Bougainville Hopes Mine Reopening Will End Strife

BOUGAINVILLE'S copper mine reopens this week. And the Papua New Guinea government hopes the opening will mark the end of the most tumultuous period in the young South Pacific nation's history. For three and a half months, one of the world's largest copper mines has been shut down by terrorist attacks by disgruntled landowners.

Some displaced landowners want more money for better living conditions and compensation for environmental damages. Others want Bougainville Island to break away and form its own nation.

But after more than a month of violent skirmishes, Army troops and riot police now say they've secured the mountainous jungle area surrounding the mine. Last week, repairs were completed on sabotaged power pylons and production is set to begin Friday.

The mine is crucial to the Papua New Guinea government. Last year, it brought in 40 percent of the small nation's foreign-exchange earnings. It was supposed to provide 19 percent of this year's budget revenue. The closure has cost the government about $70 million in lost taxes and royalties so far.

The full impact of the mines closure won't be felt until next year when Bougainville Copper Ltd., a subsidiary of CRA Ltd., an Australian mining firm, pays 1989 taxes. The company doesn't expect to be back to full production until the end of this year.

Both Prime Minister Rabbie Namaliu and the company have made concerted efforts to appease landowners. The federal government will be giving a bigger slice of the revenue pie to landowners and the provincial government. The package includes an equity stake in the mining company and about $225 million in benefits over five years.

And earlier this month, Bougainville Copper announced a multi-million dollar compensation package offering better housing, new roads, water systems, health services, and small business advisory assistance.

Whether this will bring the Bougainville crisis to an end still seems uncertain. As one mining analyst said, ``Some of the rebels still have explosives. If they knock out just one power pylon on that long access road from the coast, then the mine's shut down for at least three or four days.''

Meanwhile, world copper prices are not likely to fall when the mine resumes production. In fact, prices are heading up as supply fails to keep pace with demand.