An Indian iron ore producer has set up a subsidiary in Papua New Guinea to redevelop a massive copper mine that’s been shuttered for almost four decades and was at the heart of a bloody civil war.
Lloyds Metals and Energy Ltd. on Tuesday said the wholly owned unit will “pursue a long-term cooperation and mining agreement in respect of the Panguna mine.” The fast-growing Indian firm has seen off competition from China’s much larger CMOC Group Ltd. to become the local authorities’ preferred partner for the ambitious project.
The move is part of a global dash for copper as the trend toward electrification is expected to boost demand for the metal in the years ahead. The discussions around the dormant asset’s future also reflect the desire for economic development in Bougainville – impoverished South Pacific islands that are currently an autonomous region within PNG but seeking independence.
Bougainville Copper Ltd., which holds the licenses containing the mine site, said last month it had signed a non-binding agreement with Lloyds that granted the Indian firm a 90-day exclusivity period to undertake due diligence. The Autonomous Bougainville Government controls almost 73 per cent of BCL.
Panguna’s remaining reserves are estimated at 5.3 million tons of copper and 19.3 million ounces of gold, which would be worth about $160 billion at today’s prices. However, the mine was closed down in 1989 under the ownership of Rio Tinto Group due to local protests over environmental damage and revenue distribution, which degenerated into a civil conflict that killed as many as 20,000 people. Rio gave away its 54 per cent interest in BCL in 2016.
Lloyds said on an earnings call on Wednesday that its new PNG company is “very active,” describing Panguna as a “very rich copper and gold deposit.” It cautioned investors that the firm is still in discussions with the government about acquiring the project.
BCL’s first choice to revive Panguna was CMOC, one of the world’s biggest producers of copper and the top supplier of cobalt from two giant operations in the Democratic Republic of Congo.
That plan was scuppered when President Ishmael Toroama, who’s run Bougainville since 2020, and his cabinet endorsed Lloyds. In November, the company signed a memorandum of understanding with the autonomous region focused on development opportunities.
BCL said in January that Lloyds was “bypassing” the company’s selection process but a month later acknowledged the decision and terminated its own search for a partner. Henan-based CMOC mined nearly 750,000 tons of copper last year – about 3.3 per cent of the global total.
Lloyds recently invested in two copper joint ventures in Congo, which the company says could eventually reach annual output of 100,000 tons. The firm also produced nearly 22 million tons of iron ore in India last year.
Lloyds Panguna Metals and Energy Ltd. was incorporated on April 20. The entity “will serve as the dedicated project and engagement vehicle for executing cooperation, MOU, and joint venture agreements with BCL and holding any rights, licenses, or equity interests arising from the Panguna engagement,” the firm said.
The cost of bringing Panguna back to life will be steep. A BCL study in 2021 found it would need at least $6 billion and seven years of work. A phased approach could be quicker and cheaper.
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Published on May 7, 2026