THE Bougainville Copper Limited recorded an after tax loss of K37.9 million compared with a planned loss of K8.0 million according to their 2015 annual report released early this month. And the operating loss was K6.5 million compared to K9.1 million in the previous year, reflecting the reduced spending due to the tenure uncertainty and the delay of Bel Kol.
A tax expense of K31.4 million included the de-recognition of interest withholding tax benefits of K4.4 million, which occurred as a result of the tax case resolution. BCL Chairman Peter Taylor in his 2015 Annual General Meeting Report detailed all this also singling out that the in April 2015 a court sanctioned mediation regarding an ongoing taxation dispute with the Internal Revenue Commission of Papua New Guinea was settled. K39.7 million was refunded to the company from the K71.1 million considered recoverable. He said that the company also supported the Bougainville Copper Foundation with a K1.0 million contribution allowing the continuation of education scholarships in 2016.
“For the year ended 31 December 2015, the company recorded an after tax loss of K37.9 million compared with a planned loss of K8.0 million. The operating loss was K6.5 million compared to K9.1 million in the previous year, reflecting the reduced spending due to the tenure uncertainty and the delay of Bel Kol. A tax expense of K31.4 million included the de-recognition of interest withholding tax benefits of K4.4 million, which occurred as a result of the tax case resolution. “Income was K4.8 million as planned. Expenditure of K11.3 million was lower than planned with expenditure for Bel Kol delayed.” Bougainville Copper is owned 53.83 per cent by Rio Tinto Limited. The Papua New Guinean Government owns 19.06 per cent, while public shareholders hold the remaining 27.11 per cent of the share capital. In the 17 years prior to 1989, the mine produced concentrate containing three million tonnes of copper, 306 tons of gold and 784 tons of silver. The production had a value of K5.2 billion which represented approximately 44 per cent of PNG’s exports over that period. Contributions to the National Government in the form of taxes, duties and dividends were approximately 17 per cent of internally generated Papua New Guinean Government revenue during that time.
A total of K1,088 million was contributed to the National Government, which represented 62 per cent of the net cash generated by the project between 1972-1989. In addition, payments to the then North Solomons Provincial Government and Panguna landowners, together with provisions made since 1990, amounted to K114 million. Further, Bougainville Copper’s presence in the North Solomons Province had promoted the development of significant local business enterprises to provide goods and services required for the mining operation and for the residents of the province. Bougainville Copper trained about 12,000 employees, including approximately 1,000 completing full trade apprenticeships and some 400 completing graduate and post-graduate studies that resulted in considerable progress in the localisation of the company’s employees and significantly added to the number of skilled workers elsewhere in the country’s workforce. The company has no employees.
The activities of the company are now managed on a contracted services basis by a small team of Rio Tinto PNG Limited staff based in Port Moresby. Following the conclusion of the peace process the company has re-engaged with the people of Bougainville and has been re-evaluating the development options.