A statement has been circu­lated claiming that in February Prime Minister Peter O’Neill proposed the expropriation of Rio Tinto’s 53.6 per cent stake — which Mr O’Neill strongly denied yesterday.

The statement comes within a longer message from Bougainville’s President John Momis, within which he claims that during Mr O’Neill’s groundbreaking visit he “proposed to me directly that the national government would repeal the Bougainville Copper Agreement Act and expropriate all Rio Tinto shares in BCL”.

Mr Momis continues: “I knew Bougainvilleans would object to PNG controlling the development of mining at Panguna. So I wrote to the PM, opposing what he proposed in the strongest terms.”

The two leaders have met since and, according to the statement issued by Mr Momis, Mr O’Neill “then agreed that he would leave all issues about Panguna” — the mine site — “to be decided by the Autonomous Bougainville Government”.

The PNG government owns 19.1 per cent of Bougainville Copper.

Mr O’Neill was the first prime minister to visit Bougainville since the civil war there ended in 1997.

During his three-day visit in February, he said: “We are not interested in Panguna mine and some of the mining issues that are being discussed. We are interested in bringing development to Bougainville as a whole.”

Mr O’Neill told The Australian yesterday from Japan, where he is on an official visit: “There is no truth in that (claim of an expropriation threat), and the government position is that any talk of reopening the mine is up to the people of Bougainville.

“That is the commitment I made when I visited Panguna.”

The context includes the ABG’s tussle to conclude new mining legislation — which faces opposition from the PNG central government, which at present constitutionally retains sovereign control over minerals, and from groups within Bougainville, some of which are backed by maverick foreign individuals and groups that are seeking to dislodge Rio from its leases and to take them over.

Mr Momis said the legislation still in progress was initially developed “to stop foreign companies trying to control mining development in Bougainville through the back door”.

The context also includes Mr O’Neill’s surprise move last year to legislate control by the PNG government of the Ok Tedi mine, taking over the majority shareholding owned by PNG Sustainable Development Program, a trust established to succeed BHP Billiton when it withdrew from the mine.

The Prime Minister’s chief of staff, Isaac Lupari, who was present in the meeting with Mr Momis, told The Australian that when the issue of reopening the mine was raised, the leaders had discussed the prospect of the two governments buying a bigger stake from Rio Tinto, but “there was never any suggestion of nationalisation, or of repeal of the Bougainville Copper Agreement Act”.

Peter Taylor, chairman of BCL and also president of the Australia PNG Business Council, did not wish to comment.

But he told The Australian that the joint co-ordinating committee — established about 18 months ago to consider whether the mine should reopen and, if so, under what terms — with representatives of the national and Bougainville governments, the land­-owners, and BCL, had already met nine or 10 times. He said: “An actual agreement between the parties, if there is to be one, is still far away, down the track.”

More immediately, a formal reconciliation ceremony is being planned for BCL at Arawa on Bougainville, involving people from all areas of the province but prominently including Panguna landowners — the final stage of a series of such ceremonies to have taken place since the end of the decade-long war that began with the forced closure of the mine in 1989. The ceremony is likely to include the presentation by BCL of equipment for technical training and for malaria prevention.

A referendum will be held in Bougainville between next year and 2020 to decide the future of the province.