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Wednesday 24 October 2012

Rio Tinto to get out of Bougainville


by Murray Horton

Rio Tinto, the world’s biggest mining company (which owns Comalco and the Bluff aluminium smelter), is finally facing reality and has announced that it is going to sell its Panguna copper and gold mine, on Bougainville. This unimaginably huge, open cast mine (boasting the world’s biggest hole) was regularly described as the jewel in the crown of this most voracious of mining transnationals. During its years of operation it constituted Papua New Guinea’s single biggest source of revenue, but it was revenue that came at a colossal cost to Bougainville, an island that had a long history of attempting to secede from PNG. Things came to a head in 1989, when a land owners’ armed uprising closed the mine (permanently, as it turned out) and sparked the war of independence that caused so much bloodshed and suffering (mostly caused by the brutal PNG blockade of the island).
Vandalized BCL properties in Panguna, Bougainville

New Zealand played an honourable part in brokering peace talks in the late 1990s and they are ongoing, being on the brink of producing Bougainville as an autonomous province of PNG. The PNG military became re-established on the island (having been completely driven off at the outset) but they, and all other outsiders, including New Zealand’s and other countries’ peacekeeping troops, have never been allowed to get anywhere near Panguna, which remains firmly under the control of Francis Ona, the leader of the original uprising. Ona is still committed to an independent Bougainville (to be renamed Mekamui) and has never been part of the peace process.

Despite having been involuntarily closed down since 1989, Bougainville Copper Ltd (54% Rio Tinto; 19% PNG government; 27% public shareholders) has remained one of PNG’s most profitable companies – it made $A10 million profit in the 2000/01 financial year – despite, or because of, undertaking no other activity. Even if it sells its Bougainville assets, it will retain $A79 million cash. The question arises as to whether it will find a buyer. Presumably it is trusting in the hope that springs eternal in the hearts of fellow mining executives (or should that be greed?). The company has set aside $A14.5 million for compensation to Bougainville land owners – who hold out the possibility that mining might be allowed to resume in several years time, under new ownership. But Rio Tinto itself faces a multi-billion dollar class action suit in the US, over its conduct in Bougainville.

The Panguna mine has been idle since 1989 and, while the millions of dollars worth of mining equipment has been rusting away in the tropical sun and rain, the badly battered surrounding environment has had a chance to partly recover (the operation is so gargantuan that it created its own micro-climate). Elsewhere in the region, other deadly relics of the Bougainville saga are also quietly rusting away. Since the aborted 1997 attempt by the PNG government to win the war using the foreign mercenaries of Sandline International, their seized helicopter gunships have been stored in an Australian Air Force base, in the Northern Territory. Sandline wants to sell them to recoup some of its losses – but assault helicopters are a prohibited export to most countries. So they sit, unmaintained and unsaleable, in a hangar.

The Panguna mine and Rio Tinto brought nothing but grief to the people of Bougainville and Papua New Guinea. The island, the country and the region are well rid of them. And we need to salute the heroic struggle by the Bougainvilleans to rid themselves of this parasite. They have paid a very high price but they are well on their way to the self-determination they have fought for all along.

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