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Bougainville Bougainville

RIO READY TO DISCUSS CLEAN-UP

By Kevin MacQuillan

Global miner Rio Tinto says it is ready to discuss cleaning
up the site of the giant gold and copper site which it aban-
doned in 2016, four months after destroying a 46,000 year-old
Aboriginal site in Western Australia.
Bougainville landowners have filed environmental and hu-
man rights complaints against Rio Tinto with the Australian
Treasury Department, which has the power to investigate
complaints made against Australian companies operating
overseas.
Landowners are hoping to secure tens-of-millions of dollars
for rehabilitation of the Panguna mine site, abandoned after
the mine was shut by a civil war in 1989, which it helped
spark, and which resulted in the deaths of an estimated Theonila Roka Matbob. Photo: Human Rights Law Centre
20,000 Bougainvilleans.
Rio’s about-face – having walked away from Bougainville in The cost of rehabilitating the mine is estimated to be about
2016 saying the mine was no longer its responsibility – follows US$3.88 billion (K13.72 billion), and revenues for the life of
its deliberate destruction of ancient Aboriginal rock shelters in the mine are estimated to be US$50 billion (K177 billion).
May this year. Demand for copper is expected to increase ten-fold by
The shelters held evidence of human habitation for mil- 2050, according to the World Bank as the world moves toward
lennia, and yielded artifacts like stone relics, faunal remains a low carbon energy future.
and human hair, but Rio wanted to mine an estimated US$135 When it abandoned Bougainville in 2016, Rio handed its
million worth of iron ore. shares in its subsidiary, Bougainville Copper Ltd (BCL), equally
The destruction resulted in the sackings of CEO Jean-Sebas- to the national and Bougainville governments, declaring the
tien Jacques, the head of its iron ore division Chris Salisbury mine was no longer its responsibility. The announcement was
and head of Corporate Simone Niven, although they leave made by Chris Salisbury.
with pay outs in the millions of dollars. The Bougainville Government is soon likely to take full
“The reputational damage has been enormous and they control of BCL after PM James Marape reaffirmed the govern-
now need to work on rebuilding trust,” said Camille Simeon, ment’s intention to give its equity holding to the ABG during
a Sydney-based investment manager at Aberdeen Standard his speech at the inauguration of Bougainville’s new presi-
Investments, which holds Rio shares and manages assets worth dent, Ishmael Toroama.
about $563 billion, told Bloomberg. BCL still holds the exploration licence and is regarded as the
Theonila Roka Matbob, a traditional landowner who has re- front-runner to obtain the full mining licence.
cently been elected to the Bougainville parliament, said resi- The majority of its Directors are PNG Nationals, and have
dents were “living with the impacts of Panguna every day”. considerable political and mining experience, including Chair,
“Our rivers are poisoned with copper, our homes get filled Sir Mel Togolo; former Prime Minister, Rabbie Namaliu; former
with dust from the tailings mounds, our kids get sick from Cabinet minister and current Chairman of Kumul Petroleum
the pollution,” she said. “Every time it rains, more waste Holdings and OK Tedi Mining, Sir Moi Avei, and exploration
washes into the rivers, causing flooding for villages further geologist, director and managing director, David Osikore.
downstream. Some communities now have to spend two hours Osikore is a Bougainvillean.
a day walking just to get clean drinking water because their But while BCL has the inside running on getting the licence
nearby creeks are clogged up with mine waste.” to restart Panguna, it could not do it alone. Its working capital
In a surprise announcement, Rio says it is now ready to is estimated to be only about $50m.
enter into discussions with local communities, the PNG and Greg Evans, KPMG’s Perth-based Global Leader, Mining
ABG governments, admitting it is aware of the state of the Mergers and Acquisitions, says the Panguna mine is a ‘high-
Panguna site. risk, high-return’ investment, which only global miners would
“We understand these concerns and reiterate our commit- be interested in.
ment to core international standards, including the OECD Locally, there is immense opposition to BCL having any in-
Guidelines, and our readiness to meet those commitments in volvement in the future of mining at the site. Locals are likely
practice.” to have the same attitude towards its former parent, should it
For the last ten years, the Autonomous Bougainville Govern- make a bid to take part in mining Panguna again.
ment has been looking at ways to restart the mine to bring
prosperity to a subsistence-level economy. editor@islandsbusiness.com

Islands Business, November 2020 35