IN a letter seen by PNG Attitude, Bougainville president John Momis has told the managing director of Rio Tinto he is concerned the Papua New Guinea government is positioning to buy Rio's 53.83% equity in Bougainville Copper (BCL).
Dr Momis advised Sam Walsh this information was conveyed to him early in December by two PNG government ministers.
One of them, Ben Micah, let Dr Momis know that, following a series of meetings with Rio Tinto, PNG wished to purchase Rio’s equity and is seeking the agreement of the Autonomous Bougainville Government for the deal.
Dr Momis wrote to Mr Walsh that, in earlier meetings with Rio Tinto in July, he had been assured “in the clearest terms” that the company had not yet finalised a review of its stake in BCL and that there was no agreement between Rio Tinto and the PNG government about a sale of equity.
Dr Momis sought Mr Walsh’s “urgent assurance that, if Rio has decided to divest, it will enter into discussions with my government about the consequences of such a decision.”
Replying to Dr Momis some days later, Mr Walsh said Rio’s review had “not reached any final conclusion” but that Rio is engaging “with interested parties”.
Mr Walsh wrote that “as a listed public company [Rio is] obliged to conduct the review in full compliance with [stock exchange] listing rules and other applicable laws and are limited in what we can discuss.”
Meanwhile Dr Momis - in a speech to the Bougainville parliament yesterday - said the PNG government has been ignoring the requirements of the Bougainville Peace Agreement and its chronic underpayment of grants and taxes has left the ABG’s budget in very poor shape.
He said that, if the matter was not resolved by February, the ABG will take the PNG government to the Supreme Court.
Dr Momis concluded his speech saying that “the peace agreement was a negotiated contract to end war.
"It was given effect by PNG constitutional laws.
“If we cannot trust PNG to implement the financial arrangements of that agreement, then on what basis can we maintain an ongoing relationship?” he asked.
One commentator on Bougainville affairs told PNG Attitude that “it seems strange that in a situation where PNG is in deep fiscal crisis, it proposes to spend US$100 million on shares in BCL, but at the same time claims it cannot meet its constitutional obligations to fund the Bougainville government.”