A giant stirs in Bougainville

PANGUNA, BOUGAINVILLE — After more than 20 years in limbo, the small Papua New Guinea island of Bougainville is closer than ever to reopening the infamous Panguna mine.

It was once the world’s largest open-pit copper-gold mine before locals forced it shut in 1989. But the mine was far from depleted at the time, and legal owner  Bougainville Copper (BOC-A) — itself 53.83%-owned by  Rio Tinto (RIO-N, RIO-L, RIO-A) — recently reminded the world just how much wealth remains.

Bougainville released an order of magnitude study in early February that shows an indicated resource of 1.5 billion tonnes grading 0.3% copper and 0.33 gram gold per tonne for 10.1 billion lb. copper and 16.1 million oz. gold, plus 300 million inferred tonnes at 0.3% copper and 0.4 gram gold gold for a further 1.5 billion lb. copper and 3.2 million oz. gold.

That’s on top of the 9.3 million oz. gold and 6.6 billion lb. copper that Bougainville had pulled out by 1989, when locals, frustrated at a lack of benefits from the mine, began sabotaging the operation.

The situation escalated into an all-out civil war, with the islanders fighting for independence from Papua New Guinea.

By the time a cease-fire was reached in 1997, upwards of 20,000 had died on the island of about 200,000 people, and mining has been off limits ever since.

As part of the peace deal that ended the civil war, Bougainville was promised a referendum on independence from Papua New Guinea, to be held between 2015 and 2020. But before becoming independent the island must show that it’s economically independent, which it isn’t. And so, more people in Bougainville are hoping that mining will bring the rapid economic development required for the island to become the world’s next country.

But it is a long road before Bougainville can access the resource, if ever. There are many factions on the ground with differing opinions on how the island should move forward, and whether or not to welcome Bougainville — or any other mining company — to the island. The Autonomous Bougainville Government estimates that it would take two to three years to get through the consultations and reconciliations needed before any final decision is made.

But momentum is gathering, with politicians and other leaders talking about reopening the mine. On the ground, locals say they are dreaming about how a rich mine could transform the struggling island, if a mining deal is made on their terms.