Bougainville update

Bougainville update

29th May 2007

Rio Tinto, through its subsidiary Bougainville Copper Ltd, has re-affirmed its "rights" to the huge Panguna copper-gold lease on Bougainville and the Papua New Guinea government has "welcomed" the company's call for cooperation between "stakeholders".

However, the key parties in brokering an agreement to re-open the mine are the Panguna landowners, whose views have not been canvassed - let alone backed by implementation of the principle of "free prior informed consent"

MRA wants to see reactivation plans for mining on Bougainville

The National

29th May 2007

MINERAL Resources Authority (MRA) managing director Kepas Wali has welcomed Bougainville Copper Ltd's call for co-operation among stakeholders in the planned re-activation of exploration and mining on Bougainville.

"The Mineral Resources Authority is set to promote mining as a way to generate jobs, training and prosperity for all Papua New Guineans.

"If the people of Bougainville express the wish to have mining again as an income stream, then the MRA would be pleased to see all parties come up with a re-activation plan that is mutually acceptable and economically achievable," Mr Wali said.

The call by BCL was made by chairman Peter Taylor who, at the recent meeting with stakeholders, told them that a high degree of consensus by all the key stakeholders was highly desirable.

"I believe the new and now operational Mineral Resources Authority is the right vehicle to act as the independent champion of this process," Mr Taylor said.

BCL has some K200 million in its readily convertible share portfolio, providing the flexibility to start feasibility studies and other work, aimed at achieving a return to exploration and profitable mining in PNG.

As one of the first steps in a three-year plan, BCL had agreed to engage with the National Government and Bougainville stakeholders in a "review and renegotiation" of the Bougainville Copper Agreement.

Existing legislation had been outdated by the events of 1989, and by the emergence of the Autonomous Bougainville Government and its request to draw down mining rights currently administered by the National Government. Also critical are the pragmatic issues of landowner compensation, equity participation, profit sharing and environmental management of any new or reestablished operations.

Meanwhile, BCL has re-asserted its claim to be the sole operator of the Panguna ore body.

"I wish to reassure shareholders that Special Mining Lease No 1 over the Panguna mine area and associated leases, including seven adjacent exploration licences, are held in good standing solely by BCL.

"They are the only tenements for exploration or mining current on Bougainville," Mr Taylor said.