Compensation sought over Bougainville mining law
A group of minority shareholders in Bougainville Copper Ltd are crying foul over Bougainville's new mining law and say they want billions of dollars in compensation.
Transcript
A group of minority shareholders in Bougainville Copper Ltd are crying foul over Bougainville's new mining law and say they want billions of dollars in compensation.
Under the new law, the autonomous Papua New Guinea province has stripped Bougainville Copper or BCL of its exploration and mining licenses but has given it first right of refusal when negotiations over new licenses get underway.
The president of a group of BCL's European shareholders Axel Sturm says the group wants the major shareholder Rio Tinto to take legal action against not only the Papua New Guinea government and the province but local landowners with BCL leases and former leaders of the Bougainville Revolutionary Army.
He told Sally Round the new law is an unfriendly gesture after 25 years of investment in Bougainville.
AXEL STURM: I consider this more or less as an attempt at blackmail for getting more money from the company. We already invested a lot of money, a lot of that money was lost because unlawful people destroyed our equipment. The value today is around about six billion US dollars, so if we go back to Bougainville and reopen the mine we have to invest another six billion US dollars to reopen the mine and clear the mine site. So it's rather annoying when we see the ABG and the landowners, a small group of landowners opposing Bougainville Copper because they have their own agenda. And this own agenda is in so far as we can see from here, there are small scale miners behind that who earn a lot of money by panning gold and the rivers and by using mercury and poisoning the environment and themselves.
SALLY ROUND: So you say that if you were able to continue mining, you would be more environmentally responsible?
AS: Of course, Rio Tinto, and Bougainville Copper is a subsidiary of one of the most environmental caring companies in the world.
SR: Now the Bougainville authorities say they don't anticipate legal action from Rio Tinto, from shareholders, because the new law allows for BCL to be the first cab off the rank in new negotiations with the people.
AS: Well what I am saying first of all is that we are backing Rio Tinto and checking all options that they have and what is happening actually is that the ABG tries to expropriate the company or to blackmail the company to do only what they want and they are not able to handle such a huge mine. In fact the worst case would happen that BCL would have to leave Bougainville forever. One thing is for sure no other honest mining company will go into Bougainville and invest in Bougainville, that is for sure. And the future, and the expected independence of Bougainville will be very far in the future, if ever, because they won't have enough revenue from small scale mining, from rice plants, from coconut, fishing, or tourism, and I even doubt if tourists would like to go to Bougainville because the situation on the ground, so far as security of tourists is not as good as it should be for international tourism.
SR: Yet the people of Bougainville might very well decide that they want BCL to be involved, aren't you getting a little bit ahead of yourself here?
AS: Not really, because I see more and more upcoming voices in Bougainville who want small scale mining because they earn a small amount of money with that and they are happy with that.
SR: So now you're urging Rio Tinto to take legal action over the new mining laws, what's the chance of that?
AS: We are urging Rio Tinto to consider legal action on the actual case and we evaluated a little bit the worth of compensation we asked for, if in fact our leases were to be prolonged for another twenty years, would be stopped. And we want compensation for the losses we had during the twenty five years of the Bougainville crises, which was not caused by Bougainville Copper, it was simply caused by the Papua New Guinea people themselves, because for example, the royalties disappeared in between Port Moresby and Bougainville, so money was paid by our company in Port Moresby and then the money vanished on the way to Bougainville. What we want is that the royalties we pay to our landowners are paid to them and don't disappear somewhere in Papua New Guinea on the way to the landowners.
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