SYDNEY: Mining giant Rio Tinto has given up control of a mine at the centre of a decade-long civil war on Papua New Guinea's Bougainville, leaving locals angry Friday that some shares will go to the national government.
The huge Panguna mine on Bougainville island has been closed since 1989, when it was forced to shut down after continuous attacks by secessionist rebels in a conflict that cost an estimated 10,000 lives.
Panguna is one of the South Pacific's largest mines for copper and gold, and Rio has previously said both the PNG government and Bougainville's leadership were interested in restarting it.
A 2014 annual report by Bougainville Copper Limited (BCL), which controls the facility, estimated the mine has 19.3 million ounces of gold and 5.3 million tonnes of copper in reserves, valuing the deposits in the billions of dollars.
On Thursday, Rio said it would transfer its 53.8 percent controlling share to an independent trustee.
Rio said this trustee will distribute the shares "between the Autonomous Bougainville Government for the benefit of all the Panguna landowners and the people of Bougainville, and the Independent State of Papua New Guinea".
The deal gives Bougainville's autonomous administration 36.4 percent of BCL, the first time it has owned a stake, but news the national government would hold an equal share of the mine angered local politicians.
Bougainville President John Morris slammed the decision as "unilateral" and said locals "cannot accept national government control over the future of Panguna through either majority or equal shareholding in BCL".
Bougainville was granted autonomy by the PNG government in June 2005. But the national government has been sensitive about the region, which is expected to hold a referendum on independence in the next few years.
"Rio Tinto has shown arrogance and ignorance in ignoring my warning," Morris said according to PNG's Post-Courier, adding that he had met with Rio executives several times on the issue.
"Sitting in their comfortable London offices, they have interfered in Bougainville's affairs by deciding PNG should have equal control of BCL."
Rio announced a review of its stake in the PNG mine in 2014, saying a study the previous year had found that some US$5.2 billion would be needed to reopen the site.
Bougainville's separatist conflict was the bloodiest in the Pacific since World War II, and ended when the New Zealand government helped broker a truce signed by all factions in 1997.
Before it was closed, the mine produced copper concentrate for 17 years, which represented 44 percent of PNG's total export earnings at that time. Arguments over environmental damages and compensation from its operation had been central to the conflict.
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