued by poverty and law and order problems.

For the past 18 months, Bougainville's autonomous government has been seeking to gain control of the island's mining powers and functions from the PNG government.

PNG mining minister Puka Temu said Tuesday he had signed a memorandum of understanding with Bougainville President Joseph Kabui for a 15-step process which will see mining, oil and gas powers handed over to the Bougainville government.

Temu told Agence-France Presse the agreement would see both governments working together to lift the moratorium on mining and reopen the Panguna mine.

'It's got another 15 to 20 mining years left, there's an enormous deposit still there and we have now basically agreed to start bringing the reopening of the Bougainville copper mine to the table,' he said.


Temu, who is also PNG's Deputy Prime Minister, said the national government would retain a stake in future profits from the mine and other resource projects.

Rio Tinto-controlled Bougainville Copper (BOC) owns the mine, which is now covered in tangled vines and rusting equipment.

Estimates by brokers of the cost of reopening the six-kilometer wide pit come in at more than $1.5 billion.

BOC chairman Peter Taylor has said repeatedly that the company is keen to talk to the autonomous and national governments and local landowners, to 'discuss what they want for the future'.

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