The Executive Chairman of Bougainville Copper Limited, Sir Mel Togolo, has confirmed the company is talking to prospective partners about reopening the mine. However, he tells Business Advantage PNG he is unwilling to put a date on when it might reopen.

The Panguna mine began operations in 1972 and closed in 1989.

It’s been almost 10 years since the prospect of reopening the Panguna gold and copper mine was first raised. According to Sir Mel Togolo, Executive Chairman of Bougainville Copper Ltd (BCL), there is a long way to go before any timeline can be set.

Togolo, however, is hopeful.

He says his board’s strategy is to prove the company has ‘what it takes to redevelop the mine,’ he tells Business Advantage PNG.

BCL has estimated that the cost of rehabilitating the mine would be about US$5 billion (K16.86 billion), with an anticipated income of about US$75 billion (K252 billion) over its 30-year life.

With consolidated assets of just K112.63 million, the company just doesn’t have that sort of capital and it’s clear that a partner or partners will be required.

‘It’s early days—we are talking to a few,’ he said, without offering further details.

Challenges

Since 2016, when Rio Tinto relinquished ownership of BCL, the company has been owned by the PNG State (36.4 per cent), the Autonomous Bougainville Government (36.4 per cent), European shareholders (four per cent) and 23.2 per cent through the Australian Securities Exchange (ASX).

BCL currently holds an exploration licence for the mine, which the Autonomous Bougainville Government (ABG) refused to extend in January 2018. An appeal is before the courts.

RTG Mining Inc and Callabus Mining, two Perth-based companies, have signalled they want to take over the licence and develop the mine.

‘I’m looking at additional Bougainvilleans to join the board and we’re going through due diligence now to see if we can appoint a male and female Bougainvillean.’

A minority of landowners also object to the involvement of BCL, but Togolo believes the company has three key advantages over other would-be operators. These are a high level of community support, a seasoned board (including Ok Tedi Mining’s Peter Graham, Sir Rabbie Namaliu, Dame Carol Kidu and Sir Moi Avei), and ownership of the intellectual property of the data concerning the geology, engineering, environmental and community characteristics of the mine area.

Advantages

Mel Togolo was appointment BCL’s Chairman in 2018. Credit: Bougainville Copper Limited

‘When you have to start from zero, you have to spend lot of money to get that data.

‘Additionally, we’ve got properties in Bougainville and the Panguna area. All that becomes handy and attractive to people who may want to join us.’

The BCL Board members have been on the boards of other big companies and understand commercial issues.

‘That is a big advantage for BCL—that we have a board which is responsive and can talk at any level of government and community.

‘I’m looking at additional Bougainvilleans to join the board and we’re going through due diligence now to see if we can appoint a male and female Bougainvillean.

‘Once we do that, we can show that we are quite genuine.

Togolo acknowledges that dealing with landowners in PNG and Bougainville is ‘a great challenge’.

‘BCL has a strong team on the ground explaining the process,’ he says.

‘They come from the landowning communities and some of them are actually heads of customary landowner groups, so they know what they’re doing. We’re building trust and relationship. They are important in getting alignment to go forward.’

Bougainville’s referendum

Togolo makes no comment on the independence referendum in Bougainville, scheduled for October 17 this year.

‘We will support the process and respect any decision that’s made by the outcome of the referendum.’

Togolo wants to see the mine start, bit admits it is ‘going to take a while’.

‘My role currently is to get alignment; get an agreement to say “yes, let’s go and do it this way. BCL, you lead the way. Go find partners’ and then we’ll get more people who can help us move forward.”

‘But to give a timeline is unfortunately a temptation that most people fall into.’