Landowners attack, close mine

In an attack reminiscent of the still unresolved 3-year-old Bougainville copper mine conflict, disgruntled Papua New Guinea (PNG) landowners have brought the operations of another mine site in the South Pacific country to a standstill.

The management of the Mount Kare gold mine on the main island has decided to close down operations after an armed gang attacked the mine site recently, terrorizing employees, stealing cash and gold and causing damage to mine equipment estimated at US$3 million.

The attackers also issued a warning to the developers and majority shareholder, Australian-based CRA Minerals Ltd., to get out of Mount Kare. CRA, which has a 51% stake in the Mount Kare gold mine, also operated the Bougainville mine which is at the centre of the 3-year-old civil war between separatists seeking independence and the PNG government.

The Bougainville conflict stems from demands by young landowners on the island for a larger share of revenues from the mine, one of the largest open pit copper mines in the world which provided 40% of PNG’s export earnings. Unlike the Bougainville mine, Mount Kare’s remaining 49% share is held by over 6,000 landowners from the five main clans in the mine area. Despite the large landowner participation, however, Mount Kare’s year-long mining operations have been disrupted by disputed claims of various landowner factions.

As a result of the attack, operations at the mine have been brought to a complete halt with both expatriate and local staff being evacuated, CRA managing director Ian Johnson said.

If the threatened closure of the mine does materialize, the loss to the company and PNG could amount to US$800,000 a month. A second processing plant was to have come into operation in another 2-3 weeks.

With PNG still suffering the consequences of the closure of the Bougainville mine, condemnation of the Mount Kare attack has been furious. Prime Minister Rabbie Namaliu described it as “a serious criminal offence,” and has ordered a full investigation to apprehend and arrest those responsible.

The PNG Chamber of Mines and Petroleum said the attack “will further tarnish PNG’s overseas image and erode its ability to attract investments in all sectors of the economy.”

Opposition leader Paias Wingti blamed the company and the government for the attack on the Mount Kare mine, adding: “It seems CRA has not learned after the Bougainville crisis to improve its attitude and dealings with landowners.” He accused the company of not dealing honestly with all landowner groups and warned “any foreign exploitation of their resources would result in more Bougainville-type situations.”

PNG is well poised on the verge of an unprecedented minerals and petroleum boom, having just started exporting its own PNG-stamped gold bullion. It recently sent a major promotion mission to the U.S. and Canada to attract investments.

With a gold production of just over 60 tons last year, PNG now ranks as the sixth largest gold producer, behind South Africa, the U.S., Australia, Canada and Brazil.

— Inter Press Service