Rio’s decision angers Momis

Business
Source:
The National,Friday July 1st, 2016

Bougainville President John Momis is disappointed with Rio Tinto’s decision to transfer its 53.8 per cent share in Bougainville Copper Ltd (BCL).
International mining giant Rio yesterday transferred its BCL shares to an independent trustee, for distribution to the ABG (36.4 per cent), and the PNG Government (17.4 per cent). PNG is already the second largest BCL shareholder.
It means the share distribution would see the two governments – ABG and PNG – have equal BCL shareholders at 36.4 per cent each.
The remaining 27 per cent of shares are held by small shareholders. Rio Tinto has been reviewing its BCL shareholding for almost two years. The review resulted in Rio deciding to end its investment in BCL, which ran the giant copper and gold mine at Panguna from 1972 to 1989, under the 1967 Bougainville Copper Agreement (BCA).
Momis said Rio Tinto had made a unilateral decision.
“It failed to consult the Bougainville Government about distributing its shares,” he said.
“At meetings with senior Rio officials in July 2015 and February 2016, I warned strongly against the transfer of Rio’s shares to PNG.
“Bougainvilleans cannot accept the (PNG) Government control over the future of Panguna through either majority or equal shareholding in BCL,” he said. “We are open to PNG remaining a BCL shareholder.
That may assist us find responsible partners and financiers for possible future operations at Panguna. But we cannot accept Rio Tinto’s interference in seeking to give PNG equal control over Panguna.
“There is no possibility of progress on resolving the future of Panguna on that basis.
“Rio Tinto has shown arrogance in ignoring my warning. Sitting in their comfortable London offices, they have interfered in Bougainville’s affairs by deciding PNG should have equal control of BCL.
“Bougainvilleans are united in rejecting what Rio Tinto seeks to thrust upon us.”
He was also angry at Rio Tinto’s refusal to accept responsibility for the environmental and other damage done by the Panguna mine.
“In past meetings, I insisted that Rio accept responsibility for mining legacy issues,” he said.
“When I met their officials in Port Moresby, they flatly rejected any responsibility for their contribution to the damage done by the Panguna Mine. Rio’s officials gave me two reasons – Rio operated under the PNG law of the day and second, they were forced out of Panguna by the conflict.
“But the truth is Rio Tinto generated huge revenues from what we all now know was the terrible injustice of its Bougainville mining operations. The mine shut down in 1989 because anger over that injustice generated demands for a renegotiated agreement.  “It’s now clear the BCA was deeply unjust. It ignored environmental damage and social impacts. Only a tiny share of mine revenue was distributed to landowners and to the North Solomons provincial government.”
He said he was writing to the managing director of Rio Tinto asking him to reconsider not only the Rio decision about its shares, but also its refusal to deal with its Panguna legacy responsibilities. “I am writing to the International Council of Metals and Mining asking them to end Rio Tinto’s membership because of its failure to honour the ICMM’s 10 Principles for Sustainable Development Performance.” He is seeking a meeting with Prime Minister Peter O’Neill to discuss how best to defuse the dangerous situation created by Rio’s decision.