Bougainville Copper Ltd. To Reopen Panguna Mine

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Facilities to be replaced, production to restart in 6 years

By Paeope Ovasuru

PORT MORESBY, Papua New Guinea (PNG Post-Courier, April 9, 2013) – Bougainville Copper Limited (BCL) announced yesterday that it is ready to re-open the Panguna mine in Bougainville at its annual general meeting (AGM).

The company has estimated that it will cost about K11 million [US$5 million currently] to start-up the mine and it will take about six years to start production.

According to chairman, Peter Taylor, BCL conducted an Order of Magnitude Study (OMS) last year and the key findings revealed that the project is economically viable, based on key assumptions of mining up to 100 million tons of copper per year and processing up to 60 million tons of ore per year.

"The capital cost is high at US$5.2 million (K11 million) and it has been assumed that most mine site facilities will need to be replaced," Mr. Taylor said in his opening statement.

He said the study considered a wider range of development and production options, including higher mining and processing rates, alternative power, infrastructure and tailings options.

"I emphasize the study has a degree of accuracy of positive or negative 30 percent and is not a substitute for the feasibility study that will be needed to support redevelopment," he said.

He said the mine has the potential to process 60 million tons of ore per annum, a similar rate that it achieved prior to the mine being suspended.

"The project is very dependent on copper and gold prices. Lower metal prices may still be economically viable but the cut off grade would have to rise and the size of the resources would reduce, as would mine life," Mr. Taylor said.

He said the study revealed that the mine life would be approximately 24 years.

Mr. Taylor also said although the study was based on particular assumptions and infrastructure, there are many choices and final decisions that have to be made.

"The study assumes a workforce of approximately 2,500 direct employees," he said.

"These options will be given more detailed attention at the appropriate time and in consultation with government regulators and landowners," he added.

He said the purpose of the study was to determine the technical and financial feasibility of redeveloping the Panguna operation.

The study does not address landowner, community, the Autonomous Bougainville Government (ABG) and the PNG government’s issues and considerations, Mr. Taylor said.

He said the relationship between ABG and BCL was cordial and engaged.

"President Momis maintains his support for the reopening of the mine," Mr. Taylor said.

A series of regional forums are being held across Bougainville to allow all stakeholders to discuss the re-opening of the Panguna mine.

Meanwhile, Dame Carol Kidu was voted to the board of directors of BCL yesterday.

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