Even the long-suffering Bougainville Copper board, which has witnessed cargo cults, wars, and the closure of its own vast mine, was puzzled when its share price soared 50 per cent a week ago.
For this sudden surge of confidence appeared, oddly, to have been triggered by troubling news for the company — the commencement of a new Mining Act passed by the Bougainville autonomous region’s parliament, which hands back control of all resources to landowners.
The future of the Bougainville mine, which still contains copper and gold worth about $50 billion, is tied up with its complex past, with the long geopolitical shadow cast by the 1989-2001 civil war on the island — and with cargo-cultist hopes held out by local leaders allied to eccentric foreigners constantly seeking to seize control of the resources from BCL.
The ASX issued a “speeding ticket”, asking the company to explain the April 2 share price leap. BCL replied that it couldn’t. The price had slid back down to 28c by Friday.
The directors of the company, which is 53.58 per cent owned by Rio Tinto, 19.06 per cent by the Papua New Guinea government, and 27.36 per cent by other shareholders, are trying to juggle an enormous range of unknowns and variables, without even the compensating benefits of having a mine to run.
It has remained closed since May 1989, and would cost upwards of $6.5bn to reopen.
The big questions hanging over the mine right now include: who will run the Autonomous Bougainville Government after the election due at the end of May? Nine figures are contending the presidency, including several former combatants, with the front runners probably former Catholic priest John Momis, the veteran incumbent, and Sam Akoitai, a former national mining minister.
The next government will have the responsibility of setting the parameters for the referendum on independence that must happen at some time during the five years from this July.
What will be the response of the national government led by Prime Minister Peter O’Neill to the new Bougainville mining law? National legislation insists that, as in Australia, such resources are owned by the state.
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