December 27, 2017 / 2:26 AM / a year ago

UPDATE 1-Australia's Bougainville Copper falls on Panguna moratorium report

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By Devika Syamnath

Dec 27 (Reuters) - Bougainville Copper Ltd shares fell on Wednesday following a report that the government of the Pacific island of Bougainville plans to impose a moratorium on mining or exploration at Panguna, once one of the world’s biggest copper mines.

Bougainville Copper has been working to restart the mine, which was shut by a civil war in 1989.

Bougainville President John Momis said the island’s executive council decided to impose the indefinite moratorium after landowners narrowly failed to support a plan to reopen the mine, the New Zealand-based Asia Pacific Report said on Dec. 23.

“We will not allow this project once again to reignite the wounds of the Bougainville crisis and distract our focus for restoring peace and our preparation for our referendum in 2019,” the report quoted Momis as saying.

The Autonomous Bougainville Government could not be reached for comment.

Bougainville Copper said in a statement it was seeking clarification from Bougainville’s Department of Minerals and Energy Resources about the report.

Bougainville’s quarter of a million people are tentatively scheduled to vote on independence from Papua New Guinea in June 2019. Revenue from the reopening of the Panguna mine is essential for the otherwise impoverished island.

There has been a struggle over who will run the mine between Bougainville Copper, backed by the Bougainville and Papua New Guinea governments, and a consortium of Australian investors supported by the head of the landowners.

The abandoned copper and gold mine contains one of the world’s largest copper deposits. During its 17-year life until the closure in 1989, Panguna was credited for generating almost one-half of Papua New Guinea’s gross domestic product.

Bougainville Copper’s shares tumbled as much as 17 percent on Wednesday, compared to a 0.4 percent rise on the Australian benchmark, giving the company a market value of about A$90 million ($70 million). ($1 = 1.2937 Australian dollars) (Reporting by Devika Syamnath in Bengaluru; editing by Richard Pullin)

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