Rio Tinto announced that it has transferred its 53.8% stake in Bougainville Copper Limited (BCL) to an independent trustee.
“Equity Trustees Limited will manage the distribution of these shares between the Autonomous Bougainville Government (ABG) for the benefit of all the Panguna landowners and the people of Bougainville, and the Independent State of Papua New Guinea (PNG),” the mining giant said in a press release.
Rio Tinto said that under the trust deed, the ABG can receive 68% of Rio Tinto’s shareholding (which equates to 36.4%of BCL’s shares) from the independent trustee for no consideration, with PNG entitled to the remaining 32% (which equates to 17.4% of BCL’s shares).
According to the company, both the ABG and PNG will hold an equal share in BCL of 36.4% if the transfers are completed.
“This ensures both parties are equally involved in any consideration and decision-making around the future of the Panguna mine,” is says in the press release.
The Trust Deed also determines that it either beneficiary of the trust does not apply for the transfer of the BCL shares attributable to them from the trustee within two months, those shares will be made available to the other party.
“Our review looked at a broad range of options and by distributing our shares in this way we aim to provide landowners, those closest to the mine, and all the people of Bougainville a greater say in the future of Panguna,” said Rio Tinto Copper & Coal chief executive Chris Salisbury.
“The ultimate distribution of our shares also provides a platform for the ABG and PNG Government to work together on future options for the resource.”
Rio Tinto said it already gave the required six months’ notice to terminate the arrangement, in accordance with the existing management agreement with BCL.
“Although Rio Tinto will no longer hold any interest in BCL, Rio Tinto will continue to meet its obligations under the agreement during that period to ensure an orderly transition in the shareholdings of the company,” reads the press release.
“BCL chairman Peter Taylor will resign with immediate effect but he will continue to be available to provide services to the board during this transition period.”
The Panguna copper mine is located in the east of Papua New Guinea in the Autonomous Region of Bougainville. It is considered to be one of the largest copper reserves in Papua New Guinea and in the world, with estimated reserves of 1 billion tonnes of ore.
The mine was closed in 1989 because of a violent military conflict that erupted over the spoils of the massive profits generated by the mine.