Port Moresby, 8-10 February 1966
Confidential
The present position and possible future development—
(A) BOUGAINVILLE AREA—GENERAL
C.R.A. is interested in 200 square miles of country … in Southern Bougainville. Ore occurs in four areas marked pink on the small map.2 The Company representatives confirmed that the results of prospecting to date had indicated the possibility of large scale operations, treating low grade ore to yield copper sulphide concentrate for export.
Testing and feasibility studies covering the economics of the whole operation will take until the end of 1967 to complete. The Company expects to spend $2m. on this phase of the work in the next 12 months.
The Company is now operating 4 drills on the main ore body at Panguna, testing to a depth of 1,000’, but will increase the number of drills to 12 by the end of the year if the road is completed. With the completion of the road, drilling will go to a depth of 2,000’. Roadwork. now in progress is being carried out by operators from the Snowy Mountains Authority who are striking considerable difficulties due to the high rainfall and terrain. The ore body will be worked on the open cut system and the main ore body will probably be 1¼ miles long and ¼ mile wide. With a batter of I in 3 to dispose of overburden, a considerable quantity of land will be taken up by purely mining operations. However, a greater problem will be the disposal of tailings when a mill is operating. 1,000 tons of tailings per hour or 10,000,000 tons per year will need to be handled. The Company wishes to dispose of the tailings by dumping them in the Kawerong River, and claims that Mt. Lyell has been disposing of tailings in this fashion for a number of years. It is claimed that the cost of controlled disposal is prohibitive.
The development of mining operations and mill to produce concentrates for export will cost $100m., plus or minus 30%. The value of concentrates exported will be $30m. to $40m. per annum.
To export the concentrate, road access from the coast to the field will be required plus, possibly, a rope way and power lines. A port will be needed, also access to water for mining and staff purposes, and possibly hydro resources.
During the feasibility study, the staff requirements will be 120 Europeans plus 400 indigenous, which will probably be expanded by 30% by the first quarter of 1967. In the productive phase staff requirements will be of the order of 700 Europeans and 400 indigenous trained employees. The operations will be highly mechanised so there will be a minimum requirement for unskilled labour.
Because of the scale of the preliminary prospecting investigations and the range of the facilities required to develop the field, the Company requires, at an early date, assurances and guarantees from the Administration that land and services necessary to develop to the mining stage will be made available; such security is also necessary to enable contacts to be made with possible sources of loan capital. At this stage of the operation, C.R.A. can give indications of the type of facilities they will require but cannot give the specific location or the magnitude of their requirements.
[matter omitted]3
[NAA: A452, 1967/1107]
1 The meeting was attended, inter alia, by Henderson, Groves, Wood, Espie and King. Ahrens attended for DOT.
2 Not printed.
3 Matter omitted includes discussion of the CRA’s tentative requirements, further details of which are described in the Company’s initial written proposals (Document 19).