BCL fully focussed on a return to mining on Bougainville

Transcript

The autonomous government in the Papua New Guinea region of Bougainville sees a return to mining as a key to developing its economy, and a possible re-opening of the huge Panguna mine is part of that.

Rio Tinto, which owns 54 percent of Bougainville Copper Ltd, or BCL, has been criticised by Bougainville president John Momis for not saying what it is planning to do.

But the chief executive of BCL, Peter Taylor, says regardless of what Rio Tinto decides, BCL's vision is to return to Bougainville.

So Don Wiseman asked him what was holding them up.

PETER TAYLOR: With all large developments there are lots of issues and there are no exceptions. Obviously community issues are of paramount importance and given the history of the mining operation on Bougainville it is very important that the landowners are on side with the redevelopment, and we are talking about many groups of landowners, big families, so it is actually quite a complicated business to be confident that you have, what in the mining parlance, is called informed consent, from all of the parties you need to. And then on top of that there are layers - we have got a Bougainville government which has expressed support for Bougainville Copper and for re-opening the mine - the caveat being provided the local communities, the local landowners want the mine re-opened and want it re-opened by Bougainville Copper. Above that, we have got the national government, because at this stage, at least, Bougainville is part of Papua New Guinea and there is a big question about what will happen in the future. By 2020 Bougainville is required to have a referendum on whether it wants to remain part of PNG or otherwise, so that needs to be resolved, I think, before any major development will take place on Bougainville - be it the Bougainville mine or any other major development.

DON WISEMAN: Regardless of whether BCL goes back or not, as far as, it would seem, the vast majority of people on Bougainville go, there is a long standing requirement that there is compensation, significant compensation for, well, the effect of the mine back in the 70s and 80s on the province. Where does the company stand with that, at this point?

PT: Well there are different aspects when it comes to compensation. Probably the most publicly debated claim to compensation relates to the period when between - there was a compensation plan in place and it just so happened that it technically expired about a year before the mine closed, and it was due for renegotiation. Now compensation wasn't paid for that period so there has been an outstanding issue about that compensation and a figure has been agreed between the parties, the landowners who are entitled to compensation and the company, but there are some other issues to be resolved about distribution and which particular individuals and families might be entitled to compensation, how it is going to be paid, what it is going to be for, and so on. So there is that angle, but there have been other claims about compensation more generally and there has actually been litigation. There was litigation in the United States that went on for more than a decade over compensation among other things. That particular litigation was dismissed. There was another claim in Papua New Guinea itself, in the National Court, and although that hasn't been resolved yet, it will be resolved as part of the agreement that is in place now for the payment of compensation leading up to the closure of the mine. But I think more important than all of that is what are the benefits to the community if the mine should re-open. You can call it compensation if you like or some sort of benefits package and one of the main complaints landowners had when the mine was operating was that they didn't see themselves as getting a fair share of the revenue earned by the mine. And it's a fair complaint, in my view, because something over 70 percent of all the profits from the mine stayed in PNG somewhere but only a relatively small amount of that large percentage actually found its way back to, or stayed in, Bougainville. And that was one of the main complaints.

DW: In terms of change that was effected by the new mining law last year, if BCL agreed to re-open Panguna, you would have to re-negotiate in terms of whether or not you actually can get a licence to mine, because at this stage you have still only an exploring licence, don't you?

PT: That's right but the reality is that irrespective of which laws are in place and Bougainville Copper doesn't concede that one, either the national law or the Bougainville law aren't inconsistent with one another and it needs to be resolved somehow. But irrespective of the legal position the reality is that the company is going to have to negotiate an equitable arrangement with the landowners and the Bougainville government before the mine will re-open.