PORT MORESBY– Panguna’s copper and gold mine will take about 10 years to re-establish at a construction cost of up to K19 billion ($A7.7 billion), a Bougainville Copper Ltd chief has told a tax summit in Buka.
And no decision will be made to re-open the mine until BCL is convinced of the viability of the project and has conducted a ‘bankable feasibility’ study, said BCL company secretary Mark Hitchcock.
Mr Hitchcock said a realistic timeline for Panguna would see the mine operational around 2025-26 and potential tax revenue had to be viewed as a longer-term prospect with no short-term, direct tax generation
However the project’s development and construction period would present income generation opportunities for Bougainville.
The three-day tax and revenue summit was an initiative of the Autonomous Bougainville Government to assess the financial outlook of the province and the ABG’s ability to fund public services.
Mr Hitchcock told the summit that the project’s reconstruction phase would cost an estimated K13-19 billion.
Once developed, the mine would generate significant tax revenue for its operational life, expected to be more than 25 years.
Mr Hitchcock emphasised the need for certainty in the tax regime and warned that excessive tax imposts would undermine the project’s viability.
“One potential pathway is for the ABG and PNG national government to work towards a joint agreement to provide assurances regarding applicable taxes that would apply over the long-term,” Mr Hitchcock said.
In addition to tax revenue, the Panguna project would have a multiplier effect in terms of economic benefit.
“A project of this scale will help stimulate the economy in a multitude of ways in areas such as training and employment, new business opportunities in the supply of goods and services and the provision of new infrastructure to name a few,” he said.