Papua New Guinea’s autonomous region of Bougainville passed Friday a new mining bill that strips significant rights from Rio Tinto’s (LON, ASX:RIO) subsidiary Bougainville Copper Limited (ASX:BOC).
The ruling formalizes the province’s control of its own resources, which means the national PNG mining law no longer applies and that the agreement under which Bougainville Copper ran the Panguna open cut copper and gold mine for 20 years has been eliminated.
According to Radio Australia, locals worry the legislation —which transfers powers over mining from the Papua New Guinea government to the local legislature — gives too much power to Australian copper, gold, and silver company Bougainville Copper, whose Panguna mine sparked a civil war in the 1990’s and 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.
Philip Miriori, Chairman of the Me’ekamui Government of Unity, a rebel group based near the mine site, told Radio Australia the legislation was “dangerous” and “potentially destabilizing.”
But Bougainville President John Momis defends it: “I firmly believe that we have done has been practicable,” he told Island Business, adding the law is a “transitional” one and that the long-term law is still being developed.
Image from archives.