Bougainville mine may be reopened

Bougainville Copper, a unit of RTZ Corp (NYSE), reported a loss of A$19.8 million for the year ended Dec. 31, 1991, compared with a loss of A$30.1 in 1989. Operations at the company’s copper mine on Bougainville Island were suspended May, 1989, when production was disrupted by island residents who were seeking, among other things, a greater share of revenue generated by the mine Although Bougainville had no mining operations during the year, it established a small management team at Port Moresby following withdrawal of all company employees last March.

“There continues to be considerable uncertainty surrounding the future of the Panguna mine,” said RTZ. “Reopening of the mine would require a re-establishment of political stability on Bougainville Island.” Since the company withdrew its personnel from Bougainville last year, there has been no care and maintenance at the Panguna mine. “It seems certain that deterioration of the mine assets will have occurred in 1990 because of this lack of care and maintenance,” the company said. The mine was also left exposed to the elements, possible vandalism, pilferage and militant action.

When conditions on Bougainville permit, the company intends to resume and continue operations, although it is not possible at present to determine when this might be achieved, said RTZ. Since it has not been possible to adequately determine the value of Bougainville’s assets, a full write-off or provision for write-down of the Panguna mine could not be made in 1990.