16 Jul 2013

Mining shareholders dismiss Panguna compensation suggestions

5:18 pm on 16 July 2013

As a possible re-opening of the Panguna copper and gold mine in the Papua New Guinea province of Bougainville looms one vested interest group is signalling its not happy with talk of compensation being sought.

At a series of fora around the province the Autonomous Bougainville Government has been explaining its mining legislation and seeking the reaction of Bougainvilleans to a re-opening of the mine, which 25 years ago sparked the civil war.

A re-start of the mine is considered vital for sparking the moribund Bougainville economy, especially as it counts down to a vote on possible independence, likely within three years.

There is significant support for a re-opening but with provisos that compensation be paid and rehabilitation undertaken.

The president John Momis says these issues have already been broached with the company, Bougainville Copper Ltd, whose executives will not be surprised by the conditions.

The head of a group representing minority shareholders, Axel Sturm from the European Shareholders of BCL, says they support a relaunched mining company building roads and hospitals but dismiss suggestions it should pay compensation. He spoke to Don Wiseman.

AXEL STURM: We shareholders - as I understand, Rio Tinto, also, is a major shareholder - we are OK to invest another US$5 billion into the mine. And I think that is more than enough compensation for a situation that was not caused by Bougainville Copper.

DON WISEMAN: Whatever has happened has happened. The condition that the people of Bougainville are putting on it is that there is compensation paid before you move to Stage 2, which might be the reconstruction. So my question is whether you would support that, and you sound to me like you're not happy with that idea.

AS: No, I'm not happy with the idea to give recompensation in the form of money. Rebuilding former structures - that is clear that we would back that - but we would not back to give the Bougainvilleans money so they go away to Australia or elsewhere in the world and spend the money there, instead of staying on the island and working for the future of the island.

DW: That would be your condition? If they got compensation money it would have to be spent on Bougainville?

AS: No, compensation money [would be] in the form of investment on Bougainville. That may be hospitals, schools, roads or whatever, but not in the form of money to single persons who then go away from Bougainville. That we will not back. We are backing everything which is for the benefit of Bougainville, but not for the benefit of single persons on Bougainville. And it's always the same situation in the past, that single persons try to get advantage, and others - poorer people - stay poor. That's a problem.