Rio Tinto is planning to review all options for its 53.83% stake in the Bougainville Copper (BCL), after a bill passed by the Autonomous Bougainville Government (ABG) last week stripped the company of its seven exploration licences and its special mining lease for the Panguna open pit mine in Papua New Guinea.

One of the options would be to sell its stake in BCL, reported Reuters.

The Panguna mine, which produced around three million tonnes of copper and 9.3 million ounces of gold over 17 years, was closed in 1989 after violence erupted in the country, with protestors forcing the company to shut down the mine.

"Even after securing finances and getting approvals, the mine would take five to seven years to re-open."

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

Bougainville Copper chairman Peter Taylor said: "I have made BCL’s concerns about the potential adverse impact the new Act may have on the company’s asset base known to the national and Bougainville Governments.

"Dialogue will continue with both governments and landowners in an effort to reach agreement on providing the company with the assurance it needs to go forward with community and study programmes that are required to further assess the viability of re-opening the mine."

According to Bougainville Copper’s estimates, even after securing finances and getting approvals, the mine would take five to seven years to re-open.

In addition, a 2012 study forecast that the company would require a $5.2bn investment to bring the mine back to production.

The Panguna mine is expected to have another five million tonnes of copper and 19 million ounces of gold reserves at the site and would be capable of running for a further 20 years.