Bougainville, a Pacific island with a population of 300,000, has decided against partnering with Chinese mining company CMOC for the reopening of the Panguna gold and copper mine, once among the largest in the world before its closure due to a devastating civil war. Instead, Bougainville has chosen to collaborate with Indian firm Lloyds Metals & Energy Limited for future mining or service contracts.
President Ishmael Toroama publicly rejected the partnership with CMOC last Thursday, marking the first indication of the Chinese company’s interest in Panguna through a local miner. The Panguna mine, previously managed by Rio Tinto, was a significant revenue source for Papua New Guinea before it ceased operations in 1989 amid a civil conflict that led to the deaths of approximately 20,000 people.
As Bougainville aims for independence from Papua New Guinea by 2027, revitalizing the Panguna mine is crucial for its economic development. Toroama emphasized the need for investment and support, previously indicating that he would seek backing from Beijing if Western nations failed to assist the autonomous region. However, with the recent engagement of an Indian company, analysts note a strategic pivot that may influence regional dynamics.
Oliver Nobetau, a Pacific fellow at the Lowy Institute, expressed concerns about the implications of Chinese investment for regional stability, especially given Bougainville’s proximity to the Solomon Islands, which established a security pact with China in 2022.
The Bougainville government, following a transfer of shares from Papua New Guinea in January, became the largest shareholder in Bougainville Copper, holding a 72.9 percent stake. Nobetau highlighted the economic necessity for Bougainville to generate revenues beyond the current internal budget contributions of only 5.3 percent. Papua New Guinea’s Prime Minister James Marape has asserted that Bougainville must fund at least half of its budget to succeed in its political independence aspirations.
In a 2019 referendum, Bougainville’s population voted overwhelmingly for independence, but this decision still requires confirmation from the Papua New Guinea parliament. As Bougainville moves forward with plans to reopen the Panguna mine in partnership with an Indian company, hopes rise for economic rejuvenation and greater autonomy in the near future.
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