Rio Tinto has sold its 53.8% stake in Australian copper, gold, and silver mining company Bougainville Copper (BCL) to Equity Trustees.
After obtaining the shares, Equity Trustees will distribute them between the Autonomous Bougainville Government (ABG) for to benefit all Panguna landowners and people of Bougainville, and Papua New Guinea (PNG).
Under the deal, ABG will receive 68% of Rio Tinto’s shareholding from Equity Trustees and PNG is entitled to the remaining 32%.
Both ABG and PNG will hold an equal share of 36.4% in BCL once the transfers are completed and will equally involve in any consideration and decision-making around the future of BCL’s Panguna mine.
Rio Tinto Copper & Coal chief executive Chris Salisbury said: "Our review looked at a broad range of options and by distributing our shares in this way we aim to provide landowners, those closest to the mine, and all the people of Bougainville a greater say in the future of Panguna.
"The ultimate distribution of our shares also provides a platform for the ABG and PNG Government to work together on future options for the resource."
In accordance with the existing agreement with BCL, Rio Tinto will give the required notice of six months to cease the arrangement.
BCL operated the Panguna open cut mine on the island of Bougainville in PNG from 1971 to 1989.
The company halted mining operations on 15 May 1989 when employees were attacked during an uprising.