Home > mining, Papua New Guinea > Rio Tinto stripped of nothing on Bougainville – and the ABG knows it!

Rio Tinto stripped of nothing on Bougainville – and the ABG knows it!

 MRA records show BCL’s mining lease over Panguna expired in 2011 and its exploration licences will expire next year. BCL’s own Annual Report and a previous statement from John Momis appear to confirm this state of affairs. So where does that leave all the media of the last few weeks…

So the plot thickens. Over the past fortnight, the media has gone into a fervour after Rio Tinto declared it will reconsider its majority stake in Bougainville Copper Limited (BCL).

This change of heart occurred, so we are told, after the Transitional Mining Act ‘stripped’ Rio’s subsidiary BCL of its mining leases and exploration licences. Some more shrill shareholders have called this expropriation, pure and simple.

Indicative of the recent headlines is the following remark which appeared in the Wall Street Journal:

‘The Anglo-Australian company [Rio Tinto] on Monday said it was reviewing its options for its controlling stake in Bougainville Copper Ltd, after the [Bougainville] government passed new laws that could strip the company of its lease on its Panguna mine’.

This seemingly bold step has been trumpeted by the Autonomous Bougainville Government as evidence that it is no stooge of Rio Tinto or the mining industry.

But it seems we may have all been fooled by what appears to be an elaborate hoax, which has been played out through the national and international media.

In their eagerness to trumpet the headlines ‘Rio Tinto stripped …’, no one has actually bothered to verify if BCL still actually holds a lease over Panguna!

Tsk tsk.

Now, according to PNG’s Mining Resources Authority BCL’s Special Mining Lease over Panguna expired in 2011.

mra map of mining lease area

Yet on 12 August this year President John Momis wrote to BCL’s Chairman to advise him that:

‘Prior to that [Transitional] Act coming into operation, BCL is the holder of an SML [Special Mining Lease] over the area of the current Panguna SML, primarily by virtue of the operation of the relevant provisions of the Mining (Bougainville Copper Agreement) Act concerning the SML.  As a result, when the Bougainville Mining Act commences, section 212(2) will vest BCL with an Exploration Licence for the area of what will then be the previous SML’.

Surely the good President is well aware that the SML had lapsed? From the above ‘letter’ it would seem not.

But the plot thickens further. Here is a very interesting report which the Post Courier published on 29 November 2011:

‘BOUGAINVILLE president John Momis last week thanked PNG Prime Minister Peter O’Neill for his decision not to approve the renewal of the Special Mining Lease (SML) held by Bougainville Copper Limited (BCL) in Panguna for the last 42 years’.

So the President would seem to KNOW the SML has expired, yet has maintained publicly it is still in place. Why would he do that? And why would BCL play along? Or has the SML been renewed since November 2011 under the table, without public consultation (though this would presumably be reflected in the Mineral Resource Authority system)?

If it has not been renewed, why did BCL inform the Australian Stock Exchange on 25 June this year that ‘BCL holds a number of resource tenements in Bougainville, including a Special Mining Lease (SML), various  Leases for Mining Purposes and several Exploration Licences’.

The significance of this statement must be read in light of corporation laws. Giving materially false or misleading information to Australian Stock Exchange potentially breaches section 1309 of the Corporations Act. Doing this knowingly is a criminal offence punishable by a fine of up to 200 penalty units and/or imprisonment for up to 5 years.

At the very least this June 2014 announcement would appear to contradict not only Mineral Resource Authority records, but admissions made in BCL’s 2013 Annual Report, which states:

‘The company’s special mining lease lapsed through effluction of time on 10 April 2011 and in accordance with the applicable legislation the company is entitled to a 21 year extension which has been applied for but not as yet granted‘.

And then there is the issue of the exploration licences. They are ALL set to expire early next year, something that has not been mentioned in the media.

mra map of exploration licences

Owing to the time frame they are basically worthless given that there is little chance of any exploration activity taking place before their expiration.

So what exactly has Rio Tinto been stripped of, or have they  been stripped of anything at all?

We dont know – its not clear.

Has the transitional legislation actually strengthened BCL’s position?

According to the legislation passed earlier this month, ‘If, on the commencement of this Act, an application for a tenement (other than an alluvial  mining lease) under the Mining Act 1992 in respect of land situated in the Autonomous Region of  Bougainville is pending, the application has effect, on and after that commencement, as if it were  an application for the corresponding tenement under this Act and must be dealt with under this  Act’.

The Mining Resources Authority records suggest the renewal of the Special Mining Lease is pending – so will it now be treated as a pending application for a mining lease under the transitional legislation?

If so, what does this mean for the landowning community? As they have no enforceable right to contest the grant of mining leases over resources they ‘evidently’ ‘own’, will this in effect mean that BCL can return to Panguna without landowner consent?

Other questions must be asked.

Was this transitional legislation rushed in place to facilitate the renewal of BCL’s expired interests? If so, why is Rio Tinto so ‘upset’? Is it all a facade?

Once again, the answer is not clear.

And why has the Autonomous Bougainville Government not alerted the media to the misreporting, given that the ABG must knows that the lease has expired and the exploration licences are nearly expired?

Now that is an important question!

What is clear is the real story is much more complex than the media narrative, and no one is prepared yet to reveal the truth behind the headlines.

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