Lloyds Metals & Energy has received approval to begin preparatory work for the possible redevelopment of Papua New Guinea’s Panguna copper mine, nearly four decades after the operation was shut down.

The approval marks a major step for a mine that has remained at the center of Bougainville’s economic and political debate for decades. But it does not mean mining can resume yet. Lloyds must first complete feasibility and other preparatory work before seeking further approvals.

The Autonomous Bougainville Government said Aug. 7 that Lloyds could carry out an approved program of preparatory works and feasibility activities to assess the mine and plan its redevelopment.

For Bougainville, the Panguna project is about more than copper. The autonomous region is seeking greater economic independence from Papua New Guinea, and reopening the mine could bring investment, jobs and government revenue if the project moves ahead.

Copper demand puts Panguna back in focus

Panguna is also drawing attention as mining companies look for new copper supplies to meet demand from power grids, electric vehicles and other parts of the global energy transition. The deposit is estimated to contain about 5.3 million tons of copper and 19.3 million ounces of gold, according to Lloyds’ plans to reassess the resource.

Lloyds was chosen as the approved development partner of Bougainville Minerals, the government-owned company that holds the mining lease. It emerged ahead of China’s CMOC Group, one of the world’s largest copper producers, for the redevelopment role.

Panguna’s long road back

The Panguna mine was operated by Rio Tinto before it closed in 1989 following protests over environmental damage and the distribution of mining revenue.

The dispute later became part of a civil conflict that killed thousands of people.

The history means any redevelopment will face close attention from Bougainville’s government, communities and customary landowners.

Earlier this year, some landowners challenged activities at the site, saying companies had entered the area without proper authorization.

Lloyds expands beyond iron ore

Lloyds Metals & Energy is an Indian mining company with a major iron-ore business and is expanding into copper and other minerals.

In May, the company said its subsidiary, Panguna Metals and Energy Ltd., would serve as its vehicle for pursuing cooperation and mining arrangements connected with the project.

For now, Lloyds can study and prepare the project, but construction and production require separate approvals. The next phase will determine whether Panguna can move from a long-shuttered mine to a commercially viable copper operation.