Rio Tinto Reviewing 'All Options' for PNG Project

Mining behemoth Rio Tinto (LSE:RIO) (NYSE:RIO) is considering all options following a devastating new law at its Bougainville copper mine in Papua New Guinea.

The new bill, which was approved on Friday, revokes Rio Tinto’s seven exploration licenses and special mining lease at the Panguna mine. The company announced it will review all viable options and opportunities going forward.

"Rio Tinto has decided now is an appropriate time to review all options for its 53.83 percent stake in Bouganville Copper," the company said in a statement.

According to Bougainville Copper managing director Peter Taylor, the company has not ruled out legal action but did confirm pulling the cord on the project was not an option. As for plan b, the government of Bougainville has a keen interest in re-opening the mine for economical reasons.  

"For some time, Bougainville Copper has been involved in discussions with the Government of Papua New Guinea, the Autonomous Bougainville Government and landowners about whether it would participate in a future potential return to mining at Panguna,” Rio Tinto said.

The mine (which has been closed for over 25 years) was a major contributing factor in the country’s bloodiest civil war. The open-pit mine drew ire for causing environmental and social problems among the community.

The Bougainville Mining (Transitional Arrangements) Bill 2014 essentially negates Rio Tinto’s subsidiary Bougainville Copper from mining the Panguna mine. It also gives more power to local landowners.