Papua New Guinea's National Executive Council has appointed Graeme Hancock, whose contract as World Bank Papua New Guinea mining sector project director is about to expire, to talk with interested parties.

"The dynamics of the politics on island are changing and that gives some hope that at some time in the future the people of Bougainville will once again welcome exploration and development," Hancock told Dow Jones Newswires in an interview, adding it won't happen quickly.

The parties involved will be the autonomous Bougainville government, landowners, the national government and Bougainville Copper Ltd. (BOC.AU), which owns the closed Panguna gold and copper mine.

Hancock wouldn't give a timeframe for the review, saying there are many outstanding issues, including Bougainville's desire for compensation for environmental damage by the Panguna mine a decade-long civil war, which erupted after the mine closed in 1989.

Panguna, once the world's third-largest copper mine, was shut down by Rio Tinto PLC (RTP) subsidiary Bougainville Copper after attacks by locals that developed into a fight for independence.

The mine remains closed despite a cease-fire in 1998 and the formation of the autonomous island government.

Bougainville Copper has kept ownership of the mine and is the only company with exploration permits on the island.

The review, which has been supported by both the Papua New Guinea and Bougainville governments, will look at the Bougainville Copper agreement, which covers mining and exploration on the island and hasn't been changed since mining stopped.

The Bougainville government said Wednesday that while it needs a solid economic base and welcomes the review, mining remains a sensitive issue on the island and will only go ahead after a referendum.

"The perception of many Bougainvilleans, who are not landowners, is that Rio Tinto and indeed the Panguna landowners themselves have a debt of restitution to all other Bougainvilleans for the 20,000 lives lost during the crisis and destruction of properties," Mike Forster, a member of the autonomous government's mining policy drafting unit.

"Until the autonomous Bougainville government has adopted an appropriate minerals policy that protects our rights and ensures equitable distribution, it is unlikely that any result from discussions with Bougainville Copper can be reached," said Forster, who is also an attache for Bougainville President Joseph Kabui.

Hancock, who has worked in Papua New Guinea's mining sector for 16 years, said the review will be funded by the national government and Bougainville Copper.

"It will start when we get the budget approved for the office of facilitator, which I think is what we will call it, and we hope to have that done within the next one to two months," Hancock said.
Bougainville Copper Chairman Peter Taylor said Tuesday that economic and political factors for restarting Panguna and attracting investment to the island are more positive than they have been but that any moves won't happen quickly.

Extracted from: Yahoo Business News