* Bougainville Island lifts decades old ban on new mining
* Area is rich in reserves of iron ore, copper
* In past, province roiled by conflict over giant copper
* Some locals unwilling to give up agrarian lifestyle
(Recasts; adds comment, detail)
By James Regan Benjamin Weir
SYDNEY, May 2 An autonomous area of Papua New
Guinea scarred by a violent history of exploiting its vast
mineral resources has lifted a 40-year-old ban on new mining,
looking to start churning out iron ore and copper to ship to key
metals markets like China.
Bougainville Island was roiled by a bloody secessionist
conflict that lasted over a decade from the late 1980s, fired by
a campaign of sabotage by landowners angry about the
distribution of benefits from the giant Panguna copper mine.
That mine has remained closed since then, with Rio Tinto
relinquishing ownership last year, while mining
elsewhere on the island has been banned since the 1970s due to
concerns over revenue-sharing and potential environmental
"We have learnt our lessons from the Panguna experience and
now we have the opportunity to do a better job," Bougainville
president John Momis said in a statement on Sunday.
"I invite and welcome applications from prospective
applicants to invest in our mining sector," he said, without
specifying why the ban had been lifted now.
Scrapping the ban allows for applications to mine in the
iron ore rich areas of Tore, Isina and Jaba, but does not
include Panguna, one of the world's largest copper mines.
It comes as the island creeps towards an independence
referendum by mid-2020 that could cut the last ties with the
Developing new mines would offer a chunky injection of
foreign revenue into one of the poorest communities in the
Southern Hemisphere, but could meet with stiff opposition from
islanders reluctant to shed an agrarian lifestyle.
"We have seen a recognition among landowners that the
revenue from mining can often be less than expected and
employment opportunities limited," said Luke Fletcher, director
of the Jubilee Australia Research Centre, which advises
The Bougainville uprising was the longest running conflict
in the Pacific, with the central government at one point
deploying mercenaries to try to end the fighting.
Bougainville Copper Company, which now controls
Panguna and is listed on the Australian Securities Exchange, has
been working separately with landowners to put together a plan
to eventually rework the mine.
The company could not be reached for comment on the switch
in government mining policy.
Momis said that only serious investors should apply for
mining rights - but that could take time.
Bougainville legislation is unique in that it recognises the
ownership of mineral resources by the customary owners of the
land. That puts 95 percent of property in Bougainville in the
hands of small tribal clans, which must be consulted and
compensated before tractors are brought in.
"This could delay the process, so it is a bit unclear if the
serious majors will come in under such a regime or are we going
to have fringe players of the mining world?" said Anthony Regan,
who advises the Bougainville government on constitutional
Several mining companies, including Australia-based
Fortescue Metals Group and BHP Billiton
, did not immediately respond when contacted by Reuters
to gauge interest in investing in Bougainville.
(Reporting by James Regan and Benjamin Weir in Sydney; Editing
by Joseph Radford)