.......economically self-reliant:MD
http://www.radioaustralia.net.au/international/...lfreliantmd/1128520
The Rio Tinto-owned copper mine on Papua New Guinea's island of Bougainville has the potential to make Bougainville economically self-reliant, according to the Managing Director of the Rio subsidiary which plans to redevelop it.
Rio-Tinto mine would make Bougainville economically self-reliant:MD (Credit: ABC)
The issue of self-reliance is crucial as Bougainville is due to hold a referendum on independence from PNG between 2015 and 2020, but can only become an independent nation if it has the financial resources to survive on its own.
Presenter: Jemima Garrett
Speaker: Peter Taylor, Chairman and Managing director of Rio Tinto, subsidiary Bougainville Copper
TAYLOR: As far as Bougainville is concerned it would make an enormous difference because from what I have seen they only generate internally, about 5% of their budget at the moment. This has the potential to substantially meet the budget requirements of Bougainville. In the scheme of things for Papua New Guinea it is important there is no doubt about it. It will be in terms of copper and gold production, well certainly in terms of copper it will be the biggest mine in PNG. In terms of gold production it will be second only to Lihir I imagine. There may be mines in the future producing more gold and copper but at this stage it would sit as number two or perhaps even number one in terms of value to PNG
GARRETT: Rio has had its fingers burnt in Mongolia and it is divesting itself of a number of assets. Does it have the appetite for a risky project of this sort?
TAYLOR: Well, I am the Chief Executive of Bougainville Copper and Rio Tinto is but one shareholder, mind you an important shareholder having 54 per cent of the equity in the company. Rio Tinto has so far indicated its interest in continuing as the major shareholder. It supports Bougainville Copper's vision which is to re-open the mine but it has one very important caveat, which Bougainville Copper shares I might add which is that it needs the support of the Bougainville government, the national government, the landowners and the people of Bougainville generally. It has said it will not support re-opening the mine without all of those parties being on board.
GARRETT: So how is progress going in terms of the support of the landowners?
TAYLOR:The situation for the re-opening of the mine continues to improve. It is a slow process but we expect that. My attitude has been and continues to be I would rather take my time and get it right, than rush and get it wrong. I think what is happening on Bougainville is in line with my expectations. The support for the mine re-opening continues to grow and the support for Bougainville Copper as the operator continues to grow.
GARRETT: There is still opposition in Bougainville and it is quite loud and strident opposition - what makes you think you can get over that and that there won't be a situation which unravels into bloodshed again?
TAYLOR:Well, I have never been involved in any resource project that hasn't had somebody who doesn't like it. I mean that is just life. It doesn't matter what it is you want to build, even if it is a road. You will get somebody who doesn't want it to be there because it is near their place or whatever. But look, I know there is some opposition and I think that is healthy. I would be a bit concerned if everybody was all of a sudden in favour. I would say what has changed to make that happen. We have to manage that. We have to be inclusive in terms of the parties that we deal with and I think that once the benefits, as opposed to what some of the protesters might think are the negatives, are explained and that is balanced out for the welfare of Bougainville and its people generally, I think most people will come on board.
GARRETT: You were on Bougainville before the mine closed. What have you learnt personally about from what the people of Bougainville have gone through since that time?
TAYLOR:You are right, I lived on Bougainville working in the mine in the mid-80s and to me it was one of the best experiences I have ever had in my career in the mining industry. I made many friends. I have still got many of those Bougainville friends. It was a tragedy of course for Bougainville and its people and I think and what is really tragic about it is I think it was preventable. In many respects it took so many small individual events to co-incide for the situation to develop the way it did. That is the real tragedy of it, it was a preventable event.
GARRETT: What is Bougainville Copper going to do to make amends for the past?
TAYLOR: I think it is really a question of looking at what it was about the way the mine opened in the first place and how we avoid the things that were done then that led to this discontent and the major one I think is actually including the local people in the planning, in having equity in the project itself, having a more equitable share of the revenue from the mine and being direct recipients of the infrastructure, for example educational opportunities, health opportunities and so on, that the mine can produce.
GARRETT: So how will you go about doing it differently, this time?
TAYLOR: What I have said to the Bougainville government and the landowners is I want them to set the agenda. I want them to tell me what it is that they want. So they will bring their agenda to the negotiating table and obviously we may have to compromise. I mean the mine itself its not going to be so profitable that it will support every wish of every party that will come to the table and indeed the investors expect a return on their money as well. But the different approach is going to be ..it won't be driven as it was in the first place by an Administration from Australia. It will be from day one negotiations between the people on the ground, the landowners in the mine site, the government of Bougainville and the other population of Bougainville.
GARRETT: Bougainville has a referendum on independence coming up between 2015 and 2020. What issues does that raise for Bougainville Copper?
TAYLOR: It is a very important issue for Bougainville Copper and, of course, it is a very important issue for both Bougainville and PNG generally. For us, we need certainty in terms of what the government is that you are dealing with, what their legislation is, what the mining regime is, what the tax regime is and quite clearly if Bougainville was independent it would present a different situation in terms of raising finance internationally than if it was part of Papua New Guinea because Papua New Guinea has a long and successful record as a mining destination and the mines here have worked very well but the international community, finance community, won't know because there is no experience with Bougainville as an independent country.
GARRETT: Under the Bougainville Peace Agreement the PNG government must satisfy itself that Bougainville can economically sustain itself before it agrees to independence. Does that give Bougainville Copper the whip hand in negotiations?
TAYLOR: I don't think it does. I mean we as a commercial enterprise won't be getting involved in politics. What we are looking at is the viability of the mine. We are looking at the consents that we need from the parties who we want to get the consents. The whole question of what economic viability is for the purposes of that agreement is really a matter for both governments.
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