Uncertainty is poison: Sturm

EUROPEAN Shareholders of Bougainville Copper president Axel Sturm says Papua New Guinea must change into a “land of the expected” and unsurprisingly, he believes significant government investment into reopening the Panguna mine will pay off.
Uncertainty is poison: Sturm Uncertainty is poison: Sturm Uncertainty is poison: Sturm Uncertainty is poison: Sturm Uncertainty is poison: Sturm

While there has been uncertainty over whether the Panguna mine will ever reopen since it closed down in 1989 before the subsequent civil war, ESBC is concerned that Bougainville Copper shares are becoming prey to short sellers due to the recent political instability in PNG.

"It has a new Prime Minister [Peter O'Neill] elected by an overwhelming majority in Parliament while an old stubborn prime minister [Sir Michael Somare] cannot accept having been ousted," Sturm said.

"Unfortunately, the new prime minister's Deputy [Belden Namah] contributes to this situation by making irritating statements from time to time.

"This fires foreign investors' confusion."

PNG's parliament has passed the long-heralded sovereign wealth fund designed to safely manage windfall government revenues from the PNG LNG project - especially through offshore investments to avoid causing even more local inflation.

But Sturm told PNGIndustryNews.net that SWF investment into PNG industries would be a great signal to investors worldwide.

In what would also lift his own share portfolio, Sturm would like to see the PNG government increase its stake in Bougainville Copper (about 19%) and even buy more shares to give the Autonomous Bougainville government its first stake.

"I imagine if PNG/ABG hold up to 25 per cent or even more in Bougainville Copper, both would be keen to increase their stake's value by fast-tracking the reopening [of] the Panguna mine," Sturm said.

"A strong investment in Bougainville Copper shares by PNG would be understood by investors as PNG's commitment to a better economic future.

"Investors are watching out for security of their investment - uncertainty is poison.

"Certainty is strongly needed now."

The Frankfurt Stock Exchange has become the leading stock market for trading Bougainville Copper shares which are also Australian Securities Exchange-listed.

A key and longstanding hurdle to reopening the Panguna mine is gathering the support of community landowners.

There were around 600 landowners or landowner representatives of the 1980 compensation agreement for the mine - providing plenty of scope for differences of opinion.

Panguna was the world's fourth-largest copper mine in the months before it closed in 1989 and had produced 9 million ounces of gold and 3 million tonnes of copper from 1972.

Rio Tinto owns around 54% of Bougainville Copper.

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