Rio Tinto will investigate the possibility of restarting operations at its Panguna copper-gold mine on Bougainville Island, after closing it more than 25 years ago due to protests from local villagers. The company’s subsidiary Bougainville Copper has completed a study at the site which confirms at least 5 million tonnes of copper and 19 million ounces of gold are still hosted within the mine.
Rio Tinto has renewed interest in the mine as its 2012 financial report comes in around $10 billion under the annual profit of the previous 12 months. The company has flagged a greater focus on its copper and iron ore business, and the remaining copper and gold at Panguna could be worth up to $73 billion on current prices.
Between 1972 and 1989 about 3 million tonnes of copper and 9.3 million ounces of gold were mined from the Panguna lode, but no exploration or mining has since been carried out.
For years, Rio Tinto has put off returning to the island despite an end to hostilities in 2001 and intermittent discussions with the government. In 2005, it sold its stake in another mine in Papua New Guinea’s Lihir island.
Bougainville Copper’s managing director Peter Taylor says the potential for a restart could only be fully assessed once it was safe to return to the mine. “The new estimate for copper and gold supports consideration of a number of potential development options. Bougainville Copper continues to work with stakeholders on exploring ways in which the project may be advanced.”
Bougainville Copper began divesting its assets on the island in 2000 and has since developed a portfolio of debt and equity investments, posting a $2.6 million loss in the year ended December 31, 2012.