Press Review 2008
Here you will find only press articles related to the
information given by
The European Shareholders
of Bougainville Copper
05.08.2008 PNG Industry News (Perth/Australia)
Pentanu joins war of words on Bougainville mining
Tuesday, 5 August 2008
SIMON Pentanu, a former PNG Ombudsman chief and Bougainville Administrator, has attacked shareholder lobby group, European Shareholders of Bougainville Copper, for its recent campaign against Bougainville Copper (BCL) chairman Peter Taylor.
As part of the campaign to remove Taylor from the helm, the ESBC has submitted a letter to the Australian Securities Exchange over the alleged corporate governance failures of the Rio Tinto subsidiary and ASX-listed company, and has also sent a letter to Rio Tinto chief executive Tom Albanese.
In an opinion piece in the Post-Courier newspaper, Pentanu said it was easy for the ESBC to make scathing criticisms from “lavish and opulent” surroundings in Europe .
“The latest criticism against BCL and its management is uncalled for given the situation on the ground in Bougainville ,” he said.
“All it achieves is to create more confusion, a position that is symptomatic of the level of understanding ESBC has on the situation in Bougainville .
“These kinds of self-seeking missives or statements do not help the perception and views of many Bougainvilleans, including many landowners who will not accept any return to mining until many other outstanding and unresolved issues are brought to proper closure.”
Pentanu also singled out the ESBC’s recent support of the Panguna Landowner’s Association, which seeks the return of BCL to the Panguna mine on Bougainville Island .
He said it was naïve for the ESBC and its president Axel G. Sturm to think BCL can resume mining on the back of Panguna Landowner Association statements coming out of BCL’s annual general meeting earlier this year.
Taylor recently told PNGIndustryNews.net that not all 600 landowners or landowner representatives of the 1980 compensation agreement supported a return to mining at Panguna.
Pentanu also questioned the ESBC’s efforts to claim Taylor ’s scalp.
“What is the real purpose of ESBC in seeking Peter Taylor’s resignation? Has ESBC considered the possibility that any resignation [or talk of resignation] at this time may in fact be a retrogressive step for BCL considering the gains made in terms of a growing acceptability and preparedness in the last three to four years by a wide cross section of the Bougainvillean population to engage in discussions on mining?”
In response to Pentanu’s comments, ESBC president Axel G. Sturm said Pentanu should keep himself informed about the honest intentions of his organisation and it was not wrong to claim for better management of BCL.
“I strongly believe the end result you want is the same as the end result that the ESBC want,” he said. “Only our individual style might vary.”
“Instead of blaming each other, we should work hand in hand for a better future of Bougainville .”
Operations at the giant Panguna copper, gold and silver mine have been suspended since 1989 and since that time Bougainville has been subject to considerable political and military strife.
04.08.2008 Post-Courier (PNG)
29.07.2008 Dow Jones Newswires
16.05.2008 POST-COURIER (PNG)
Shareholders of BCL back mine restart
THE European Shareholders of Bougainville Copper Ltd (ESCB) strongly support the landowners’ claim for re-opening the giant Panguna mine on Bougainville as recently expressed.
ESBC president Axel G. Sturm said on Wednesday in Singapore that there must be a new approach in all activities concerning the resuming of mining in Bougainville.
“We are very much satisfied that the landowners made this first and important step towards BCL,” Mr Sturm said.
“That shows us that a lot of people in Bougainville want BCL to come back home to work on the island.
“Now it is up to the Autonomous Bougainville Government and the PNG Government to make sure that there will be permanent peace and security applied.”
Mr Sturm underlined that without peace and security no investor would give any money to rebuild the island’s damaged infrastructure.
Especially the environmental damage due to the sudden departure of mine workers in 1989 caused by the aggression of rebels had to be repaired as quick as possible, he said.
“Only a very big mining company like Bougainville Copper Limited can shoulder a task like this,” he said.
“Also the damage by uncontrolled mining and the use of mercury to separate the gold caused a deep impact to the environment that is supposed to be even higher. Today’s modern mining can provide environmental caring methods of high standard.
“We absolutely do not want that there will be another young generation in Bougainville that must grow up without education and without a vision of a brilliant future. Only mining can earn the financial funding for progress in Bougainville. The landowners understood and accepted their responsibility for future.”
12.05.2008 Sydney Morning Herald
Bougainville too slow reopening Panguna
Bougainville Copper Limited (BCL) must speed up their process to reopen the abandoned Panguna mine, President of European Shareholders of BCL says.
Axel Sturm, in Papua New Guinea's capital, Port Moresby, for last Friday's BCL annual general meeting said the company should reopen the world's largest open cut gold and copper mine as soon as possible.
BCL Panguna mine was shut down during years of civil war on PNG's island of Bougainville in the 1990s.
More than 20,000 people died during years of secessionist fighting.
BCL chairman Phil Taylor told the AGM that mining would not resume for at least another five years.
Sturm said the board was moving too slowly, hurting shareholders and Bougainville.
"We see an island in agony, no real (quality) of life, without work ... There needs to be a healthy society and mining will bring that," he said.
"Of course increasing the share price is our objective but Bougainville is suffering every day the mine is not open," he said.
"They say it is a 'sensitive' issue but I think saying it is a sensitive issue is an excuse to do nothing."
Sturm also said the BCL AGM highlighted the casual approach they were taking on the issues.
"The AGM was a very, very simple handling of an important matter," he said.
"There was an enormous lack of democracy at the AGM.
"Lawyers could attack the AGM for not following the rules.
"The voting wasn't controlled nor was there enough time for questions.
"The board even said they had made engagements after the meeting, but sorry, as shareholders if we want to ask questions for four hours we can," he said.
Sturm represents a four per cent a stake in BCL. Rio Tinto is majority shareholder with 53 per cent and PNG's government holds 19 per cent.
12.05.2005 POST-COURIER (PNG)
http://www.postcourier.com.pg/20080512/mohome.htm
Bougainville mine push
BOUGAINVILLE Copper Ltd’s attempts to reopen the abandoned Panguna mine is not far off as landowners deliberate on what they want the company to do — profitable mining and active exploration.
Panguna landowners’ association chairman Michael Pariu issued a statement on Friday stating that he had met with BCL officials and agreed that among others BCL should “come back to profitable mining and active exploration”.
In a statement co-signed by Chris Damana (vice chairman), Severinus Ampaoi (director of Road Mining Tailings Leases Trustee Ltd) and Lawrence Daveona (director and company secretary of Road Mining Tailings Leases Trustee Ltd), Mr Pariu said the landowners had prepared a draft supplemental Bougainville Copper Agreement (2008), which was unanimously endorsed by the landowners. “We demand the ABG (Autonomous Bougainville Government) unanimously endorses our draft agreement in their next sitting,” Mr Pariu said. “We further demand ABG gives this a top priority for agreement with the National Government in the next joint supervisory body meeting scheduled June, in Manus.”
He said through the local MP for Central Bougainville Jimmy Miringtoro, the landowners wanted the reconciliation to focus on the draft supplemental agreement which would deliver up to K5 million worth of benefits per day to Bougainvilleans.
Mr Pariu said the Mr Miringtoro would lead in the reconcilliation process in consultation with the ABG and the administration and for the reconciliation to move forward immediately, funding assistance would be needed from the ABG, the National Government and Bougainville Copper Limited.
Meanwhile, the European Shareholders of Bougainville Copper (ESBC) president Axel Sturm met with Deputy Prime Minister and Minister for Mining Dr Puka Temu and adviced him of the importance of reopening the once largest mine in the world.
07.05.2008 POST-COURIER (PNG)
http://www.postcourier.com.pg/20080508/thhome.htm
European shareholders want to see Bougainville prosper economically
THE European Shareholders of Bougainville Copper stay committed to see Bougainvilleans benefit from their resources.
President Axel Sturm who flew in from Europe to attend the annual general meeting of the company spoke to the Post-Courier.
The following is the final part of the two part interview.
Post Courier: What would you like to see BCL do for the landowners?
Axel G. Sturm: First of all: Everybody has to do something for the other: BCL and the people on Bougainville as well. BCL has to make sure that royalties will be paid to the landowners and that these royalties don’t vanish in the pockets of the wrong people. We are no social experts but we can imagine that BCL would provide some well-experienced persons that can help the people in good investing of their royalties. It must not happen once more that a conman like Noah Musingku steals the money of the Bougainvilleans. Children have to be well educated in a way that they can take responsibility in 10 or 20 years. There are a lot of tasks that should be discussed in an open dialogue. There is among others the question of how alcohol and drug abuse can be reduced to a minimum. Only a healthy population without drugs and alcohol can build up a healthy community. As BCL has a very well experienced major shareholder in Rio Tinto, I have no doubt that all these tasks would be shouldered.
The mine was closed nearly 20 years ago mainly due to the secessionist conflict in which BCL was made responsible. Therefore, we believe that it would be a friendly sign of the Bougainvillean landowners to invite BCL to come back to work on the island. Second: such a big task as the re-opening of one of the world’s biggest copper- and gold mines needs a big company but it also needs local support.
The landowners can provide that. We want to say one day: We, the owners of BCL AND the landowners are proud to manage one of the best and most modern copper mines in the world.
Post-Courier: What would you like to see the Government of PNG do for the landowners?
Axel G. Sturm: The Government of PNG has announced that it will transfer the PNG-owned shares to the ABG which is the legal elected Government of all Bougainvilleans. That seems to us as a good idea; we would go one step further and say that dividends from these shares should be distributed among all Bougainvilleans; this would act as some sort of social security for all Bougainvilleans, payable every month to every adult Bougainvillean.
As we are informed, should the Autonomous Government of Bougainville take care of his citizens – landowners included. Of course, the National Government of PNG should be generous and provide as far as there is a wish of the Bougainvilleans every support in administration and logistics. First, ABG has to address all of the landowners’ claims, as so far we understand the situation correctly. If the landowners do not feel happy with their elected Government they are free to vote another next time. That is democracy.
Post-Courier: What will you bring up during the upcoming BCL AGM?
Axel G. Sturm: The European Shareholders published recently 22 questions that we want to be answered in the Annual General Meeting. Let me point out what seems to us to be a major problem: The information of people is absolutely not sufficient. Sometimes we here in Europe seem to be better informed than people in Bougainville. We would like to see that BCL helps to build up a better communication infrastructure in Bougainville. Every Bougainvillean must be very well informed on what is going on. We heard that there are still persons running around on Bougainville and telling lies about BCL and even about The European Shareholders. That is not funny and that must have an end. The first radio station on Bougainville that got support by Germany is a first step. There are others to follow. BCL must convince all Bougainvilleans that mining is the best way to overcome the actual situation of poverty and lack of security. Maybe by a specialised and focused information campaign.
Post-Courier: What is the ESBC’s opinion on the chairman’s statement made on the Rio Tinto AGM concerning Bougainville?
Axel G. Sturm: Obviously the ESBC members were not amused at all. We would appreciate if Mr. Skinner would keep himself better informed. His statement on Bougainville was not helpful. At his age he should better think about retiring and play golf instead of bringing inadequate and false messages into the world of finance. After one year of progress in Bougainville and PNG he cannot stand up and recite the same story as last year. This is simply ridiculous.
Post-Courier: Would you like to see landowners owning a significant interest in Panguna?
Axel G. Sturm: The significant interest of all landowners should be the future of the island. The landowners will always own the Panguna land; BCL will add value to that land. The landowners do not have the money or the technology to take out the gold and copper. They should be paid royalties computed on sales of gold and copper from the ground. The landowners will invest the royalties earned in building a strong future for their children; spend it on good schools, hospitals, businesses for themselves. It lies in the hands of the landowners if there is development or not. Tourism is an interesting target for the future of Bougainville.
But tourism needs infrastructure, peace and security. As long as Bougainville is known as a place of unrest and killings there will not be any tourism. Bougainville Copper, only by the company’s name, could bring the message of a peaceful island into the world. One day when mining has earned enough money to build up a good infrastructure, tourism will arrive and bring work and money to the island. Bougainville could become a second Bali for Asian and Australian tourists one day and I am sure that it might also become a hot-spot for Europeans who are already visiting French Polynesia.
07.05.2008 POST-COURIER (PNG)
http://www.postcourier.com.pg/20080507/wehome.htm
BCL shareholders keen to see Panguna open
BOUGAINVILLE Copper Limited’s annual general meeting tomorrow is expected to be filled with debates as shareholders start arriving from different places including Europe.
The Post-Courier conducted an interview with the president of the European Shareholders of Bougainville Copper (ESBC) Axel Sturm who arrived in the country to attend this year’s AGM. The following is the first part of the two-part interview.
Post-Courier: What does ESBC want done with Panguna?
Axel G Sturm: After years of unrest that cost many lives the island of Bougainville needs a long period of peace and prosperity for all.
The income from the giant Panguna mine can be an excellent funding for a good future for all Bougainvilleans. Therefore, the European Shareholders claim for a re-opening of the Panguna mine by BCL as soon as possible. With the money earned by the Panguna mine many projects could be developed in Bougainville as there are infrastructure, social investments as hospitals, schools etc. So, with the support of BCL a new and prosperous Bougainville will be born.
Post-Courier: Would you want to see landowners become active participants in discussions over Panguna?
Axel G. Sturm : The landowners of the Panguna mine are the traditional owners of the land. Of course the landowners have to participate actively in all discussions on Panguna.
If we are well informed the women in Bougainville are the legal landowners. For that reason we call to all women to unite for a future in prosperity. The re-opening of the mine by BCL is an issue of public interest for all Bougainvilleans. Therefore we would appreciate if a commission of all parties involved would be built up. That commission could survey especially environmental issues of mining and the development of infrastructure as well.
My vision is that many Bougainvilleans – landowners and others – become shareholders of BCL and by that also co-owners of the company. We, the ESBC, never understood why the landowners accepted that Panguna remained a No-Go-Zone for such a long time, kept by a few former partisans in the jungle.
We think that the landowners should tell these people to go home to their families and finally free Panguna. Our impression is also that there are still some selfish people acting in Bougainville who try to steal from the others instead of working together with the majority for a better future for all. That is very sad. The landowners also can play an important role to make sure that Panguna, Arawa and the other places become places of security and peace. We would like to see especially one of the landowners, President Kabui, become an active participant by talking with all these small groups that are still a danger for peace in the region.
These groups have imperatively to lay down their weapons and work together with the rest of the community. We would also appreciate if Joseph Kabui and other ABG representatives would talk very soon with our board of directors to bring progress into the things that are to do.
to be continued tomorrow
29.04.2008 SCOOP (New Zealand)
http://www.scoop.co.nz/stories/WO0804/S00289.htm
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European Shareholders To Arrive In Port Moresby For Bougainville Copper General Annual Meeting.
A delegation of the European Shareholders of Bougainville Copper Ltd. (ESBC) is expected to arrive in Port Moresby earlier next week.
In a statement published on Monday in Bangkok (Thailand) ESBC-President Axel G. Sturm pointed out that the ESBC want to help to overcome old anxieties and doubts between the parties concerned: "It must be clear that future mining on Bougainville must avoid environmental damage and that the people of Bougainville take a maximum of profit by professional mining," said Mr. Sturm, "I am very glad that Mr. Swen Lorenz who recently wrote an outstanding study on Panguna will be with us. Mr. Lorenz will bring an excellent in-put of ideas to the assembly. We, the ESBC, expect a strong vote of all Bougainvilleans that they want BCL come back to the island and to build up a prosperous future for them. Every day where the mine is not open is a lost day for Bougainville."
ESBC-President Axel G. Sturm is supposed to stay six days in PNG for in-depth-discussions before leaving to Singapore for further talks.
01.04.2008 Dow Jones Newswires
DJ Papua New Guinea
Bougainville In Pact On Panguna Mine Restart
Bougainville , where a secessionist war claimed thousands of lives in the 1980s and 1990s and forced closure of the Panguna mine - majority-owned by Rio Tinto Ltd. (RIO.AU) - is seeking control of its mineral and gas resources.
Both governments have signed a 15-step memorandum of understanding to hand over mining powers, lifting a moratorium on mining aimed at helping the impoverished island, according to an official at the office of Papua New Guinea Deputy Prime Minister and Mining Minister Puka Temu.
Temu is reportedly hoping the initiative will be the first step in reopening the Panguna mine.
The operation shut down in 1989 after being attacked by secessionist rebels. There has been no exploration or mining because site access is still off-limits despite the formation of an autonomous island government.
The mine produced about 180,000 metric tons of copper annually and ranked as the world ' s third largest copper mine when it was in operation.
The Papua New Guinea government will seek to retain a stake in future profits from the mine and other resource projects, said the official, declining to be named.
The next meeting between the two governments, scheduled for June, is expected to address transfer of power on certain issues.
Rio Tinto owns 53.85% of Bougainville Copper Ltd. (BOC.AU), valued at A$401 million, and the Papua New Guinea government another 19.9%. The European shareholders of Bougainville Copper, a group of individual private investors, is also pushing for a restart of the mine.
The capital cost to restart the mine is pegged between US$1.2 billion and US$1.5 billion.
Mining accounts for around 50% of Papua New Guinea ' s exports, and petroleum and gas together for 25%. Other companies active in the country include Lihir Gold Ltd. (LGG.T) and Barrick Gold Corp. (ABX).
-By Elisabeth Behrmann
(END) Dow Jones Newswires
28.07.2008 Post-Courier (PNG)
10.07.2008 PNG Industry News (Perth/Australia)
Panguna landowners push new Bougainville Copper Agreement
Blair Price
Thursday, 10 July 2008
PANGUNA landowners have reportedly put a new Bougainville Copper Agreement proposal before the PNG Government to reopen the island’s Panguna mine, which was the world’s fourth-largest copper mine before it was closed in 1989.
The Post-Courier newspaper has reported the new BCA proposal is scheduled to be signed as a supplemental agreement with the old BCA appended to it.
The preferred timing of this event is to coincide with the released results of Rio Tinto’s order of magnitude study for the mine, due out next month.
Panguna Landowners Association representative Lawrence Daveona outlined a number of steps that had to be taken, aside from a new BCA, including restoring access to the mine, removing roadblocks, the buyback of guns from local militias, reopening the Aropa airport and the Arawa seaport, and a share equity offer.
However, a BCL representative told PNGIndustryNews.net the company is mindful of its corporate governance obligations and when there is a new BCA it will be reported to the ASX, but to suggest it was close would be misleading.
The European Shareholders of Bougainville Copper organisation, which holds around 4% of BCL, has given Daveona its support.
“Earlier than others Lawrence understood that the only way of bringing enduring peace and prosperity to the island of Bougainville means, first of all, getting all parties concerned together,” ESBC president Axel G. Sturm said.
“I always told my interlocutors in Port Moresby that, if there is a strong will to find a solution on all sides, the new Bougainville Copper Agreement could be ratified within a very short term.
“Even a date in August, when the pre-feasibility order of the magnitude study shall be finished by BCL, may be realistic.”
Rio Tinto Technology and Innovation Group’s order of magnitude study looks at the annual production of the Panguna mine in a range of 20-50 million tonnes per year along with projected copper and gold prices.
At BCL’s annual general meeting earlier this year chairman Peter Taylor said the ore body at Panguna is only partially mined with large available reserves, and in the mine’s last year of operation estimated mill feed was at 691Mt at 0.40% copper and 0.47 grams per tonne gold.
BCL’s operations at Panguna have been suspended since 1989 due to military and civil strife related to the island’s struggle for independence from PNG.
08.07.2008 PNG Industry News (Perth/Australia)
Illegal mining at Panguna dangerous: ESBC
Blair Price
Tuesday, 8 July 2008
THE EUROPEAN Shareholders of Bougainville Copper claims it has uncovered video evidence of small-scale illegal mining at Australia-listed Bougainville Copper’s (BCL) Panguna copper, gold and silver mine.
ESBC president Axel G. Sturm told PNGIndustryNews.net his organisation had sent a camera operator to Central Bougainville to take pictures of the mine and other places in autumn this year.
“Frankly spoken, the pictures are worrying,” he said.
“There are still people in the mine area who try to find gold. We know that there is mercury and other toxic substances used to get that gold. Such amateur gold digging empoisons the environment even far more than modern mining does.
“I am not talking about the small nugget that someone might take home as a souvenir, I am talking about a shadow economy that seems to be established there.”
BCL’s operations at Panguna have been suspended since 1989 due to military and civil strife related to the island’s struggle for independence from PNG.
Rio Tinto Technology and Innovation Group are undertaking an order of magnitude study to look at the annual production of the Panguna mine in a range of 20-50 million tonnes per year along with projected copper and gold prices.
The study is expected to be complete in August.
PNGIndustryNews.net is awaiting a response from BCL about the issues raised in this story.
04.07.2008 PNG Industry News (Perth/Australia)
European shareholders justify 1724-2586% BCL share rise
Blair Price
Friday, 4 July 2008
DESPITE concerns over share price manipulation, the European Shareholders of Bougainville Copper organisation still projects $A20-30 (K50.48-75.71) per share for Bougainville Copper (BCL) once its Panguna mine returns to operations.
That price forecast puts the share price of the Australian Securities Exchange-listed Rio Tinto subsidiary some 1724-2586% higher than its last traded price of $A1.16.
ESBC president Axel Sturm told PNGIndustryNews.net the price range the organisation sees for BCL shares was not the product of dreaming.
“Explorers often publish very positive figures when estimating their future production,” he said. “BCL is not an explorer but a miner.”
Sturm said BCL’s Panguna copper, gold and silver mine was producing for many years so the ESBC obtained the last production figures, from 1989, and then made calculations using today’s prices for precious metals and copper.
“We did not even contemplate or speculate on better production because of higher ore degrees or more efficient modern mining.”
Sturm said in 1998 the PNG Government, under the leadership of Julius Chan, had prepared a study on the fair value of BCL, putting its share price at $A7.50.
“This study based on a copper price of $US2000 per tonne. Today’s price is four times higher.”
Meanwhile, Sturm said he expects BCL’s share price to be volatile within the next few months.
“Depending on the upcoming news, we expect the share price soaring to $A2.50 in a first step.”
Sturm said this first step could occur in August, when Rio Tinto is expected to publish its order of magnitude study that investigates the annual production of the mine in a range of 20-50 million tonnes per year along with projected copper and gold prices.
“A certain risk is in a certain manipulation of the market.
“There is a group bashing down the share price regularly. These guys either expect to get cheaper stocks later or there is a political will behind it. I only can confirm to you that the ESBC is not in that game. We tried hard to find out, who it is but until now could not detect who is behind it.
“As the BCL stock market is a very narrow one – not even 30 percent of the shares are in public exchange – the share price can climb very quickly but also fall deep a week later. This is not predictable. One thing is for sure: when the mine will be open one day, the share price will rise to a level that some, today, would call a modern fairy tale.”
At its annual general meeting BCL responded to ESBC’s forecasted share price range by saying the board had not made any predictions on its share price once mining resumes at Panguna.
BCL chairman Peter Taylor also said the ore body at Panguna is only partially mined with large available reserves and in the mine’s last year of operation estimated mill feed was at 691Mt at 0.40% copper and 0.47 grams per tonne gold.
With mining operations suspended since 1989, BCL has relied on its investment portfolio, which had 13.7% growth for 2007.
The ESBC is an internet-based group of European private minority shareholders who expect high returns on their BCL investment in the medium and long term.
04.07.2008 The National (PNG)
BCL shareholders welcome probe
EUROPEAN shareholders of Bougainville Copper Ltd have welcomed a parliamentary investigation into a controversial deal signed between Canadian company, Invincible Resources, and the Autonomous Bougainville Government.
Media reports said Invincible will own 70% of the resources developed in the region through the Bogenvil Resources Development Corporation, an investment vehicle set up by the ABG.
The deal, effected during late president Joseph Kabui’s term, did not go down well with many people. It resulted in Mr Kabui facing a vote of no-confidence, which did not eventuate following the death of the ABG president.
The European Shareholders of Bougainville Copper (ESBC) said on Wednesday in Andorra , Europe , that they were satisfied that PNG’s parliamentary referral committee on minerals and energy had been charged to bring some light into the so-called Invincible deal and into the Bogenvil Resource Development Corporation agreement.
“From the beginning we asked ourselves why Kabui and some of his near friends in the ABG entered into negotiations with a man like Lindsay Semple, who is well known as an impostor,” ESBC president Axel G. Sturm said in a statement yesterday.
Sturm claimed Semple and 25 Bougainvilleans, some of them members of the ABG, are touring Europe on a road show, supposedly presenting new business projects to investors.
“We started an investigation on this famous road show and we did not get any result,” Sturm said.
“So we think that they are simply on holidays,” he said.
“Such a big group of people who are looking for some new business abroad cannot disappear.
“If they were really on a road show, they will have an A-Z documentary on their work in their luggage.
“And if they don’t, they have to explain.”
03.07.2008 PNG Industry News (Perth/Australia)
Invincible under the spotlight for ABG deals
Blair Price
Thursday, 3 July 2008
PNG’s Parliamentary Referral Committee in Minerals and Energy is investigating deals between the Autonomous Bougainville Government and mysterious Canadian explorer Invincible Resources – a move welcomed by the European Shareholders of Bougainville Copper (ESBC).
The controversy started back in May when late ABG president Joseph Kabui, who died from a heart attack less than a month ago, announced the creation of the Bougainville Resources Development Corporation (BRDC).
The BRDC was given the sole right to deal with resources landowner companies on the island over mining exploration and development for a three-year period, with an option to extend to five years, with the exception of Bougainville Copper’s Panguna area of interest.
In a later media conference the ABG admitted Invincible had gained a 70% stake in the BRDC for K20 million ($A8.01 million). Later media reports prompted Kabui to also admit he had received K20,000 from the little-known company for the 2005 election campaign.
Reported by the Post-Courier newspaper, while the parliamentary committee investigates, the Joint Provincial Planning and Budget Priority Committee will be granted full powers to introduce legislation relating to the Invincible and BRDC deals.
PNG Government officials are also interested in why legal documents advising the ABG against deals with Invincible were not considered.
One of these documents is a letter from Australian lawyer Peter Reid – who has more than 30 years experience in various resource industries – advising the ABG leadership against working with Invincible from back in 2005.
Reportedly, a big delegation of ABG ministers and leaders, led by Invincible head Lindsay Semple, is conducting a BRDC roadshow in Europe to secure more funds for Bougainville operations.
However, the ESBC – which said it is satisfied the PNG parliamentary committee will shed light on both Invincible and the BRDC – has not found any evidence of the investor roadshow taking place.
ESBC president Axel Sturm, who is based in the tiny European nation of Andorra on the border between France and Spain , said his organisation was critical of why the ABG first entered into negotiations with Semple, who it regards as a well-known imposter.
“We started in investigation on this famous road show and we did not have any result,” Sturm said.
“So we think that they are simply on holiday. Such a big group of people who are looking for some new business abroad cannot disappear.
“We are keen to see with which result the group will come back to PNG. If they were really on a road show they will have an A to Z documentary on their work in their luggage.
“And if they don’t, they are certainly able to explain what they did while travelling around the world.”
27.05.2008 PNG Industry News (PNG)
European shareholders predict 1538-2308% rise in BCL shares
Blair Price
Tuesday, 27 May 2008
THE EUROPEAN Shareholders of Bougainville Copper has made internal projections of a $A20 (K51.17) to $A30 share price for the company once it has resumed operations at the Panguna copper, gold and silver mine.
Bougainville Copper (BCL), an Australian Securities Exchange-listed company and Rio Tinto subsidiary, shut down operations at Panguna in 1989 due to political and military unrest.
With BCL shares last trading at $A1.30, the ESBC’s projections have the company’s shares rising between 1538% and 2308% in value.
The ESBC’s projections were made public in a series of written questions put forward to BCL and answered in the company’s recent annual general meeting.
BCL responded to the question about where the company sees its share price, should Panguna resume mining, by saying the board has not made any predictions on the share price.
The ESBC is an internet-based group of European private minority shareholders who expect high returns on their BCL investment in the medium and long term.
The renegotiation of the Bougainville Copper Agreement and the establishment of mining powers will be discussed at the next meeting of the PNG and Autonomous Bougainville Government Joint Supervisory Board, set for late June.
Since BCL chairman Peter Taylor said he detected a mood of reconciliation among Bougainvilleans and the ABG, the Panguna Landowners Association has also called for a return to mining.
Rio Tinto Technology and Innovation Group are undertaking an order of magnitude study to look at the annual production of the mine in a range of 20-50 million tonnes per year along with projected copper and gold prices. The study is expected to be complete in August.
Taylor said the ore body at Panguna is only partially mined with large available reserves and in the mine’s last year of operation estimated mill feed was at 691Mt at 0.40% copper and 0.47 grams per tonne gold.
With mining operations suspended since 1989, BCL has relied on its investment portfolio which had 13.7% growth for 2007.
PNG Industry News
26.05.2008 THE NATIONAL (PNG) Hospital runs out of vital drugs |
By NELSON K PHILIP
THE president of European Shareholders of Bougainville Copper Ltd (ESBCL) has said the Buka Hospital is at risk of running out of important but cheap medicines in the days to come.
Axel G Sturm, who recently visited PNG, said from Bangkok that people having to die due to shortage of cheap basic drugs like antibiotics would not be acceptable in a modern world.
He has written to the Bougainville Copper Ltd (BCL) to get its assistance in providing basic medicines for the hospital and has appealed to the board members to see if the Bougainville Copper Foundation could find a solution.
Sturm also said ESBCL would welcome if a major part of the dividends that were not paid to the shareholders could be used for that purpose.
The shortage of medicines is reportedly due to inconsistent funding and failure of suppliers.
The hospital pharmacist said they had been instructed to be wise in distributing drugs to the wards and patients.
He said they were managing the situation on a day-to-day basis.
“We get our supply from Rabaul but now we’re told that we have to look for some other suppliers for basic medicines,” he said. |
26.05.2008 PNG Gossip
Buka Hospital
The European Shareholders of Bougainville Copper Ltd (ESCB) have written a letter to Peter Taylor, the chairman of Bougainville Copper Limited, asking for help to provide funding for the hospital at Buka. The hospital risks running out of important medicine.
22.05.2008 POST-COURIER (PNG) Leserbrief
BCL has not paid compo
The recent arrival of a so- called representive from European shareholders of Bougainville Copper (ESBC) is in fact another angel of death posing to bring restoration to the trouble torn island of Bougainville.
He stressed that he came to convey the European shareholders’ message for an immediate commencement of Bougainvile Copper Limited (BCL) to start mining on the island.
Does Axel Sturm know that the people of Bougainville are still awaiting for compensation to be paid by BCL for the thousands of lives and properties lost or damaged as well as the lost opportunities?
Does he know that BCL will never again set foot on the island now and in the years to come unless the inhabitants are compensated?
Does he know the history of the Bougainville mine ?
Mr Sturm or any other interested foreign elements should refrain from discussing this sensitive issue on Bougainville.
Rio Tinto urged to sack BCL chairman
A GROUP called European Shareholders of Bougainville Copper (ESBC) are irked by the management style of BCL chairman Peter Taylor and want him removed.
ESBC shareholders, who hold 4 per cent of shares in the company which used to mine the giant Panguna copper/gold mine, said they had written to parent company Rio Tinto asking for Mr Taylor’s immediate sacking.
“We deeply regret that we do not have any other option as to do so,” said ESBC president Axel Sturm.
He said since the 2008 annual general meeting (AGM) of the company in May, BCL had ignored requests by landowners to resume mining operations at the Panguna mine.
“The Panguna landowners who I met in Port Moresby earlier in May officially invited BCL to come back and resume mining. Obviously Mr Taylor does not want to listen.” he said.
Mr Sturm and ESBC vice president Mr Dechen, who assisted in organising the annual general meeting of Bougainville Copper in Port Moresby, said the BCL management had violated corporate governance rules.
“The voting results of the AGM, shortly thereafter reported to the Australian Stock Exchange (ASX), are purely faked figures,” Mr Sturm said.
“There neither has been a serious control or justification to assist the AGM nor has the BCL management secured a regular counting of votes. “The ESBC will not tolerate that AGM of Bougainville Copper, which effectively owns one of the potentially biggest copper mines in the world, is managed like a burger shop.
“Therefore, the ESBC also informed the ASX upon their claim to remove chairman Peter Taylor from heading BCL.”
Mr Sturm also said since Mr Taylor announced a three-year plan to reopen the Panguna mine, the shareholders had been kept in suspense as no further information had been provided.
“There is no information of a time schedule, no information of the roadmap and the steps to take, simply nothing,” he said.
“We the shareholders simply claim our legal right to be regularly and generally kept informed about the ongoing activities of our company. Although we accept that some sensitive contents might not be suitable to be published to a greater public.
“We strongly hope that Tom Albanese and other responsible managers of Rio Tinto take notice of these serious corporate governance violations and acknowledge that Bougainville Copper Limited needs a new and serious leadership that respects the legal rights of its shareholders and that is acting in a responsible, dynamic, active, creative and motivated shareholder communication.
“The shareholders and especially the Bougainvilleans on the ground expect partners in BCL that they can trust.”
Mr Taylor could not be reached for comment.
29.07.2008 PNG Industry News (Perth/Australia)
Shareholder group calls for resignation of BCL chairman
Blair Price
Tuesday, 29 July 2008
A SHAREHOLDERS activist group is seeking the resignation of Bougainville Copper (BCL) chairman Peter Taylor as it accuses the company of corporate governance failures and dragging its feet on the return of mining to the PNG island.
In the current climate of high commodity prices, there has been growing interest from Government and landowners in resuming operations at BCL’s Panguna mine on Bougainville Island – the world’s fourth-largest copper mine before its closure in 1989.
The European Shareholders of Bougainville Copper (ESBC), which says it holds around 4% of Rio Tinto subsidiary and Australian Securities Exchange-listed BCL, made its concerns known in a letter from its president Axel G. Sturm to Rio Tinto chief executive Tom Albanese.
Having attended BCL’s annual general meeting in Port Moresby on May 8, Sturm said there were inadequate controls that could allow anyone to enter and put a false name on a list and receive a voting card. He also alleged his 800,000 votes were not represented.
“As a consequence of not holding an AGM that meets corporate governance standards, the voting figures from the AGM which have been transmitted to the ASX were fake, inaccurate or at the very least misleading.”
Sturm also criticised Taylor for allegedly not responding to a Panguna landowner invitation for BCL to officially return to Bougainville and resume mining.
To speed up a possible return to mining Sturm has asked Albanese to install a new, motivated leadership in BCL and to have the company’s senior management continuously present in its PNG headquarters.
“Let me make it clear from my travels to PNG and discussions with Panguna landowners, PNG and Autonomous Bougainville Government Ministers and MPs, along with shareholders, that all of these varying stakeholder groups would like to see a return to mining at Panguna.
“The ESBC expect Rio Tinto, as major shareholder of BCL, to provide the company with a chairman and a board of directors that is able to face the upcoming work and challenge.”
However, BCL chairman Peter Taylor has told PNGIndustryNews.net his company adheres to ASX corporate governance standards and all the resolutions at the general meeting passed on a show of hands.
“There is nothing controversial but it’s a bad statement (by Sturm) because it gives the impression that somehow the company is falsifying figures,” he said.
In any case, Taylor confirmed Rio Tinto holds 54% of BCL shares in round figures, which would mean Rio Tinto can vote through all motions at the meeting through its majority shareholding.
On the topic of recent Panguna landowner interest in a return to mining at Bougainville , Taylor said he was encouraged but it was not a clear case.
He said the compensation agreement made back in 1980 had more than 600 signatures on it meaning that many landowners or landowner representatives were involved in the process.
“So when a few individuals come along and say they are landowners – they are some landowners – and I think that is the issue.
“I am encouraged that more and more landowners are saying that they want the mine to reopen but there are also those people who are saying they do not want it to reopen and I think therefore the reconciliation process that has started is very important and probably a key to trying to get consensus.”
On the criticism from Sturm, Taylor said: “He would probably like to see development happen quicker so the share price would go up faster but unfortunately for him there is a formal process that must be adhered to and it will be.”
The ASX has confirmed with PNGIndustryNews.net that the ESBC’s allegations have been received but could not discuss the matter because of its own confidentiality obligations.
A prefeasibility study on mining at Panguna is expected to be released next month.
Rio Tinto Technology and Innovation Group’s order of magnitude study looks at the annual production of the Panguna mine in a range of 20-50 million tonnes per year along with projected copper and gold prices.
BCL’s operations at Panguna have been suspended since 1989 due to military and civil strife related to the island’s struggle for independence from PNG.
BCL shares last traded at $A1.03
Rio Tinto Wants To Restart PNG's Bougainville Mine
Dow Jones Emerging Markets Report
SYDNEY (Dow Jones)--Rio Tinto Ltd.'s (RTP) plan to reopen its majority-owned Bougainville copper mine in Papua New Guinea - almost 20 years after a bloody secessionist war forced the operation to shut down - is making slow progress, but the company hopes "to return to mining," in PNG, a senior company executive said Tuesday.
Bougainville Copper Ltd.(BOC.AU), in which Rio holds a 54% interest, plans to present preliminary results of a feasibility study on the project in August, Chairman Peter Taylor said by telephone.
The study is aimed at examining whether mining would be economically feasible at the site, in the changed environment of soaring copper prices.
Activities at the 180,000-metric-ton mine ceased in 1989 during a civil war, resulting in the deaths of thousands of people on the South Pacific island.
The mine was one of the triggers for the escalation of violence, as local residents were unhappy with benefits from mining flowing to the PNG mainland instead of to them.
In May, Bougainville said it was studying a proposal to restart production of between 20 million ton and 50 million tons of ore annually.
"We're hoping to finish the study by the end of the year. We depend on third parties for 'the order of magnitude' study, and it's hard to get people in the mining industry," said Taylor .
Many mining projects have faced significant delays and cost blowouts because ongoing strong demand has made most inputs - from drill rigs, trucks and tires to even geologists - significantly more expensive.
The initial outlay for the 'order of magnitude' study is only A$0.5 million, miniscule in mining finance terms, but the amount "isn't fixed," said Taylor .
Cost Overruns A Real Possibility
Mining services contractor Hatch will carry out the study, and capital costs to restart the mine are pegged between US$1.2 billion and US$1.5 billion, according to analysts. However, that figure is highly likely to go up given cost pressures across the mining industry.
"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 redevelop the Panguna operation," Bougainville said in a statement.
Copper prices on the London Metal Exchange have quadrupled since 2003, led by China 's rapid industrialization. That has been a primary reason behind the revival of interest in the mine.
Earlier this year, the PNG government and the semiautonomous island of Bougainville started paving the way to lift a moratorium on mining activities to boost the economy of the impoverished island.
The government plans to follow a 15-step memorandum of understanding over the next three years to allow exploration and mining, while treating Bougainville 's Panguna mine separately.
Ore at Panguna mine was estimated in 1989 at 691 million tons at concentrates of 0.4% copper and 0.47 grams a ton of gold.
"The MOU - in theory - doesn't affect Panguna as it had been granted a mining lease. But we would need to revisit the Bougainville Copper agreement, and there's no timetable other than the three years devised by the government," said Taylor .
One group, titled European Shareholders of Bougainville Copper which claims to own 4% in the company but don't appear on the share register, recently sent a letter to Rio Tinto Chief Executive Tom Albanese, asking for the removal of Taylor , alleging corporate governance failures and feet dragging.
"We've had no direct contact with this group. They don't appear on our share register of 20 largest shareholders, though they may hold shares through nominees," said .
-By Elisabeth Behrmann, Dow Jones Newswires Taylor
Former Clerk of Parliament and Ombudsman, Bougainvillean SIMON PENTANU analyses the current situation following demands by BCL shareholders in Europe on what should be happening at Panguna.
Mine sensitivities are crucial
These missives being passed as press statements by ESBC are totally uncalled for. This is not the first time Mr Sturm and ESBC (European Shareholders in Bougainville Copper) have come out firing, or misfiring to be more to the point, like this all the way from Europe, almost demanding what should happen with BCL and Panguna.
Mining in PNG is by no means an easy industry or sector to be involved in.
In Bougainville many lives have been lost over perceptions of what the industry meant or brought or did — or did not do or bring — to the local landowners.
The resulting conflict cost non Bougainvillean lives as well. No one group or faction should be blamed for what happened; and neither should BCL cop all the blame.
It is very easy for a group of shareholders to mark time in the lavish and opulent surroundings continents away in Europe and make scathing criticisms when a company they hold shares in does not do what they would like it to do in Bougainville.
The latest criticism against BCL and its management is uncalled for given the situation on the ground in Bougainville. All it achieves is create more confusion, a position that is symptomatic of the level of understanding ESBC has on the situation in Bougainville. These kinds of self-seeking missives or statements do not help the perception and views of many Bougainvilleans, including many landowners who will not accept any return to mining until many other outstanding and unresolved issues are brought to proper closure.
The ESBC is either not aware of or conveniently ignores that before any return to mining can happen there are very important and critical aspects of the peace process such as outstanding reconciliations between landowner groups and individuals that must take place.
WHAT is the real purpose of ESBC in seeking Peter Taylor’s resignation? Has ESBC considered the possibility that any resignation (or talk of resignation) at this time may in fact be a retrogressive step for BCL considering the gains made in terms of a growing acceptability and preparedness in the last three to four years by a wide cross section of the Bougainvillean population to engage in discussions on mining.
Is ESBC aware or given any thought to the fact that BCL has to consult with or canvass the views of all landowners (not just one group), the ABG and other Bougainvilleans at large before any serious thought is given to resumption or reversion to mining in Panguna.
And the thing is, some of this is happening and the proof of this is people are more prepared to come out expressing their views on mining than they would have been not so long ago. This may not be exponential progress but in the continuum of events since the crisis, there is no denying by anyone there have been movements. It is quite naive on the part of Mr Sturm and ESBC to even think that Taylor and BCL should start going back to Panguna on the basis of Panguna Landowners Association statements coming out of the last BCL AGM. This just cannot simply happen.
May be this is too much for ESBC to understand from where they are in Europe. Sturm’s criticism of Taylor is misplaced and misconstrued in every sense when considered in light of the current situation with regard to mining in Bougainville.
The most Taylor or anyone in his position can do in the current situation is exercise due care and responsibility to ensure that there is proper understanding with all stakeholders and that the climate is secure before he can commit the company and shareholders to Bougainville. So out of touch is the statement that it can only come from the heads and mouths of those that do not understand the situation on the Island. No mining company or management would contemplate a return to full scale mining in Bougainville today, even if this were at the invitation or behest of Panguna landowners “to officially return to Bougainville and resume mining”.
It’s almost like saying the Emperor is naked! This is why some of the statements attributed to Sturm are a total miscue.
I think ESBC means well and their support and sympathy for landowners and Bougainville is appreciated. However, their understanding and position delivered through very deliberate statements of their views and intentions is not always carefully thought out. This is unhelpful, if not an insult to BCL as well as to Bougainvilleans that have been seeking ways and options to address this issue in the most open and amicable fashion among and with each other involving landowners, ABG leadership and other Bougainvilleans who also matter very much in this.
ESBC is ostensibly concerned about the value of their shares! So are many other shareholders. But other shareholders are cautious and exercise better sense and judgment when it comes to understanding and commenting on the issues at large in Bougainville, knowing full well that the people and the Island have been through a terrible human turmoil.
Such turmoil and conflicts take a long time to heal. The best way to sum up ESBC’s approach is they are trying very hard to be helpful but in doing so they are marginalising themselves and it is not easy to win any supporters and sympathizers by this seeming “go for broke” mentality. On the other hand it is quite understandable and normal that a group of European shareholders who are not familiar with the local situation but whom quite rightly keep an eye on the stock market aren’t going to be too concerned about local cultural sensitivities.
