ECONOMIC BENEFITS
It is true that Panguna’s redevelopment will require substantial new investment in the billions of dollars to be realised.
An initial smaller scale, high grade operation with a lower upfront capital cost is perhaps feasible, with the option to expand scale output further, once initial production is well-established.
The feasibility process will of course explore the redevelopment options in detail.
Irrespective, Panguna’s redevelopment promises to be a transformational investment for Bougainville. The project will stimulate economic activity during three distinct phases, including (a) the exploration and feasibility phase which we have now entered, (b) the mine and ancillary construction phase, and (c) finally the operational phase.
It will produce significant dividends for government, landowners, including land access payments, investors, and shareholders alike with multiplier effects across the local economy, even cascading down to village communities.
During the construction phase for instance, it has been estimated that accommodation and services would be required for around 500 construction workers. To support the mine a new residential community would also need to be developed in Arawa.
In addition, local roads will need upgrading along with Aropa airport as well as ports such as Loloho and Kieta and local healthcare facilities. Legacy issues associated with previous operations could also be logically addressed during the mine’s redevelopment.
For the ABG, Panguna can potentially deliver substantial ongoing payments, including royalties, corporate taxes, GST from goods and services, withholding tax and personal income tax, not to mention the value of shares themselves and any associated dividends.
This year (2024), the ABG’s total budget is about K761 million or about US$197 million. Revenue from Panguna could deliver multiples of this for Bougainville, of course subject to metal prices and future taxation arrangements. To underline the potential, when the mine last operated, it consistently contributed between 15-20 per cent of PNG’s internally generated revenue.
Such revenue will help support the broader development of community infrastructure and services on Bougainville, leading to improved living standards for our local people.
The new employment and training opportunities for local people will be significant.
Panguna previously employed more than 3,500 people in its latter days of which 83 per cent were PNG nationals and Bougainvilleans.
Over the mine’s life, about 12,000 people received training, including more than 1,000 who completed trade apprenticeships and 400 who completed tertiary studies. This added real capacity to the national workforce and benefited subsequent projects in PNG.
In addition, since 1997, BCL has provided scholarships for more than 1,200 Bougainvillean students to pursue tertiary education under the Bougainville Copper Foundation. The program continues to this day.
The construction and operational phases of a redeveloped Panguna will also generate new demand for the provision of goods and services which in turn will promote the development of local SMEs across a range of areas, including cash crop (cocoa, copra vanilla etc.) development in agriculture.
Previously, local contract opportunities arose in construction, catering, transport, accommodation, trades and general labour, livestock production, security, and steel fabrication to name but a few.
Looking back, the original investment in Panguna as a greenfield development amounted to about $400 million (AUD) in 1969 which equates to about $4.0 billion (AUD) today.
Just like then, a sizeable investment in Panguna Mark II will be game-changing for Bougainville, triggering multi-dimensional changes to a struggling, fledgling local economy.
BCL, having been endorsed as a trusted project partner, stands ready to advance this priority project for the people of Bougainville.
Thank you, ladies and gentlemen.
