PNG autonomous region lifts mining ban, but excludes controversial Panguna

An autonomous region of Papua New Guinea has lifted a ban on mining that has been in place since 1971 – but it will not allow the restart of the controversial Panguna copper mine which has been the source of deadly internal strife.

The mining ban on the island of Bougainville did not include the Panguna mine, which opened in 1972 and was majority-owned by Rio Tinto (LON:RIO). The mine was operated by a Rio subsidiary, Bougainville Copper.

Conflict over the mine sparked a civil war in the 1990's and it has not seen mining activity since then.

The internal conflict, which came about in part due to a demand from Bougainville rebels for higher mine royalties, and their anger at alleged environmental destruction, resulted in an estimated 10,000 to 15,000 deaths.

Last year Rio Tinto said it would relinquish control over the mine, including responsibility for clean-up.

"We believe that [the company] was fully compliant will all regulatory requirements and applicable standards at the time," Rio Tinto executive Joanne Farrell wrote to [Bougainville president Dr. John] Momis on August 6," the Sydney Morning Herald wrote in an article about the mine last summer.

Cleaning up the site could cost upwards of $1 billion, SMH quoted Momis saying.

In a statement on Sunday, Momis said that lifting the mining ban "allows for applications to mine in the iron ore rich areas of Tore, Isina and Jaba, but does not include Panguna, one of the largest copper mines in the world," Reuters reported.

According to Rio Tinto technical survey data the mine still has an estimated 3 million tonnes of copper reserves remaining.