Bougainville Mining News : Have plans to restart the giant Bougainville mine stalled ?

SYDNEY, October 6 (Reuters) – Plans to reopen one of the world’s biggest copper mines, shut by a civil war on the Pacific Island of Bougainville in 1989, have run into trouble.

The quarter of a million people of Bougainville are tentatively scheduled to vote on independence from Papua New Guinea in June 2019, and revenue from the reopening of the Panguna mine is essential for the otherwise impoverished island to have any chance of flourishing if it becomes the world’s newest nation.

But there is now a struggle over who will run the mine between Bougainville Copper Ltd – the previous operator now backed by the Autonomous Bougainville Government and the Papua New Guinea government – and a consortium of Australian investors supported by the head of the landowners who own the mineral rights.

The dispute is opening old wounds – and is almost certainly going to delay any reopening. That could help to drive copper prices higher as many forecasters expect that demand for the base metal will exceed supply in the next few years.

The battle lines have been hardening on several fronts, Reuters has learned.

Papua New Guinea has told airlines that Sydney businessman Ian de Renzie Duncan, who set up the consortium, is banned from entering the country until 2024, according to a Papua New Guinea government document reviewed by Reuters.

The request for the ban was made by the Bougainville government, three sources with knowledge of the document said.

The consortium has also acknowledged for the first time that it is paying some landowners a monthly stipend and has pulled in some big backers that have not previously been disclosed.

They include Richard Hains, part of a billionaire Australian race-horse owning family which runs hedge fund Portland House Group.

In a sign of how ugly the row is getting on the ground, local opponents of BCL becoming the operator – and some who are opposed to the mine reopening altogether – blocked Bougainville government officials from entering Panguna in June.

They had hoped to get key landowners to sign a memorandum of agreement that would have endorsed BCL as preferred developer, according to a copy of the document reviewed by Reuters. The proposed agreement also stipulated the mine would be re-opened by June 2019, ahead of BCL’s own timeframe of 2025-26.

The Papua New Guinea government didn’t respond to requests for comment for this story.

Bougainville’s main political leaders say getting the mine reopened is critical. “If the independence of the people is to be sustained then we need Panguna to run,” Bougainville Vice President and Mining Minister Raymond Masono told Reuters in a phone interview.

He said he believes BCL has first right of refusal to operate the mine under laws passed three years ago, and only if BCL declined to take up that right should an open tender take place.

 For a graphic on Panguna mine on Bougainville island, click tmsnrt.rs/2yYCkTt

DEEP RESENTMENT

The abandoned copper and gold mine contains one of the world’s largest copper deposits. During its 17-year life until the closure in 1989, Panguna was credited for generating almost one-half of Papua New Guinea’s gross domestic product.

The civil war was largely about how the profits from the mine should be shared, and about the environmental damage it had caused.

There was deep resentment among the indigenous Bougainville people about the amount of the wealth that was going to Papua New Guinea and to the mine’s then operator, Conzinc Riotinto of Australia Ltd, a forerunner of Rio Tinto.

The mine was forced to shut after a campaign of sabotage by the rebel Bougainville Revolutionary Army.

The conflict between Bougainville’s rebel guerrilla army and Papua New Guinea forces left as many as 20,000 dead over the following decade, making it the biggest in the region known as Oceania since the Second World War.

A supplied image shows locals taking shelter from rain under a local administrative building at the former Bougainville Copper Limited’s (BCL) Panguna mining operation located on the Pacific Ocean island of Bougainville, Papua New Guinea, March 29, 2017. Picture taken March 29, 2017. BCL/Handout via REUTERS

Rio Tinto divested its stake in BCL in 2016, and the listed company is now just over one-third owned by the Bougainville government and one-third owned by Papua New Guinea.

Papua New Guinea Prime Minister Peter O‘Neill said last year his government would gift the shares received from Rio, or 17.4 percent, to the people of Bougainville, although that is yet to take place.

“NEVER AGAIN”

The challenge from the Australian consortium that now includes listed gold and copper explorer RTG Mining was made public in June. Duncan and his fellow investors have joined forces with a group of Panguna landowners, the Special Mining Lease Osikaiyang Landowner Association (SMLOLA) led by Philip Miriori.

Miriori was in the Bougainville Revolutionary Army as the private secretary to the late Francis Ona, the former BCL mine surveyor who became leader of the resistance.

Ona had declared that BCL should “never again” be allowed to run the mine and Miriori, Ona’s brother-in-law, still supports that stance.

“They have caused a lot of damage, they don’t have the money and they are not telling the truth and so I wouldn’t accept them,” Miriori said in a telephone interview from the Bougainville town of Arawa.

 

PAYOUTS TO LANDOWNERS

Duncan, a former barrister with a background in mining law, heads an entity called Central Exploration that has a half share of the consortium.

Duncan’s consortium has been paying money, described as a stipend, to some of the landowners, but denies this amounts to bribery.

“We are really talking about people receiving a couple of thousand kina ($608) a month,” said Duncan, who added that the money helps the landowners to travel and find accommodation in towns where Panguna negotiations take place. “It’s not bribery, it’s business,” he said.

BCL claims to have the support of eight other landowner groups in Bougainville with an interest in the project. They have land rights covering access roads and the port site, among other areas, though crucially not the mine site itself.

FINANCING DOUBTS

The uncertainty is going to make it difficult for either group to raise the capital that will be needed to get the mine restarted.

In 2012, BCL estimated the cost of re-opening at $5 billion. With few of its own assets, the company would need to secure the mining rights before tapping capital markets.

The Australian consortium may be in a stronger position, according to Hains, who is a 15 percent owner of RTG. He said the consortium has strong access to the North American capital markets and could re-develop Panguna in a “highly timely fashion”.

As it stands, BCL has no mine without the support of the owners of the minerals, and Duncan’s group has no project without road and port rights as well as government support.

Anthony Regan, a constitutional lawyer at the Australian National University and an adviser to the Bougainville government, said the immediate outlook for the mine is bleak. “The need of Bougainville to have a significant source of revenue if it’s to be really autonomous or independent has become hopelessly enmeshed with the future of Panguna.”

Reporting by Jonathan Barrett in SYDNEY; Editing by Martin Howell

Our Standards:The Thomson Reuters Trust Principles.
 

Bougainville News feature 1 of 2 : Panguna in hindsight – yes , hindsight is a wonderful thing

 

 ” Every picture tells a story. Every story a picture tells may not be a perfect story but, as another saying goes, there’s more to the picture than meets the eye. 

There is a certain poignancy about this picture – and many other images connected with the multitude of matters surrounding Panguna. 

Panguna is not merely a history of mining, minerals, money, maiming and the nastiness of the conflict. It is not only a story of lost lives, lost land and lost opportunities. 

This photograph shows a woman, leading her male counterparts in the early days of the dispute involving one group of Panguna landowners voicing, in a very public way, early warnings of what might follow.”

Article by Simon Pentanu  

Panguna is a story of many individuals and groups; of men, women and children of the forest, the valleys, the ravines, the hills and mountains, the rivers and creeks and sacred sites – all of which people called home, before mining arrived. 

Perpetua Serero and Francis Ona both passed away relatively young. The effervescent Damien Dameng – the one with reading glasses studying his notes in this photo – lost his life under dubious circumstances only in recent times. 

Francis Bitanuma with the white cap and overgrown beard in this photo, is still around, raising his voice and picking and choosing his fights but with fewer and fewer local allies in tow.

Perpetua Serero had remarkable poise and presence. Had her voice as Chairlady of a splinter Panguna Landowners Association (PLOA) been heeded when she spoke (either with or without the aid of a hand-held loud hailer), some of the fiasco and hurt amongst the landowners could well have been mitigated, if not largely avoided.

Instead, the very early feuds over Panguna over benefits accruing from the land under various leases to BCL were between landowners themselves. Only a dishonest landowner would deny this was the case.

Disputes and differences over land sharing, land use and land tenure preceded the arrival of mining in Panguna. But these were localized and tended to be confined within households, extended families and clans. Agreements were brokered to resolve issues or at least keep them to manageable levels. There were ways for everyone to move on, living and communally sharing the land, rivers, creeks, the environment and everything that more or less made life worth living and dying for. 

Differences and feuds over the benefits accruing from the mine such as RMTL (Road Mining Tailings Lease) payments and other payments added fuel to existing disputes between clans, families and relatives. Some of the disputes became vexatious with the advent of mining.

Mining catapulted Panguna women like Perpetua Serero, Cecilia Gemel and others to the forefront as they took on much more active and pronounced roles as mothers of the land in a society that is largely matrilineal. 

This photograph shows a woman, leading her male counterparts in the early days of the dispute involving one group of Panguna landowners voicing, in a very public way, early warnings of what might follow.

The significance of her message was either lost to or not taken seriously by most leaders from central Bougainville, BCL, PLOA and relevant authorities in the national Government at the time.  

That men are  on the periphery of the photo – in stark contrast to the lead role  being played by Serero at the front – wasn’t just symbolic. It was real. Her position at the front, with the support of  men such as Francis Bitanuma, Francis Ona, Damien Dameng and others was neither incidental, coincidental nor accidental. Her role at the forefront of this dispute over land was natural and logical, because in most of Bougainville it is through the women that land is inherited and passed down the generations. 

That more and more landowners became willing to front up in crowds such as this, emboldened by the willing maternal leadership of someone who stood up to carry the mantle of those that bore grievances against their own PLOA, led by men. Serero, and the landowners who stood with her, made a brave and significant statement. 

As the differences grew, the younger Panguna generation – alongside women like Serero and Gemel and the emerging, vociferous Francis Ona – turned their attention to Rio and BCL.

Increasingly they saw BCL and the old PLOA as having all the control and influence over what happened in special mining lease (SML) area. The injustice felt in not having much say weighed heavily and became a rallying point as captured in this photo.

All of us observing, reading and writing about the upheavals over Panguna, the mounting dissatisfaction, the criticism of the Bougainville Copper Agreement (BCA) and the rebellious response that shut down the giant mining operations, may find some satisfaction in the common truism that hindsight is a wonderful thing.

The BCA was a document familiar mostly to lawyers, investors and bankers and, of course, to the mining fraternity. It was not until well after the first power pylons fell, after deployment of the security forces and after the mine was closed that interest increase in reading the fine print of the BCA. Coming, as they did, from a paperless village life, many landowners and Bougainvilleans in the community at large found little compulsion to read, let alone understand and appreciate legal agreements.

When the going was good everything was hunky dory. The landowners were getting their lease payments, social inconvenience compensations, royalties etc. The provincial government was doing well and was  financially better placed than others in the country. Employees couldn’t really complain about the job opportunities, good salaries and wages.

The majority of the landowners the BCA was purported to serve turned against it, despised and rebelled against it. 

It is a story new generation of Panguna landowners is born into. It is not a story restricted to past or the future. Rather, it is a story that evokes timeless lessons and has some relevance for all of us forever throughout our lifetime.

It is true, hindsight is a wonderful thing.

I have heard a lot about Perpetua  

Serero. I never met her. I will never meet her in person because she has passed on. 

She served her calling with tremendous support from men and women of the land. She had faith in customs and traditions that gave equal opportunities to women. These customs and traditions gave her the mantle and legitimacy to lead protests against the male dominated RMTL executives in the Panguna Landowners Association. 

She faced an awful amount of pressure because of intense feuding over control of PLOA and RMTL in Panguna. She took the baton and ran her lap hoping to influence and change some of the male dominated status quo in the old PLOA.

The Australian Liberal and Labor colonial governments clearly saw what was going on and regarded Panguna mine as the Achilles heel of a future, independent PNG. 

 Men like Ona, Bitanuma, Dameng and women like Serero, Gemel and others gradually realised that unless they stood up and were counted, taking a stand against the inequities they saw, they would be swamped and inundated by the complacency that was prevalent, accepted, and that supported a Panguna that seemed all normal driven by profits and benefits of mining. 

There are lessons Rio and BCL learnt out of the land dispute. Some of these lessons are harsh. Some even the best legal agreements cannot address, avert or fix, for they are based in customs and culture, not common law. 

Panguna may be most uncommon dispute or problem of its time that a foreign mining company has had to face and deal with. Its repercussions and reverberations spread through Bougainville and indeed around the world very quickly.

It has unearthed lessons that go well beyond issues normally associated with mining.

The Bel Kol approach initiated by the landowners shows traditional societies also have ways, means and mechanisms by which to resolve seemingly intractable disputes. These ways are local, restorative and win-win in their approach, not adversarial, competitive and foreign.

Some of the continuing pain, ill effects and trauma over lost land and lost dignity over Panguna are more destabilizing and debilitating than the crisis and conflict that landowners and many other Bougainvilleans endured.  

Everyone that has lived through the crisis on the Island or has been affected one way or another, directly or indirectly, has had to deal with the horrors of crisis, war and conflict. Rebuilding lives, normalcy and returning to a resilient society is a longer journey that will take many generations over many lifetimes.

Little wonder people are prepared to protect their rights and defend the land with their lives. It is true, isn’t it, that one cannot fully understand and appreciate peace and freedom unless you either lose it or you have been suppressed.

I hope looking back we can pass on to the next generation the genuine benefits of hindsight.

 

Bougainville #Mining News #PNG : ABG lifts Mining and Exploration Moratorium on #Bougainville.

The Autonomous Bougainville Government has made an historic announcement in the lifting of the Mining and Exploration Moratorium on Bougainville.

ABG President Chief Dr John Momis made the announcement on Friday April, 28 2017 after the Bougainville Executive Council carefully considered the implications of developing the capacity of the government to manage exploration applications and the needs of the people of Bougainville.

This allows for applications for the areas of Tore, Isina and Jaba only and does not include Panguna, places which have large ore deposits.

Since the development of the Panguna Mine more than 40 years ago the rest of Bougainville has been covered by the moratorium until the announcement was made.

In 2006 the ABG requested the National Government for the Mining, Oil and Gas powers and functions to be drawn down as the priority powers in its notice to the national government.

In 2008 both the ABG and the National Government signed the Alotau MOU that established the road map for the transfer of the Mining, Oil and Gas powers and functions from the National Government to the ABG.

Although the process was slow the ABG enacted its own Mining Act in 2015 and this paved the way for the ABG to regulate its own mining sector.

“The Bougainville Constitution and the Bougainville Mining Act 2015 clearly define the people as the owner of all the mineral found on all the land in Bougainville,” President Momis said.

“It is significantly important that the people’s consent must be given before any mine is developed and the Mining Act,” Momis said.

Momis also added that the Bougainville Mining Act gives the ABG the opportunity to preserve and reserve certain areas in Bougainville from mineral exploration and mining to strategically harvest mineral resources for the current and future generations.

The Bougainville Executive Council has the final authority to grant mining licenses in Bougainville and in this way it will scrutinise every would be investor well to ensure only genuine investors invest in Bougainville before a license is granted.

“We have learnt our lessons from the Panguna experience and now we have the opportunity to do a better job this time,” President Momis said.

“On behalf of the people of Bougainville I invite and welcome applications from prospective applicants to invest in our mining sector; Bougainville is open for business and I look forward to the development of long term economic partnerships to allow Bougainville to fulfil the economic potential she rightly deserves,” he added.

The Bougainville Mining Registrar will start accepting applications from 10am Bougainville Standard Time, Tuesday 9 May 2017.

 

 

 

Bougainville Government News : First 100 days Achievements of Chief Secretary Joseph Nobetau

 ” The challenges that we face are immense. As Chief Secretary I am honoured to be able to serve Government and commit to maintaining the full degree of energy, integrity and direction required to help the Government achieve its objectives.

Whilst much has already been done, it is incumbent on all public servants, both senior and junior, to ensure we deliver the public services that all Bougainvilleans so richly deserve.

Challenges and Upcoming Priorities

Despite some achievements it is clear that much more needs to be done. Key priorities include:

  • Enhancing engagement to ensure a more joined up approach to Government service delivery;
  • Ensuring effective coordination of donor support so that we can maximize the value of existing international development assistance whilst harnessing new and emerging development opportunities;
  • Ensuring effective community engagement so that our people understand what it is that the Government is doing for them;
  • Ensuring that corporate plans are adhered to and remain reflective of Government objectives;
  • Ensuring that the BEC remains well supported and that submissions reflect whole-of-Government considerations and priorities;
  • Continuing work to undertake urban and town planning activities to enhance infrastructure and housing to address need;
  • Getting the new integrated financial management system in place to deliver more effective, transparent and accountable financial management practices across Government;
  • Continued work on the draw-down of powers to support autonomy;
  • Convening the Revenue and Taxation Summit; and
  • Ensuring that the Bougainville Referendum Commission is fully established and that important stakeholder and community engagement work commences.

Joseph Nobetau Chief Secretary ABG

Download a PDF Copy of this report :

Media_Statement_-_Achievements_Joseph_Nobetau_Chief_Secretary_2017

Following my appointment to the Office of Chief Secretary on 17 October 2017, I have been engaged in a process of reform aimed at enhancing the capacity of the Department of President and the BEC and the broader public service.

As Chief Secretary I have engaged extensively with key stakeholders including Ministers, Secretaries, donors, the private sector and civil society. Through this work I have gained valuable insight into the workings of the public sector and the need for change and reform.

The purpose of this statement is to provide the general public with an update of the work that has been undertaken since my appointment, outline the challenges that I see moving forward and to canvass the priorities that are ahead.

Consultations

Ministers

Since commencing as Chief Secretary I have been able to meet with all Ministers. Through these discussions I have gained valuable insight into key ministerial priorities which has in turn informed my work with portfolio Secretaries and keystake holders. These discussions have been invaluable in informing my Department’s broader reform agenda and have assisted with some critical organisational change decisions.

Secretaries

As Chief Secretary I see it as an important part of my role to provide leadership and guidance to Secretaries. Since commencing as Chief Secretary I have convened Senior Management Committee meetings and met one on one with all Secretaries.

In my discussions I have emphasised the President’s key messages around organisational capability and the need to deliver meaningful outcomes with respect to service delivery and public service reform. These discussions have been positive, and whilst there will continue to be some challenges I will continue to ensure that all public servants remain mindful of their need to be accountable and responsive to Government and the people that we serve.

Parliamentary Services

As Chief Secretary I consider it essential that clear lines of communication be in place with the Office of Parliamentary Services. To that end, I have developed a strong working relationship with the Speaker of Parliament with a view to ensuring better links between the public service, the BEC and parliament.

This work is already showing dividends through more effective coordination of public service policy development and programme delivery and parliamentary business.

Community Government

I have been working with the Secretary for Community Government to make changes to Executive Manager arrangements to ensure more responsive community government across Districts. In that context, some immediate changes have already been made to realign resources so that we can better meet the needs of local communities. I will continue to work with the Secretary to ensure that resources at the District level are appropriate so as to enable effective community engagement and service delivery.

International Engagement

International engagement is a critical part of the Chief Secretary role. With significant donor representation in Buka I have reached out to key bilateral and multilateral partners to discuss how donor activities support the work of the ABG and to explore opportunities for more effective engagement and aid coordination. This has included my work as chair of the Australian and New Zealand funded GIF (Governance Implementation Fund) and work with the Australian Funded PNG Governance Facility.

Advisory Support and Donor Engagement

The ABG continues to receive support from a range of donors in relation to the key areas of governance, peace building, health, transport, law and justice and election support. As Chief Secretary I acknowledge the value of this support with a number of key advisers providing advice to my office and across government to progress important initiatives in areas including: recruitment, legal advice and support, draw down of powers, election preparations, media and communication, strategic and corporate planning, economic development, revenue and taxation, urban planning, monitoring and evaluation, financial management and strategic engagement. While in the longer term it is my hope that the ABG will develop the internal capacity to manage these important issues independent of donor support, the support we currently receive has been a critical part of our recent progress.

Aid Coordination

In terms of aid coordination, I continue to engage with key donors regarding how we can target support to get the best possible outcomes. I am of the view that any support must be clearly aligned with ABG priorities and be based on ensuring meaningful capacity building where ABG officers are able to learn from the support provided and manage issues independently in the future. A key future priority will be developing an effective aid coordination mechanism within my Department to ensure the most efficient use of donor support.

Bilateral and Multilateral Engagement

In February 2017 my office coordinated briefing for the visit by NZ Minister for Foreign Affairs the Hon. Murray McCully. The meeting provided a valuable opportunity to talk with a key development partner and friend, with the Foreign Minister committing to ongoing support to the ABG in the lead up to the referendum and beyond.

Vice President Masono hosted a visit by a delegation from the European Union which comprised of the EU Ambassador to PNG, the French Ambassador to PNG and senior officials on 20 February 2017. The visit provided a valuable opportunity to reinforce the ABG’s development priorities and for delegation members to see firsthand some of the challenges that face our young and emerging democracy.

Feedback from the visit was positive, with the EU Ambassador indicating a very strong desire to provide support to Bougainville in key areas including infrastructure, water sanitation and vocational education (amongst others). These are consistent with priorities identified through the PNG-EU dialogue and present opportunities for the ABG to partner with the EU in a number of short to medium term high impact areas. It is hoped that in the near future a delegation led by the Vice President will travel to Port Moresby to meet with senior National Government Officials and the EU Ambassador to explore how this commitment for support can be translated into meaningful action.

Community Engagement

At the community level I have engaged widely with non-Government and volunteer organisations and the education sector. I consider these stakeholders to be essential from a social development perspective.

In December I was honoured to be asked to deliver the keynote address at the Hutjena High School graduation. This was an excellent opportunity for me to deliver a key message on leadership and the value of quality education. My message was that as emerging leaders high school graduates are well placed to make a long term contribution to our economic, social and development goals.

In February I was honoured to speak at the Public Service Dedication Service. I used this as an opportunity to reinforce the need for a responsive public service, noting that planning is the cornerstone of success.

I continue to work with local mainline churches to progress aerial surveys of available land to enhance housing and community infrastructure. This work has included undertaking aerial surveys in Buka, Arawa and Buin to aid town planning, including the potential development of a teachers college in Buin and new housing development in Arawa and Buka.

Organisational Reform

Communication

Communication is the cornerstone of any well-functioning public service. As Chief Secretary my primary aim has been to enhance communication within Government and to our key stakeholders. I have achieved this by chairing Senior Management Committee meetings, engaging with Secretaries and senior leaders, connecting with Districts through radio programmes and working with our civil society partners.

This process is now starting to show results. Department Heads are becoming more engaged and my office has increased visibility of key public sector initiatives.

Despite this it is clear that much more needs to be done, particularly with respect to communicating initiatives to the broader community. In that context I am working with officials in my Department, including my Deputy Secretary, to enhance our media and communication strategy. Whilst there has been some good work in this area many of the initiatives that we need to enhance community awareness have stalled. With the referendum fast approaching this is not acceptable, and a key future priority will be to enhance mechanisms to more effectively communicate with the people.

Corporate Planning

A functional public service requires well thought out policy measures that respond to the needs of Government. This has been lacking in the past. It is clear to me that the public service must be more accountable and responsive.

To that end I have commenced a process to put in place departmental corporate plans. I see these documents as being key to addressing issues of accountability and ministerial expectations. By having in place well thought out plans that reflect Government and ministerial priorities the public service has a means by which to measure whether or not we are meeting core goals and responsibilities. It is my hope that these plans will be finalised in the coming month and that they will in turn help inform the development of a longer term strategic development plan that maps our key development priorities over the years to come.

Recruitment Processes

Open and merit based recruitment processes are an essential part of ensuring that we attract the best and brightest to our public service ranks. I have therefore taken a very close interest in recent recruitment rounds with a view to ensuring that the public service fully adheres to the principles of fair, open and transparent recruitment.

Retrenchments

In late 2016, in consultation with the Secretary for Personnel Management and Administration, arrangements were made to retire a number of officers who had reached the mandatory retirement age. This process was undertaken to ensure compliance with the Public Service Management Act and as part of a broader strategy of ensuring the appropriate resourcing of the public service in the longer term.

Senior leaders Training

As Chief Secretary I have participated in the Australian Government funded senior leaders training which is being conducted by the Queensland University of Technology. I see this training as being a valuable tool through which principles of management can be reinforced, whilst providing an ongoing opportunity for senior leaders to work closely with Ministers.

Overarching MoU on Draw Down of Powers

Work is currently underway to enable the signing of the overarching MoU on the draw-down of powers by the ABG and National Government Public Service Ministers. This will be a critical enabling step in achieving further autonomy.

Financial Management and Elimination of Corruption

Financial Management Systems

In line with the President and Government’s expectations I am heavily focused on financial management and accountability. As Chief Secretary I am conscious of my role in ensuring whole-of-Government financial accountability and working with the Secretary for Finance to enhance our financial management accountability frameworks. In particular, I am actively engaged in work to fast track implementation of the new Integrated Financial Management System within the ABG.

Revenue and Taxation Summit

For some time now it has been proposed that the ABG convene a Revenue and Taxation Summit to review existing revenue raising capacity and to explore means through which the ABG can enhance and consolidate our revenue base.

I am pleased to advise that work in the area is now progressing and that I am working with the Secretary of Finance to convene the summit in the coming months. The summit will provide an opportunity for key stakeholders and subject matter experts to convene.

Referendum Preparations

Bougainville Referendum Commission

On the 24th of January 2017 I travelled to Port Moresby to co-sign the enabling agreement with my national Government counterpart to establish the Bougainville Referendum Commission. The Commission will be an essential mechanism through which the operational management of the referendum will be conducted, and importantly, through which stakeholder and community engagement can occur. I am currently working with the Secretaries for Peace Agreement Implementation and Law and Justice to ensure that all constitutional and organic law requirements have been met prior to the final charter establishing the Commission being signed off by the Governor-General.

Challenges and Upcoming Priorities

Despite some achievements it is clear that much more needs to be done. Key priorities include:

  • Enhancing engagement to ensure a more joined up approach to Government service delivery;
  • Ensuring effective coordination of donor support so that we can maximize the value of existing international development assistance whilst harnessing new and emerging development opportunities;
  • Ensuring effective community engagement so that our people understand what it is that the Government is doing for them;
  • Ensuring that corporate plans are adhered to and remain reflective of Government objectives;
  • Ensuring that the BEC remains well supported and that submissions reflect whole-of-Government considerations and priorities;
  • Continuing work to undertake urban and town planning activities to enhance infrastructure and housing to address need;
  • Getting the new integrated financial management system in place to deliver more effective, transparent and accountable financial management practices across Government;
  • Continued work on the draw-down of powers to support autonomy;
  • Convening the Revenue and Taxation Summit; and
  • Ensuring that the Bougainville Referendum Commission is fully established and that important stakeholder and community engagement work commences.

 

 

 

Joseph Nobetau

Bougainville Mining News: Momis slams PNG Minister’s statement as “misleading and mischievous nonsense “

Micah

Mr. Micah’s statement that Kumul Minerals will keep the shares until then is nothing but misleading and mischievous nonsense. It is intended to give the impression that somehow he and Kumul Minerals are in control of the share, and concerned to look after Bougainville’s interests. Nothing could be further from the truth.

‘Mr. Micah has been trying to get control of Rio Tinto’s BCL shares for over two years. He has had secret dealings with Rio.

I call on the Prime Minister to overrule his irresponsible minister. He must protect the peace process by transferring the 17.4 per cent shareholding to the ABG.”

Bougainville’s President, Dr. John Momis, described a statement on the Tinto shares in BCL by Ben Micah, Minister for Petroleum and Energy ( Pictured above with PNG PM O’Neil ) as ‘misleading and mischievous nonsense’.

He was referring to public debate following Rio Tinto’s recent decision to divest its 53.8 per cent majority shareholding in Bougainville Copper Ltd (BCL). Rio has transferred its shares to a Trust, with 36.4 per cent available to the Bougainville Government, and 17.4 per cent to the PNG government. With its existing 19.3 per cent shareholding, this would make PNG equal shareholder with Bougainville. The PNG government shares were accepted by Petromin the day Rio announced its decision. Bougainville has yet to announce its decision on the shares.

But on 7 July Mr. Micah was reported as claiming that PNG owned company, Kumul Mineral Holdings Ltd will keep the 36.4 per cent offered to Bougainville until the ABG accepts the shares.

President Momis said:

‘Kumul Minerals Holdings, Mr. Micah, and the National Government have no role in relation to the 36.4 per cent BCL shares available to the ABG. Those shares were transferred by Rio Tinto to an Australian-based Trust – Equity Trustees Limited – under a Shares Trust Deed. The ABG has two months in which to decide whether to accept the transfer of the shares.

‘Mr. Micah’s statement that Kumul Minerals will keep the shares until then is nothing but misleading and mischievous nonsense. It is intended to give the impression that somehow he and Kumul Minerals are in control of the share, and concerned to look after Bougainville’s interests. Nothing could be further from the truth.

‘Mr. Micah has been trying to get control of Rio Tinto’s BCL shares for over two years. He has had secret dealings with Rio. In December 2015, he told me that the National Government must buy the Rio shares for US$100 million, in order to stop Rio selling the shares to outside interests. When I subsequently questioned Rio representatives in February they denied any such deal.

‘As President of Bougainville, I have no trust at all in Mr. Micah having any role in relation to these shares. If, as reported on Friday, the Prime Minister has no knowledge of the transfer of the 17.4 per cent of BCL shares from Rio to Petromin on 30 June, then clearly the evil and irresponsible move to make PNG equal shareholder in BCL together with the ABG has been cooked up between Rio and Mr. Micah. That deal must now be undone.

‘I call on the Prime Minister to overrule his irresponsible minister. He must protect the peace process by transferring the 17.4 per cent shareholding to the ABG. The ABG will then be majority shareholder, with PNG still holding its existing 19.4 per cent. The ABG accepts that the National Government should retain a role in BCL, but only if the ABG controls mining policy, and the company that owns the Panguna mine. ~`

‘BCL hold only an exploration licence over the former Special Mining Lease at Panguna. Under the Bougainville Mining Act, if 25 per cent or more of shares in a company holding an exploration licence are transferred, the ABG MUST initiate action to terminate the lease. The transfer by Rio to the Trust means that the termination process must now begin. The ABG Minister for Mining, Robin Wilson, has given instructions to the Secretary of the ABG Mining Department to issue a notice to BCL to show cause why its licence should not be terminated.

‘If the National Government keeps the 17.4 per cent shares, then nothing will stop the termination process being completed. Then BCL will have its cash and its Panguna drilling data, but no licence in Bougainville. That would be a bad outcome for everyone. We prefer to work with the National Government. But that must be on a basis where the ABG is in control of Bougainville’s mining.’

The President also referred to Mr. Micah’s claims of great support for the PPP on the basis of the very recent victory of PPP party candidate, Timothy Masiu, in the by-election for South Bougainville Open. He said:

‘The result does not indicate strong support in Bougainville for PPP – far from it. Instead it was a victory for a well-known person from a well-known Buin area family, who happened to have strong financial support from MR. Micah’s PPP party. The policies of the PPP and the roles of its leader, Mr. Micah, do not have support in Bougainville.

‘If the voters of South Bougainville had known at the time they cast their votes that Mr. Micah was arranging with Rio Tinto for the National Government to become equal largest shareholder in BCL, then Mr. Masiu would have been completely rejected as a PPP candidate.

‘I call on the new MP, Mr. Timothy Masiu, to explain to Mr. Micah the deep sensitivity amongst Bougainvilleans about the future of the Panguna Mine. I call on him to convince Mr. Micah to support the transfer to the ABG of the 17.4 per cent shares in BCL. Mr. Masiu must persuade Mr. Micah to transfer the shares if he is to have any chance of returning as a PPP MP in 2017.’

Hon. Chief Dr John L. Momis, GCL, MHR

President, ARoB

10 July 2016

Bougainville News : President Momis statement ABG engagement with Rio Tinto about Rio’s plans for its shares in Bougainville Copper -BCL

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” I want to brief you on recent developments concerning Rio’s review because it is obviously a matter of great importance to the future of Bougainville. So all of you, as the elected representatives of the people, have the right to be kept advised of developments on this subject.

Another important reason for me making this statement is that there are still many quite crazy – long long olgeta – stories being spread by a few Bougainvilleans, and by a few of our more crazy international critics, that the ABG is under the control of Rio Tinto and BCL, and is selling out the interests of Bougainvilleans to big mining interests. When such stories are still being spread, by either self-interested liars or deeply misguided people, it is important that accurate information is available that allows you, as the people’s representatives, to make your own judgments about what is happening.

We also emphasised again that the ABG and landowners remain willing to engage with BCL and Rio about jointly examining the possibilities of re-opening the Panguna mine.

However, I also said that if Rio does decide to end its investment, then the ABG remains completely opposed to any equity transfer to the National Government. Instead, there must be equity transfer to the ABG and landowners, without any payment.

I also stated firmly the ABG position that Rio must take full responsibility for an environmental clean-up, and for dealing with other major mine legacy issues.

If, as now seems highly likely, Rio decides to end its involvement in BCL, the equity must come to Bougainville, and Rio Tinto must accept its full historic responsibilities, and honour its obligations to Bougainvilleans

I ask this House, and the people of Bougainville, to support my Government in its ongoing, life and death struggle, to protect the interests of the landowners, and of the wider Bougainville community.”

EDITED STATEMENT BY PRESIDENT JOHN. L. MOMIS, TO THE BOUGAINVILLE HOUSE OF REPRESENTATIVES 5 APRIL 2016

Mr. Speaker:

I rise to share with all members of this House the most recent developments in the ABG’s efforts of recent years in examining the options for the future of large-scale mining in Bougainville.

In particular, I am talking today about what is still the very uncertain future of the Panguna mine. Since the Bougainville Mining (Transitional Arrangements) Act in July 2014, the most immediate factor causing uncertainty has been Rio Tinto’s reaction to that Act doing away with BCL’s major mining tenements, replacing them with just an exploration licence over the former Special Mining Lease – the SML.

Rio Tinto is the London based giant mining company that since the early 1990s has been the 53.6 per cent majority shareholder in BCL. Rio announced in August 2014 that it would conduct a review into its investment in BCL. That announcement opened the real possibility that Rio Tinto would withdraw from any involvement in BCL.

Withdrawal of Rio would raise major uncertainties about the future of BCL, and what the ABG and landowner organisations had been doing for several years – that is, we had been engaging with BCL about the possible re-opening of Panguna.

Of course, the engagement process was still in its very early stages. No decisions had been made on the major issues of substance. Further, the Mining Act gave landowners a clear veto over re-opening.

But with the announcement of Rio Tinto’s review of its investment in BCL, most aspects of our engagement with BCL were put on hold. That is still the position today.

I want to brief you on recent developments concerning Rio’s review because it is obviously a matter of great importance to the future of Bougainville. So all of you, as the elected representatives of the people, have the right to be kept advised of developments on this subject.

Another important reason for me making this statement is that there are still many quite crazy – long long olgeta – stories being spread by a few Bougainvilleans, and by a few of our more crazy international critics, that the ABG is under the control of Rio Tinto and BCL, and is selling out the interests of Bougainvilleans to big mining interests. When such stories are still being spread, by either self-interested liars or deeply misguided people, it is important that accurate information is available that allows you, as the people’s representatives, to make your own judgments about what is happening.

Honourable Members may recall my statement to the House about the future of Panguna, made on 22nd December 2012. I then advised of the latest in a series of attempts that the National Government has made since at least 2014 to purchase Rio Tinto’s 53.6 per cent equity in BCL. This latest attempt was made from late November.

The Member of the National Parliament for Central Bougainville, Hon. Jimmy Miringtoro met me to tell me that National Government Minister, Hon. Ben Micah, wanted to discuss with me and Panguna landowner representatives the urgent need for the National Government to purchase the Rio Tinto equity. I subsequently met Mr. Micah, and then Mr. Micah together with the Prime Minister, Hon. Peter O’Neill.

In brief, they said it was an urgent necessity for the National Government to purchase the equity as soon as possible. Initially we were told we had to give our agreement by 7 December. The reason given was that if PNG did not purchase the equity, there was a grave risk that Rio would sell the equity to an un-named third party. Mr. Micah emphasised how much that would be against the interests of both Bougainville and PNG.

A major concern for me was that Mr. Micah emphasised that it would be far too sensitive to even mention or discuss environmental clean-up of Panguna with Rio Tinto. The sale of the shares was the only issue that could be discussed, He said that issues had to be dealt with only as a commercial transaction, without any reference to environmental issues.

I made it clear to both Mr. Micah and Mr. O’Neill that the ABG could not support the National Government proposals. At the same time, I made contact with Rio Tinto to check their position. I was advised that the Rio process to review its investment was ongoing, and that there was no immediate proposal to sell the equity in BCL.

So I then wrote a letter to the Prime Minister in mid-December saying it was not acceptable to Bougainville that the National Government become the major shareholder in, and in control of, BCL. I made it clear that if Rio Tinto does decide to withdraw from BCL, its shares must come to the ABG and the landowners. In addition, I said, Rio cannot be permitted to escape its clear responsibilities for an environmental clean-up, and for other mining legacy issues.

I also decided that because of the ‘strange’ information about Rio received from Mr. Micah and Mr. O’Neill, and the high degree of uncertainty about Rio’s plans, that I should re-establish direct communication with Rio Tinto. I had begun that direct communication in July last year at a meeting I had with their senior representatives in Singapore.

The main issues I raised in that meeting concerned why the Rio review process was taking so long – it had then been ongoing for 11 months. I also communicated to Rio the continued ABG and landowner interest in engaging with Rio and BCL about jointly examining the possibilities of re-opening the Panguna mine.

We achieved no concrete progress at that July meeting. But the ABG did make clear our view that if Rio does decide to withdraw from BCL that the ABG strongly opposes transfer of the equity to the National Government. I also indicated that we would then seek transfer of the equity to the ABG, and an environmental clean-up. Rio indicated willingness to negotiate such issues, but otherwise did not specifically respond to what I raised.

Rio agreed to my December proposal for renewed direct engagement, and we met again in Singapore in February. I was accompanied by the Minister for Mining and the Minister for Public Service.

This time we put a much more specific Bougainville position. I expressed deep concern about both the very long time that the Rio review of its investment in BCL was taking, and Rio’s failure to communicate at all about its progress.

After all, the ABG and landowners are significant stakeholders, and Rio has duties, that it acknowledges in its own published policies about how they do business, to maintain open communication with stakeholders.

We also emphasised again that the ABG and landowners remain willing to engage with BCL and Rio about jointly examining the possibilities of re-opening the Panguna mine.

However, I also said that if Rio does decide to end its investment, then the ABG remains completely opposed to any equity transfer to the National Government. Instead, there must be equity transfer to the ABG and landowners, without any payment.

I also stated firmly the ABG position that Rio must take full responsibility for an environmental clean-up, and for dealing with other major mine legacy issues.

I emphasised the history of BCL in Bougainville. Although it may have operated legally, under colonial legislation, the basis for the Bougainville Copper Agreement was clearly deeply unjust. It was not based on anything like the informed consent of impacted landowners, and almost completely ignored the concerns and interests of those landowners, and of Bougainvilleans more generally.

It was the long-term impacts of the injustice that led to action, not just by Ona and Serero, but also Damien Dameng, young mine workers, leaders of the Arawa Mungkas Association and the Bana and Siwai Pressure Groups, and others. Their key goal was NOT the long-term closure of the mine, but instead forcing BCL and the National Government to stop ignoring them. Instead, they wanted to negotiate a new and fair agreement, taking account of the concerns of landowners and the rest of the Bougainville community. Long term mine closure was not their goal, but rather the result of the much wider violent conflict that resulted from the conduct of first Police mobile squads and then PNGDF units deployed to Bougainville.

We stated clearly the need for Rio to honour the lessons that it had learnt from its Bougainville experience, and which it has since applied to its operations world-wide. As a result, widely published and advertised Rio policies emphasise principles of corporate social responsibility, informed consent by impacted indigenous communities, and the need to operate on the basis of terms that are just for all stakeholders.

The Rio officials made no official response. Other than emphasising the complexity of the issues involved, no explanation was offered for the long delay in completing the investment review. When pressed on when it could be expected to be complete, they indicated probably before the end of 2016.

In relation to the issues I raised about transfer of equity and Rio being responsible for a clean-up etc., I can understand that they might have some difficulties with what we put to them. Rio might feel, for example, that its majority-owned subsidiary (BCL) operated legally – in accordance with the laws of the day. Yet it lost everything at Panguna as the result of what they might see as a small violent group opposed to mining.

But if that is Rio’s position, then quite apart from the fact that the mine did not close because of Bougainville opposition to mining, in addition Rio would be ignoring its gravely serious responsibilities.

Rio Tinto is a foundation signatory to the sustainable development, and other principles of the International Council on Mining and Metals (ICMM). Those principles are absolutely clear that the responsibilities of a mining company are not limited to its legal obligations alone – especially its legal obligations under deeply unjust colonial laws.

In today’s world, there is no doubt that Rio Tinto would be subject to intense international public criticism if it tried to walk away from its responsibilities for the environmental damage and other unjust legacies it created, or contributed to.

I presented Rio with a two page statement of the ABG position, and I seek leave of the House to table that document. I will arrange for copies to be provided to all members of the House.

The Rio officers indicated that they would consider the ABG position, and would respond within 2 to 3 months, probably at another meeting in Singapore. I am yet to hear more about such a meeting.

But I can assure this House, the Landowners from the former Panguna lease areas, and all other Bougainvilleans, that under my leadership, the ABG will continue to make it clear to both the National Government and Rio Tinto that Bougainville remains determined to protect its own interests.

It is not an option for the National Government to become majority shareholder of BCL.

If, as now seems highly likely, Rio decides to end its involvement in BCL, the equity must come to Bougainville, and Rio Tinto must accept its full historic responsibilities, and honour its obligations to Bougainvilleans. It cannot just walk away from Bougainville, and at the same time pretend to hold itself out to the world as a highly responsible company that learnt from its horrific experience in Bougainville by adopting new and appropriate modern standards of corporate responsibility.

I ask this House, and the people of Bougainville, to support my Government in its ongoing, life and death struggle, to protect the interests of the landowners, and of the wider Bougainville community.

Thank you, Mr. Speaker.

 

 

 

Bougainville News : Momis : Debate on the process for lifting the ” moratorium ” on Bougainville mining exploration

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It should be no surprise to Members here today that in participating in this debate on the future of the ‘moratorium’, I am deeply concerned to ensure that the issues involved are discussed thoroughly, with care, and with the most careful attention to the need to fully protect the interests of Bougainvilleans. After all, that ‘moratorium’ protected our interests over many years. We need to consider the issues involved most carefully before deciding what should be done.

I’d like to comment briefly on the main options for a decision on the ‘moratorium’. The options include:

  • Maintaining the moratorium;
  • Lifting it partially, for limited specific areas of Bougainville;
  • Lifting it fully, for all areas of Bougainville currently covered by it.”

These matters that I have outlined must be carefully considered by this House when debating the options for decision on the future of the ‘moratorium’. Because of these issues about international tender for exploration licences, and setting up the community mining licence system, I suggest that we should not yet consider the option of fully lifting.

I further suggests that instead we should either maintain the existing moratorium for at least a period of two or three years, or alternatively only partially lift it, for just one or two specific areas. In that way we would allow the time to organise for international tender and for community mining licences “

STATEMENT BY PRESIDENT JOHN. L. MOMIS, TO THE BOUGAINVILLE HOUSE OF REPRESENTATIVES 5 APRIL 2016

Mr. Speaker:

The BEC has recently agreed to a recommendation from the Mining Minister that it is vitally important that this House discuss the future of the ‘moratorium’ on mining exploration.

The ‘moratorium’ was originally imposed 45 years ago, in April 1971, by the colonial Administration. It prevented any mining exploration licences for areas of Bougainville other than those already covered by BCL leases. It was imposed in response to the deep concerns of Bougainvilleans communicated to the colonial Administration by their then leaders.

45 years ago, I was a young, recently ordained Catholic priest working in Kieta. I was being called upon by landowners to support them in their struggle with CRA and the colonial Administration. So I was one of those leaders whose request resulted in the moratorium being imposed. It was imposed to protect our people from the unlimited mining exploration and development that they feared might :

It should be no surprise to Members here today that in participating in this debate on the future of the ‘moratorium’, I am deeply concerned to ensure that the issues involved are discussed thoroughly, with care, and with the most careful attention to the need to fully protect the interests of Bougainvilleans. After all, that ‘moratorium’ protected our interests over many years. We need to consider the issues involved most carefully before deciding what should be done.

When the last ABG House proudly passed the two Bougainville mining laws – the Bouganville Mining (Transitional Arrangements) Act 2014, and the Bougainville Mining Act 2015 – both laws retained the ‘moratorium’. It was adopted as if it was a reservation of land from mining exploration made under the Bougainville Act.

Members need to be very clear about what the Bougainville Mining Act 2015 says about lifting such a reservation (or moratorium). It gives the power to the BEC. The BEC can lift it partially (just for particular parts of Bougainville), or fully (for the whole of Bougainville). But when the BEC considers lifting the reservation, either partially or wholly, it must first get advice about its proposed decision from the Bougainville Mining Advisory Council (the BMAC). It must also provide an opportunity for debate of the proposed decision by this House.

This procedure is very different from how a reservation under the National Government Mining Act is lifted –that needs just a decision from the National Government Minister, with no consultation or advice required. In developing the ABG’s law, we were determined that an issue of this importance had to be subject to careful scrutiny. That’s why the decision cannot be made just by the Minister – it requires a BEC decision, and only after receiving considered BMAC advice and hearing a debate on the issues involved held in this House.

As the Minister also emphasises, as yet the BEC has not made any decision about the future of the ‘moratorium’. We are not coming to you with a proposed decision. Instead, we are asking this House to debate what we should do about the ‘moratorium’. We are doing this to generate broad public discussion of the issues involved.

Members might ask for an explanation of the reasons why we need such a public debate about lifting the ‘moratorium’. There are several reasons.

First, lifting the ‘moratorium’ is still a highly sensitive issue for many – perhaps even most – Bougainvilleans.

Second, many of the same issues that led to the request for the moratorium in 1971 remain. Even people open to some mining in Bougainville want it very strictly limited.

Third, if we do lift the moratorium, and especially if we lift it fully (that is, for the whole of Bougainville), it is likely that a very large proportion of the land of Bougainville will soon be covered by exploration licences. That will have huge impacts for all of us. There will be great difficulty turning back from such a massive change if it produces results that we do not like.

So there is a clear need for the most careful deliberation on the issues involved.

Ideally we want to have a major Bougainville-wide public consultation and awareness campaign about issues of such great importance. But because of our serious financial difficulties, that is not an option for us at the moment. So instead, the BEC has agreed to an initial debate in this House. That must be a thorough, careful and well-informed debate.

I believe that it is also essential that we engage with our people as part of this debate. So I recommend, in the strongest terms, that this House debate the ‘moratorium’ issue in two separate sessions. One should be now. Then when the issues have been carefully considered, I recommend that all members go out and consult the people of their constituencies, and seek their views. They should then have a second round of debate at the next House session – a debate further informed by the views of our people.

I’d like to comment briefly on the main options for a decision on the ‘moratorium’. The options include:

  • Maintaining the moratorium;
  • Lifting it partially, for limited specific areas of Bougainville;
  • Lifting it fully, for all areas of Bougainville currently covered by it.

Before we consider options, we need to consider carefully how either partial or full lifting of the moratorium would interact with, or impact on, other major aspects of the Bouganville Mining Act 2015. There are at least two aspects of the Act where there could be major impacts.

The first is the provisions on putting exploration licence application for particular areas out for international tender. The aim of international tender is to see if the ABG can raise significant revenue from exploration licences – for international tender could perhaps bring offers of millions of kina instead of a usual small exploration licence fee.

To put areas out to international tender, the Mining Department must first identify areas that have a potentially high prospective value, and then get geological survey done for those areas. The resulting information would then be made available as part of the tender process, so those offering to pay for a licence have some real information on which to base competitive bids.

If the ABG were to lift the ‘moratorium’ fully, we would be shutting the door on the provisions on international tender, for many years to come. The reason is that lifting the moratorium will mean that most, if not all, highly prospective areas will very quickly be covered by exploration licences. There will be nothing left to deal with under international tender processes.

If we are to keep the door open to using the international tender process in the next few years, we need some time to identify prospective areas and find the funds needed to get the necessary geological survey work done. We need perhaps 2 or 3 years to get such things organised.

In our current serious situation of financial crisis, we would be very unwise to throw away the possibility of raising serious funds by tendering exploration licences.

The second aspect of the Mining Act where fully lifting the moratorium would have major impacts is the arrangements for small-scale mining. Under the Act, COEs or Community Governments have authority to request the ABG to reserve areas exclusively for small-scale mining. Once areas are reserved, then the COE or Community Government will have the authority to issue licences to Bougainvilleans who are landowners of the area they are mining, or have permission of the landowners. That will then be the only basis for small-scale mining to be legal.

The Act gave the Mining Department time to get the new system of community mining licences organised. It made existing small-scale mining (in the absence of the new licences) legal for just 18 months, ending in October 2016.

I am very concerned now because I’ve recently been advised that the Mining Department has done nothing at all to organise the community mining licence system.

The problem now is that if the ‘moratorium’ if lifted for the whole of Bougainville, before the community mining licence system is set up and operating, then it will probably be almost impossible to have land reserved for community mining licences. The reason is that exploration licences will almost certainly be granted for most areas where small-scale mining is occurring. Once an exploration licence is granted over land, there can be no reservation of land for community mining licences without agreement of the exploration licence holder. Experience elsewhere suggests that exploration licences will be very reluctant to agree to community mining reservations that will encourage small-scale miners.

So again, we need some time, perhaps 12 to 18 months more, to allow the Mining Department to do what it should actually have been doing over the past 12 months – that is, working with the Community Government Department and other departments to set up the community mining licence system.

If we do not allow the time for this, then most, if not all, small-scale mining in Bougainville will be illegal. It will become more or less impossible to establish the community mining licence system. But of course, that will not stop small-scale mining from continuing. So that will set up serious risks of tension, confrontation and conflict between small-scale miners and exploration licence holders.

These matters that I have outlined must be carefully considered by this House when debating the options for decision on the future of the ‘moratorium’. Because of these issues about international tender for exploration licences, and setting up the community mining licence system, I suggest that we should not yet consider the option of fully lifting.

I further suggests that instead we should either maintain the existing moratorium for at least a period of two or three years, or alternatively only partially lift it, for just one or two specific areas. In that way we would allow the time to organise for international tender and for community mining licences.

There would also be other advantages in partial lifting, for just one or two areas. That would also allow the Mining Department the time it is likely to need to see how well it is able to administer the new tenement applications system established under our new Mining Act.

The Mining Department is a completely new and untried organisation, with no established experience of operating our new Act. Clearly the Mining Department must already be struggling to carry out its heavy responsibilities under the Act – for that would be the only acceptable explanation for its compete failure, so far, to do anything to establish the community mining licence system.

Once it has established that system, we could perhaps feel more confident that the Department is developing the kind of capacity it will be needing to effectively

My recommendations to the House to consider in this debate are:

  1. To debate the issues and options for lifting the moratorium thoroughly during this session of the House, and when the issues have been covered fully, the House should adjourn that part of the debate to return to our constituencies to consult our people on the issues involved;
  2. That there should then be a further debate on the issues at the next session of this House;
  3. That in that second debate, the options for lifting should be carefully evaluated, taking full account of likely impacts of maintaining the moratorium, partial lifting, or full lifting on both:
  4. Setting up the system of international tenders for exploration licences;
  5. Setting up the Community Mining Licence system for small-scale mining.6
  6. The House should consider the possible advantages of a partial lifting of the moratorium in just one or two areas, thereby allowing the Mining Department time to get the arrangements under the Act operating properly.

I must assure the members of this House that as President, I believe that this debate on the future of the moratorium is one of the most important debates we have ever held.

I assure you, Mr. Speaker, and all members, that I, and the BEC, will listen most carefully to the views expressed in this debate, and in the wider public debate, before we make any decision on lifting the moratorium.

I must also remind members that if we do later make a decision to lift it either partially or fully, then that decision too will have to be referred for advice of the BMAC, and the House will have to have the opportunity to debate the decision. So the future of the ‘moratorium’ could be a matter before this House for quite some time.

In my view, Mr. Speaker, it is entirely appropriate for the House to take an extended time to deal with such an important issue.

I look forward to hearing the contributions to the debate.

Thank you, Mr. Speaker.

Bougainville Political News: PM O’Neill wasn’t consulted over new Australian mission in Bougainville

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Papua New Guinea Prime Minister Peter O’Neill has said he was not consulted by Canberra over plans to set up a diplomatic post in Buka ,Bougainville, a politically sensitive autonomous region expected to hold a referendum on independence.

Report from The Australian online VIEW HERE

The federal government announced on Tuesday it would open five new overseas missions as part of this year’s national budget, including one at Buka in Bougainville.

Australian diplomats will also be dispatched to Doha, Mongolia and Phuket as Australia seeks to expand its footprint and spruik trade and investment opportunities.

But Mr O’Neill said there had been no consultation and no agreement to establish a post in Bougainville.

“We were shocked to learn from the budget documents that Australia is planning on establishing a diplomatic post in Bougainville,” Mr O’Neill said on a visit to Sydney today.

“I want to say that there has been no consultation on this proposal and there is no agreement to proceed,” he added.

“As we respect the territorial integrity of others, we expect others to respect ours as well.” He said that the region was a historically and politically sensitive area for PNG, with Bougainville voters expected to elect authorities in June who will call for a referendum on independence from the country as part of a 2001 peace agreement.

Under the agreement, Bougainville was promised the right to hold an independence referendum between 2015 and 2020.

It followed an almost decade-long, bitter guerilla war beginning in 1988 that claimed 10,000 lives.

The separatist conflict was the bloodiest in the Pacific since World War II, and ended when the New Zealand government helped broker a truce signed by all factions in 1997.

An Autonomous Bougainville Government was established in June 2005 as part of a United Nations-sponsored process.

O’Neill said that PNG Foreign Minister Rimbink Pato was requesting more information about Australia’s proposal.

Pato Thursday described the plan as “outrageous” and “mischievous”.

“I’ve directed the acting secretary to call in the Australian high commissioner to explain the media accounts of this mischievous proposal to open a foreign mission on Bougainville,” Pato said in a statement, local media reported.

Foreign Minister Julie Bishop insisted the matter was discussed with the PNG government during a visit she made to the country last December.

“Australia has a significant and growing development program in the Autonomous Region of Bougainville, which is almost 50 per cent higher than 2012/13, and will continue to partner with the PNG government in supporting economic growth throughout PNG,” her spokeswoman said.

Bougainville is home to the giant Panguna copper deposit. A Panguna mine run by Bougainville Copper, a subsidiary of Australian-listed Rio Tinto, was forced to close in 1989 during the conflict.

Rio Tinto has said the PNG government as well as Bougainville’s leadership were supportive of restarting operations at what is one of the South Pacific’s largest mines for copper and gold.

Bougainville Election News : Mekamui Tribal Government says Panguna 100 % behind Momis

 

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“The Mekamui Tribal Government of Unity stands behind President Momis as we see him as the person who will lead us to freedom,”

“The Mekamui faction has also started the realignment process with the Autonomous Bougainville Government that will see reintegration and unity amongst all Bougainvilleans,”

Mekamui Defence Force hard man, Moses Pipiro declared that the people in Panguna area were 100 percent behind President Momis : Picture presenting shell money

Please note the following text supplied by ABG media

The Mekamui Tribal Government of Unity have pledged their support to incumbent ABG President Grand Chief Dr John Momis in this year’s ABG General Elections.

Mekamui Defence Force hard man, Moses Pipiro declared that the people in Panguna area were 100 percent behind President Momis’ bid to retain the ABG Presidency in a political rally held in the heart of the Panguna Township yesterday.

“The Mekamui Tribal Government of Unity stands behind President Momis as we see him as the person who will lead us to freedom,” Mr Pipiro said.

“The Mekamui faction has also started the realignment process with the Autonomous Bougainville Government that will see reintegration and unity amongst all Bougainvilleans,” he added.

“President Momis has been with us from the very start of our struggle for self-determination and he is the only one who knows where will go,” Mr Pipiro said.

Former ABG President James Tanis was also amongst a host of leaders from North, South and Central Bougainville who endorsed President Momis’s candidacy.(file picture )

 

Mr Tanis said that his decision not to stand for this year’s elections was to allow President Momis to complete the long journey that is Bougainville’s move to self-determination and should the people choose, total independence.

“President Momis’ is on the verge of completing what he started more than 40 years ago when he took up the fight for our people’s freedom,” Mr Tanis said.

“It would be unjust for me to usurp his leadership, as a respected elder statesman he has the necessary experience and will to lead us to independence,” Mr Tanis added.

“With Bougainville’s Referendum to be held within the term of the third and final Bougainville House of Representatives, as stipulated in the PNG Constitution, Bougainvilleans must know the type of leader they want to lead them and President Momis is that leader,” Tanis said.

In attendance at the rally were ABG President, Grand Chief Dr John Momis, Mekamui Government of Unity President, Philip Miriori, former Clerk of the National Parliament and Chief Ombudsman Simon Pentanu and various ABG Members from Central and South Bougainville.

 

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Bougainville Mining News: BCL chairman addresses AGM (Download full transcript)

panguna

“Let me assure you that the vision to return to active exploration and profitable, sustainable mining remains, with the active support of many local stakeholders.

The Board and Management of Bougainville Copper Ltd are well positioned to recognise the opportunities inherent in recent challenges, and to maintain progress in a new year.

I believe the economic self-sufficiency of Bougainville needs the successful development of Panguna “

The following is a transcript of the address given by BCL Chairman Peter Taylor to the Annual General Meeting in Port Moresby on Wednesday 29 April 2015. A PDF of the transcript can be downloaded here.

The Annual General Meeting gives me an opportunity, as chairman, to make a statement concerning the up-to-date affairs of the company. Copies of this statement will be distributed as you leave today, and with your permission, I would now like to present it.

Mining Legislation

The most significant event to impact the company in 2014 was the passing of new mining legislation by the Autonomous Bougainville Government, which creates uncertainty regarding Bougainville Copper’s rights to mining and exploration licences. The Bougainville Mining Act 2015 was passed on April 1, substantially mirrors the clauses of the Interim Mining Act, which has reclassed the existing Special Mining Lease as an Exploration Licence. There remains uncertainty over the seven (7) leases for mining purposes.

The Company made applications for new licenses and to affirm rights which appear to have been impacted by the interim ABG mining legislation. These applications have been declined. The final Bougainville Mining Act 2015 prevents the Mining Registrar from accepting or registering applications for tenements before October 1, 2015.

The company is taking some comfort from correspondence and continued dialogue with the ABG and President Momis where he acknowledges that the company is a holder of a Special Mining Lease prior to the Act coming into force. The Act substitutes the Special Mining Lease (SML) with an Exploration Licence. The Company will seek formal granting of the exploration licence and exclusive access to the SML area.

Given the potential impact of the new legislation, the Board has decided to take a full impairment of the value of the mine assets, and to restrict the flow of funds into some of BCL’s work programs. The impairment dramatically decreased the value of the company fixed assets and has resulted in a corresponding impairment expense in the Statement of Comprehensive Income. I will discuss the impact of the impairment shortly when I summarise the 2014 results.

Company representatives continue to engage with the National Government and the Autonomous Bougainville Government seeking clarification of the company’s rights, and at the same time to explore legal options, as well as taking steps to protect BCL’s priority position should re-commencement of mining at Panguna be viable and approved.

The company’s major shareholder Rio Tinto announced in August 2014 “in light of recent developments in Papua New Guinea, including the new mining legislation passed earlier this month by the Autonomous Bougainville Government, Rio Tinto has decided now is an appropriate time to review all options for its 53.83 per cent stake in Bougainville Copper Ltd”

The review is ongoing.

President John Momis has emphasised that the new mining legislation was needed to address unregulated mining activity on Bougainville, and was not aimed at discouraging BCL. President Momis has supported redevelopment of the Panguna mine, subject to community support.

Given the uncertainty the company has minimised its Bougainville work programs.

Financial Results

The results for the year ended December 31, 2014 as reported in the Annual Report, record an operating loss of K9.1 million and an impairment charge of K166.6 million which equates to an overall loss of K175.7 million. This compares with the profit of K6.8 million in the previous year. The impairment charge reflects the diminishing rights of the company to the mine assets and resources with the directors acting prudently in impairing the mining assets completely. We continue to seek advice regarding all our options.

The value of the mining assets in 2013 was K197.9 million and after the asset revaluation reserve of K31.3 was reversed the net impact of the impairment recorded in the statement of comprehensive income was 166.6 million.

Revenue from Interest and Dividends (K4.9m) was slightly lower than budget (K5.1m).

Operational expenditure overall (K14.1m) was lower than budget (K15.9), reflecting the scaling back of work programs.

The company will not pay a dividend.

The company has sufficient funds to cover its recurrent expenditure under the current three year plan and is debt free.

Taxation

I am pleased to report to the shareholders that the company has negotiated a settlement with the Commissioner of the Internal Revenue Commission (IRC) in PNG. A scheduled second mediation occurred on 2nd April 2015. I am able to report the court has confirmed the company will receive back K39.7 million from the funds held on term deposit with the Registrar of the High Court. This concludes this long outstanding matter.

There was a total of K70.6 million reported in the 2014 Financial Statements as receivable. The IRC was paid K13.0 million in addition to K4.4 million of interest withholding tax. K14.0 million was agreed to be paid to the IRC in settlement from the K53.2 million, held on IBD for the national court, which leaves the Company with around K40 million.

Financial Assets and Investment strategy

At the end of 2014 Bougainville Copper’s liquid assets were K4.7 million in cash and K102 million in Australian equities. The company’ financial position is linked to the performance of the Australian equities market, which is in a positive phase.

In 2014 Bougainville Copper’s Australian Equities Portfolio, performed broadly in line with the Australian Stock Market.

It is intended to continue with the current investment strategy, for as long as the investment committee deems this to be the best option, or until such time as equities need to be sold to fund further work programs.

The company’s cash position is enhanced as a result of the conclusion of the taxation dispute.

Governance

Bougainville Copper has governance reporting obligations to the Australian Securities Exchange (ASX). A statement on the company’s compliance with the ASX Corporate Governance Principles and Recommendations is contained within the annual report. In addition, the company has adopted policies that seek to comply with Rio Tinto’s comprehensive range of policies including safety, environment, financial management and other governance practices. The company has chosen to early adopt the latest edition of the ASX principles, for the 2014 Financial Statements, one year before the mandatory adoption date.

Safety and Risk Management

Bougainville Copper is particularly safety conscious and has in place a comprehensive set of safety standards to ensure that it provides a safe working environment and that its employees and contractors comply with best practice safety procedures. The company complies with the requirements of the Rio Tinto safety policy.

The management of Bougainville Copper undertakes regular risk reviews.

Bougainville Copper Foundation

Bougainville Copper has continued to support the work of the Bougainville Copper Foundation. This is an independent, not-for-profit company that has been funded by Bougainville Copper since its inception.

In 2014, as in previous years, the Foundation had more than 100 Bougainville students on scholarships. Many are continuing to be supported in 2015.

The Foundation also undertakes special project on a needs basis with the emphasis placed on education, peace and good governance.

The Foundation is proud of its achievements and those of its former scholars who are contributing to the development of Bougainville.

The Foundation continues to review its objectives and future direction. As mentioned, the Foundation is an independent body, and it is hoped that its range of activities will not be materially reduced by the factors that are now constraining some of BCL’s social and work programs.

I will now report on some other current events which have a bearing on the company’s prospects and its progress towards the vision of reopening the mine.

Work Programs

In view of recent actions of the Bougainville legislature, funding to progress all studies and welfare programs will be limited until uncertainties of tenure and the legislative regime are clarified.

During the period, limited work continued to refine the 2013 Order of Magnitude Study, which is an exercise aimed at giving the company guidance as to the most appropriate and cost effective way to re-develop the Panguna resource. It is one of the Board’s major tools in evaluating options going forward.

The Order of Magnitude Study is based on many assumptions including commodity prices, market demand, investor risk, opportunity costs, security of tenure and others. In brief it describes a new mine at Panguna processing between 60 million and 90 million tonnes of ore per annum, over a mine life of 24 years, with an estimated capital cost of 5.2 billion US dollars, as estimated in 2013.Further, more detailed studies, such as a pre-feasibility study and a feasibility study are required to confidently determine the potential economic viability of re-opening the mine. Only upon completion of those studies will the Board be sufficiently informed to take a decision whether or not to proceed with financing and commencement of construction.

The time-line to first production could be between five and seven years from the date of approval and financing.

Many of the assumptions, including the size of the resource, the life of the mine, and the start-up cost, may vary significantly when the company gains access to the former mine site and undertakes further work.

Several other studies were initiated by the company, in conjunction with the Bougainville Administration, aimed at providing a clearer picture of the environmental conditions, the needs of the population, training and employment readiness, as well as land ownership and social mapping. However the company is not in a position to commit to funding these studies until tenure is assured.

Bel Kol

Representatives of the customary landowners from the mine lease areas have requested that Bougainville Copper perform a cultural ceremony with them, Bel Kol.

The ceremony is aimed at restoring relationships between Bougainville Copper, landowners, the Autonomous Bougainville Government, ex-combatants and community leaders.

Significant progress was made towards Bel Kol by the end of 2014. A senior Bougainville Copper manager began regular travel and participated in discussions in Central Bougainville.

Bel Kol is now postponed until after the Bougainville elections. As a gesture of goodwill, the company will make commitments to support programs focused towards health and education initiatives.

The company has asked for open access to Panguna and the area covered by the original Special Mining Lease, assurances of safety, and an invitation to establish a presence in Arawa, as a base for field work, baseline studies and social mapping previously mentioned, and for the recruitment of local people to participate in drilling and other evaluation and de-risking programs

A training program has been jointly designed, to be supported by the company, to prepare members of the lost generation for work opportunities.

Joint Panguna Negotiations

The Joint Panguna Negotiation Coordination Committee (JPNCC) consisting of National Government and ABG representatives, together with landowner and company delegates, was active in 2014 in defining several baseline studies and preparing to implement them.

The JPNCC has established a Multi Trust Fund, to manage joint monies including aid, and to conduct the process of tendering and awarding the baseline studies, in order to vest the findings of studies with arms-length transparency, and credibility with all parties. The Trust Fund formally came into effect in November 2014.

Senior PNG statesman Sir Peter Barter accepted chairmanship of the Multi Trust Fund, and as a respected Bougainville peace-maker, reminded the people of his long held view that there can be no meaningful autonomy without a viable economy.

Throughout the year, company management maintained its own fruitful dialogue with a wide range of Bougainvillean interest groups, through regular meetings at Buka, Arawa and Kieta, with landowners, ex-combatants, women’s groups, ABG agencies, aid donors and other stakeholders.

Events on Bougainville

There have been a number of developments in Bougainville, including Prime Minister Peter O’Neill who visited Bougainville and Panguna in January 2014, and visited again in December 2014 to re-open the Aropa airport.

Australia’s Foreign Affairs Minister Julie Bishop visited the region.

Preparations for elections to the Parliament of the Autonomous Bougainville Region are gathering pace, polling scheduled for May 2015, with results known during June.

President John Momis is one of nine candidates seeking election.

There has been a re-structure of the Bougainville Public Service administration.

The relationship between President Momis, his government, and the Board and management of Bougainville Copper remains cordial.

The regulatory regime and the company’s position

The practical effect of the permanent mining legislation requires further clarification so that the long term mining regime for Bougainville is settled, allowing the company to factor these terms into its assessment of the viability of the potential mine redevelopment.

The next phase of study, a pre-feasibility study on reopening the mine, will be very expensive, and requires certainty of a workable mining regime and conditions prior to committing the study funds.

I wish to restate that even if further studies confirm that recommencement of mining is economically attractive, mining at Panguna cannot recommence unless all parties: the Landowners, the Autonomous Bougainville Government, the National Government of PNG, and BCL, are acting in close accord, now and into the future.

Funding and sovereign risk assurance for the project will require a united effort. Investors also need a fair and stable regulatory regime that gives them the confidence to commit to a project that will require billions of dollars of investment.

Conclusion

Let me assure you that the vision to return to active exploration and profitable, sustainable mining remains, with the active support of many local stakeholders.

The Board and Management of Bougainville Copper Ltd are well positioned to recognise the opportunities inherent in recent challenges, and to maintain progress in a new year.

I believe the economic self-sufficiency of Bougainville needs the successful development of Panguna.

The company faces the coming year with resolve and determination.

For your further information, I remind you that reports and commentaries of the company’s activities are regularly reported to the Australian Securities Exchange and associated media, and can also be accessed on our website.