Abstract: Mine Development in Pacific Islands--Importance of Cooperation

C. P. Bishop

The mining operations of Bougainville Copper Ltd. are located on the Island of Bougainville in Papua New Guinea. Bougainville has a hot, wet, tropical climate and lies in one of the most seismically active areas of the globe.

CRA Exploration Pty. Ltd. first established mineralization in the Panguna area in 1964. The economic feasibility study was completed by mid-1969 and the new plant commenced commercial production of copper concentrates in April 1972.

One of the largest copper-mining operations in the world, Bougainville Copper Ltd. has been a major factor in the economic development of Papua New Guinea, accounting for approximately half of its foreign-exchange earnings. The company, however, has been most diligent in its effort to lessen the social impact of its operation on the local community.

In addition to the mine developments, two new townships, a power station, and a port have been built. A new road network constructed by the company transformed the island's primitive transportation system. Though the copper resource at Panguna is of national importance to Papua New Guinea, the company has set about simultaneously developing an even greater resource through its training programs for Papua New Guineans.

The mining agreement was ratified by the government in 1967, prior to independence. The negotiating parties took a long-range view when terms of the Mining Agreement were set, by establishing what at that time was a unique partnership between the government and a private company.

It has been incumbent on the company to conduct an operation in line with national goals and standards of performance and its success is a positive encouragement to other prospective investors.

Papua New Guinea was granted internal self-government from Australia in 1973 and attained full independence in 1975. High profits, during the period when world copper prices rose to an all-time peak, were a major factor which influenced the new government to question the original mining agreement. That year, 1974, the government and the company renegotiated a new mining agreement.

There are lessons which may be learned from the exploration, development, and operation of the Bougainville Copper Ltd. mine at Panguna. The cooperation of the government, and the company and its employees has been important. Together they are developing an operation of significance in harmony with the community.

AAPG Search and Discovery Article #90962©1978 AAPG 2nd Circum-Pacific Energy and Minerals Resource Conference, Honolulu, Hawaii