A multi-decade battle to resume production at what was once one of the world's largest copper and gold mines could be nearing its end. The news appears to have sent the share price of ASX mining stock Bougainville Copper Limited (ASX: BOC) on a rollercoaster ride.
This afternoon, the Bougainville Copper share price exited a trading halt to hit 99 cents, 147.5% higher than its previous close. It ended the day at 89 cents, up 122.5%.
Also today, the Autonomous Bougainville Government announced it's reached a resolution to re-open the Panguna Mine for the first time since 1989.
The company believes the government's announcement could be the reason behind its share price's surge.
Let's take a look at what may have got the market excited about the $209 million would-be miner.
Image source: Getty Images
A walk through history
Nearly 33 years ago, Bougainville Copper – a then subsidiary of Rio Tinto Limited (ASX: RIO) – was forced to walk away from the Panguna Mine after a civil war was born out of the company's practices.
According to the Human Rights Law Centre, Bougainville Copper discharged waste from the mine into the island's river systems.
Doing so is said to have caused major and ongoing environmental devastation.
Meanwhile, the island's residents felt the profits of such practises were being unevenly distributed.
The resulting civil war is estimated to have cost the lives of between 15,000 and 20,000 people.
Bougainville Copper states 62% of the cash from the project was given to the Papua New Guinean government, representing around 17% of Papua New Guinea's internally generated revenue over its 17-year production life.
The company's mining licence was removed in 2014 and replaced with an exploration licence.
Rio Tinto ultimately devested from Bougainville Copper in 2016, handing its 53.8% shareholding to a trustee.
From there, it was spread between the Autonomous Bougainville Government – for the benefit of Panguna landowners and Bougainville residents – and the Independent State of Papua New Guinea.
In response to a report by the Human Rights Law Centre, Rio Tinto agreed to predominantly fund an assessment of the legacy impacts of the Panguna Mine last year.
Nowadays, Bougainville Copper's website states:
Bougainville Copper's main objective is to work cooperatively towards realising the vision of resuming active exploration and sustainable … mining at Panguna.
What's going on with the Bougainville Copper share price today?
Fast forward to today, the Bougainville Copper share price rocketed before being put in the freezer this morning.
It has since exited said freeze after the company responded to today's news: The Autonomous Bougainville Government – which become independent in 2020 – has announced it's resolved to reopen the Panguna Mine.
The joint resolution was signed by clan chiefs and representatives from the 5 major clans of the Panguna area – Basikang, Kurabang, Bakoringu, Barapang, and Mantaa.
The nation's president, the honourable Ishmael Toroama, said, "Today marks the ending and the beginning of a new chapter, a chapter to realise Bougainville's independence."
Proceeds from the mine are expected to boost the nation's economic future and guarantee its independence.
In response to the government's announcement, Bougainville Copper said:
[T]his would appear to demonstrate unity amongst the landowners and, would also boost confidence in the Autonomous Region of Bougainville as it pursues economic independence…
[The company] was not involved in the landowner summit nor was it referenced in the [government's release] article…
The Judicial Review of the ABG's decision not to renew the exploration licence over Panguna remains in process and we anticipate proceedings to commence in the first quarter of 2022.
