PNG - Bougainville

Bougainville is home to the legendary Panguna mine, formerly operated by Bougainville Copper, a subsidiary of Rio Tinto (LSE:RIO). At the time of its shuttering in 1989, it was the world's largest copper mine and still holds considerable reserves of both gold and copper according to BCL updated estimates.

Prior to the outbreak of the Bougainville crisis, there had been a moratorium on exploration on the island with the exception of the Special Mining Lease on which the mine was situated. On the outbreak of the crisis the moratorium was extended over the whole island, a situation that has not changed with the ceasefire and the establishment of the Autonomous Bougainville Government. We believe many companies may be waiting for the passage of new legislation, particularly a new Mining Law.

During this period Morumbi has been the only company reaching out to the various Landowners' Groups to build meaningful long-term relationships based on mutual respect and trust. Consistent with the Bougainville Constitution, our underlying philosophy has always been that any mineral resources are the property of people under whose traditional lands they lie, and that those resources can only be exploited with their cooperation and involvement in partnership.

As a result of this unique approach, we have entered into seven agreements by way of MOU's with different Landowner Companies representing the people of their respective areas, namely, Isina, Pakasiapan (Kopani), Avaipa (Mainoki), Baunapa (Atamo) Eruupia (Kawatsia), Karato and Papatana (Korovi).

We also believe that we should be able to convert all the MOU's into Licenses if and when a new Mining Law comes into force, subject to approval by the relevant authorities.

In June of 2012, The Legislature approved a review of Draft Mining policy for consideration by the Executive Branch for later submission and approval of Parliament.

Deputations from the various Landowners' Groups to the ABG over the last several weeks have pushed for early passage of a number of laws.

We strongly believe that passage of a New Mining Law will prompt a rush of Multinational mining companies to try and secure Licenses on the island.