A new study by Rio Tinto's majority-owned subsidiary Bougainville Copper Ltd says the mine on Bougainville island still contains at least 5 million tonnes of copper and 19 million ounces of gold, worth $41 billion and $32 billion, respectively, at today's prices.
Renewed interest in the Panguna mine comes as Rio Tinto, which is expected to report a 20 percent drop in annual profit to around $10 billion on Feb. 14, has earmarked a greater focus on its copper and iron ore businesses in the coming years.
Rio Tinto has long-shunned returning to the island despite an end to hostilities in 2001 and discussions from time to time with the government. In 2005, it sold its stake in another mine in Papua New Guinea's Lihir island.
There has been no exploration or mining at Panguna because the site remains off-limit despite the formation of an autonomous island government.
Between 1972 and 1989 some 3 million tonnes of copper and 9.3 million ounces of gold were mined from the Panguna lode.
The potential for a restart could only be fully assessed once it was safe to return to the mine, according to Peter Taylor, managing director of Bougainville Copper, which owns the Panguna mine.
The new estimate for copper and gold "supports consideration of a number of potential development options", Taylor said in a statement.
"BCL ( Bougainville Copper) continues to work with stakeholders on exploring ways in which the project may be advanced," Taylor said.
Bougainville Copper's income is now generated primarily as interest revenue on a range of investments. In 2000, it began to dispose of its Bougainville assets and has since developed a portfolio of debt and equity investments.
For the year ended December 31 2012, it posted a loss of 5.4 million kina, or about $2.6 million.