The results from the Bougainville Referendum Commission attracted over 181,000 voters (the island nation’s population was 249,358 at the last count) and on Wednesday an overwhelming 98% voted to gain independence from Papua New Guinea.
With a population fewer than Pittsburgh, an estimated per-capita GDP of about $1,100 and an economy reliant on money from the central government, Bougainville seems an unlikely candidate for independence. But it has one resource that could potentially give it real and not just nominal autonomy — a massive copper-gold deposit.
Bougainville had a history of small-scale mining. But the identification of a major gold, copper and silver orebody at Panguna in the 1960s prompted Bougainville Copper Ltd, (BCL) a subsidiary of Rio Tinto, to start operations of a major mine from 1972 until 1989.
Work stopped after the start of the Bougainville civil war, of which the Pangua mine was a focal point. It lasted nearly 10 years.
BCL says Panguna has an estimated 5.3 million tones of copper and 19.3 million ounces of gold, which would make the reserves worth about $60 billion at today’s prices.
BCL, which has a market capitalization of $71 million on the ASX, estimates that it would take seven to eight years and $5 billion to $6 billion to resume operations. Rio Tinto gave away its stake in 2016, effectively donating the mine. That left the governments of Papua New Guinea and Bougainville with 36.4% each of BCL.
In November, Bougainville Vice President Raymond Masono said he would revive a plan to overhaul the region’s mining laws after the independence referendum, which could strip the former operator of Panguna of its interests, Reuters reported.
The proposed changes would erase an interest in the project held by the Papua New Guinea government. Under amendments, Bougainville would take a 60% share in all projects and retain all mining licences, leaving a 40% share that investors can bid for.
“Panguna is the most likely project that can bankroll Bougainville’s independence from Papua New Guinea,” Masono, who is also Bougainville’s mining minister, told Reuters at the time.
“They don’t own the licence and the mine, we own it – they come on our terms. The revolution is ongoing.”
(With files from Bloomberg and Reuters)