steals headlines

Raid at PNG mine steals headlines

FOR mining giant CRA Ltd, things

continue to go badly in Papua New Guinea (PNG).

The chance of its subsidiary, Bougain ville Copper Ltd (BCL), regaining con trol of the Panguna Mine closed since May 1989 is starting to look bleak, with the company beginning to acknowledge that a sale is possible, while a local

politician has now drawn the spotlight on the Mt Kare project by leading an armed raid on that mine. Surprisingly, the company appears not to have lost heart it h a s just bought out a minority interest in its Wafi gold prospect near Lae.

The Mt Kare raid took the headlines when Provincial MP Joseph Yalia led a seven-man armed gang on to the Mt Kare site in Enga province. They tied up the crew operating the processing plant and advanced on the main camp with drawn guns. They demanded the Mt

Kare Alluvial Mining Pty Ltd joint venture (operated by CRA with the loca landowners holding a 49 per cent share) build a road through mountains into the village of Paiela. Two of the people involved were later arrested and a search was mounted in the jungle for the others.

Yalia was charged with property damage and extortion and released on bail. Loca landowner groups publicly disassociatec themselves from the raid but did support the company funding develop ment projects including the road to Paiela.

Mt Kare is a comparatively small mine and will be producing more than 25,000 ounces of gold a year, through the company’s two dredges on the site.

Work resumed at Mt Kare after a week, but the incident will not help the country’s international reputation.

The latest Bougainville development

was more complex. Foreign Affairs Minister Sir Michael Somare said he had an offer from American financier Jay Pritzker who was prepared to offer CRA SUS7OO million for its 53.6 per cent stake in BCL. He was reportedly prepared to stake another SUS3SO million to rehab ilitate the BCL’s Panguna copper mine on Bougainville, and help the PNG government fund health services on the island once it regains control.

For his investment, Pritzker (who controls the Hyatt Hotel chain) would take a 51 per cent stake in the copper mine, 30 per cent would go to the landowners and the remaining 19 per cent to the government in Port Moresby.

Observers have been curious that the offers have been made via Somare.

Pritzker himself has made no public comment.

CRA’s position is that it has met with Pritzker but nothing has occurred to change its position that it is not seeking to sell its investment, but that if a change of ownership is the final impediment to a political resolution of the Bougainville crisis, then CRA would be prepared to consider selling provided it was adequately compensated and the interests of other BCL shareholders safeguarded. But it would have these discussions with the PNG government, not a third party.

The whole business is premature, it seems, as the PNG government still seems a long way from being able to have any influence on events on Bougainville island. A senior minister has argued that the government should wait several months before holding a further round of talks with Bougainville’s secessionist rebels. Provincial Affairs Minister Father John Momis said priority should be given to restoring goods and services to the rebel-held island, about 1000 km north east of Port Moresby.

Prime Minister Rabbie Namalii in late February sent a letter to rebel leaders

Sam Kauona and Francis Ona request ing an urgent round of talks to settle a number of disputes plaguing the Honiara Peace Declaration signed on January 23.

Kauona and Ona have both rejected the declaration as not addressing key issues such as secession. Momis said that if peace talks were held now, the rebels would renew their demand for secession, and Port Moresby would reject it, leaving them as far apart as ever.

Meanwhile, CRA has reached agree ment with Elders Resources Ltd to purchase the latter’s 45 per cent share in the Wafi gold project in the Morobe province, 50km southwest of Lae. CRA originally held 100 per cent of the venture, but sold down a share to Elders in 1988. CRA said relatively high grade and potentially economic porphyry cop per mineralisation was discovered at the Wafi prospect late last year. □