Shares in Bougainville Copper (ASX: BOC) rose as much as 64.3% to A$0.575, on Friday, their biggest intraday percentage gain since February 2022, after receiving a five-year extension for its exploration licence for the Panguna copper-gold project in the South Pacific island of Bougainville.
The giant Panguna mine, formerly operated by Rio Tinto (ASX: RIO), closed down in 1989 after local protests over mine revenue turned into a civil war that killed as many as 20,000 people. Arguments over mine pollution and compensation to locals were also central to the conflict.
A peace agreement in 2001 ended the war, set up the region’s autonomy and paved the way for Bougainville’s 2019 referendum on its full independence from Papua Guinea. Locals voted overwhelmingly to break free from PNG, but their independence must still be ratified by the government and could take years.
Rio Tinto gave away its stake in 2016, effectively donating the mine. That left the governments of Papua New Guinea and Bougainville with 36.4% each of Bougainville Copper Limited (BCL).
Speculation about the future of the idled operation was common in the years after the mine closure. Interest peaked in late 2017, when an application to restart it was put to a vote, but the project was placed on the back burner as the results were almost evenly split.
When the Panguna mine was in operations, it was one of the world’s largest, accounting for 44% of PNG’s gross domestic product.
Estimates from 2020 indicated it would take seven to eight years and $5 billion to $6 billion to rebuild the mine and resume full operations.
It is believed the mine still holds about 5.3 million tonnes of copper and 19.3 million ounces of gold.
Bougainville Copper’s stock closed 128% higher at A$0.80 a share on the ASX, its highest level since Nov. 1, 2023. The company has a market capitalization of A$320.85 million ($212m).
