The development of Panguna encountered substantial resistance from local landowners. Bougainvilleans had no role in approving the project and received few benefits after it commenced operating in 1972.

The landowners also bore many of the mine’s costs, including environmental destruction caused in particular by riverine disposal of mine waste, social disruption triggered by village relocation, the influx of thousands of outsiders and unequal distribution of the limited benefits that did reach landowners.

This situation changed little after independence.

In 1988-89 these circumstances led to the destruction of infrastructure by Bougainvilleans seeking temporary mine closure to force a re-negotiation of the mining agreement. The national government, which relied heavily on Panguna for its revenues, tried to suppress by force what it saw as a serious law and order problem and a protracted civil conflict followed.

The violence rapidly escalated into a broad-based secessionist rebellion which resulted in thousands of deaths, led many educated Bougainvilleans to flee the island and resulted in the 1989 closure of Panguna  and the destruction of much of Bougainville’s physical and social infrastructure.

The conflict ended in 2001 with the signing by PNG and Bougainville of the Bougainville Peace Agreement. But to this day Panguna remains closed, with little imminent prospect of re-opening.

Before the conflict began, although Bougainville’s economy was dominated by the mine and associated industries, there was significant small-holder cash crop production, mainly cocoa and copra.

Small scale mining of gold had been undertaken in the 1930s by Australian and other expatriate miners at Panguna and Kupei in the Crown Prince Mountains. The remains of equipment used by these miners, who left Bougainville before the war, can still be seen as can the tunnels they dug in pursuit of  gold bearing ore.

In 1997-98, faced with the absence of income-earning opportunities in the wake of the Bougainville conflict, people started to engage in small scale mining.

As news spread about gold’s potential value as an income source, and as knowledge of mining methods was obtained from miners from Panguna and the tailings area, small scale mining started in Kanavitu, Atamo and Kopani, and then into other areas, mainly in central Bougainville.

Its spread accelerated in the mid-2000s when the pest cocoa pod borer devastated many recently re-established cocoa blocks, forcing cocoa farmers to find an alternative source of income.

Small scale mining now occurs at dozens of  sites,  all  on  land  held  under  customary  title, mainly  by small  and mostly matrilineal clan groups.

 It provides a livelihood, or supplementary incomes, for thousands of Bougainvilleans, and constitutes at least the second largest sector of Bougainville’s cash economy after cocoa production.

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