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Panguna copper mine closed since 1989

PORT MORESBY, Papua New Guinea (PNG Post-Courier, July 31, 2008) – Bougainville Copper Limited (BCL) has started evaluating the technical and financial requirements to re-develop the abandoned Panguna mine.

The order of magnitude study will assist BCL to work out how much will be needed to re-open the mine in the event that profitable mining is allowed to return to Panguna.

Company secretary Paul Coleman advised the Australian Stock Exchange this week that BCL had undertaken an order of magnitude study to re-develop the mine that was forced to close in 1989 following an uprising.

[PIR editor’s note: Bougainville Copper Limited (BCL) is owned 53.58 percent by Rio Tinto Limited . The Papua New Guinea Government owns 19.06 percent, while public shareholders hold the remaining 27.36 percent of the share capital. Rio Tinto is heaquartered in London.]

The study is being managed by the Rio Tinto technology and innovation group.

Mr Coleman said substantial progress had been achieved with the geology, mining, tailings, environment and safety components being largely complete.He said BCL had decided to outsource the ore processing and infrastructure components of the order of magnitude study to a global engineering company. A contract for the ore processing and infrastructure components has been awarded to Hatch Brisbane.

Mr Coleman said Hatch was selected because of its experience in Papua New Guinea and its expertise in the design and installation of large concentrators.

"The high demand for new mineral resource projects has resulted in a substantial escalation in new project capital costs. The engagement of Hatch will provide a more robust estimate of the capital required to re-develop the Panguna operation. This detailed work will result in completion of the OoM study being delayed. Completion is now expected in November 2008."

Initial estimates indicated that it would need in excess of K5 billion [US$1.96 billion] to kick-start the abandoned Panguna mine.

BCL has not been allowed to re-enter Panguna since the closure.

Papua New Guinea Post-Courier:

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