PAPUA New Guinea Prime Minister Peter O’neill’s visti to the Autonomous Region of Bougainville has been aluded as one of the first steps for reconciliation between the PNG mainland and the war-plagued island.

His visit in February to a number of towns in Bougainville marked the first by a serving PM since a ceasefire was signed in 1998 and was regarded by the community and local media as one which was symbolic of Mr O’Neill extending an olive branch.

In a recent economic update spotlighting the visit, the Oxford Business Group (OBG) said it not only paved the way for reconciliation, but renewed commercial interest in the region.

Bougainville has struggled to achieve economic growth as an independent state following a history of civil war which started in the late 1980s largely as a result of the controversial Panguna copper mine.

The mine was forced to close in 1989 after protests over environmental damage and royalty distributions led to a decade-long civil war between PNG and the Island.

Owned by Bougainville Copper Limited (BCL), whose largest shareholder is Rio Tinto, Panguna was one of the world’s largest copper mines, making the island one of PNG’s most advanced provinces. However the mines subsequent closure and Bougainville’s distance from the mainland has meant it has been unable to reap the economic and social developments that have come with the huge investment being poured into resources projects in PNG.

The traditional ceremony, which was attended by press, was jointly held with Autonomous Bougainville Government (ABG) president John Momis, involved breaking arrows to mark a new beginning.

In a sign of financially committing to assist Bougainville, Mr O’Neill announced a $590,000 development package for the island, while promising to invest $2.14 billion in the province over the next five years.

“Bougainville’s needs echo PNG’s own development priorities, with infrastructure, services, health care and employment all featuring high on the list,” OBG said.

Mr O’Neill’s development package is said to include vital funds for roads around the provincial capital, Buka.

During the trip, state-owned enterprises Minister Ben Micah, also announced plans to reopen Bougainville’s international airport, Aropa.

“The government hopes that f lights operated by the national carrier, Air Niugini, will be re-established within three months, paving the way for the resumption of international connections to the Solomon Islands,” OBG said.

“The plan to reopen the airport is expected to improve the delivery of goods and services, while boosting the local economy.”

While there are those for and against a possible re-opening of the Panguna mine, BCL chairman Peter Taylor has proposed a five-year timeline leading to the reopening of the mine, which dovetails with an impending independence referendum to be tabled in Bougainville between 2015 and 2020.

“The desire to be seen as distinct from mainland PNG was a major source of tension over how earnings from the Panguna mine were distributed and also lies at the root of the independence movement,” OBG said.

“Before the mine’s closure, Bougainville received 1.23% of the government’s 5% royalty commission.”

However, OBG said resurrecting its mining operations was viewed as Bougainville’s only means of achieving independence given its economy has struggled in the absence of mining revenues.

“However, a move to reopen Panguna will not be straightforward. Hostility is expected from landowners, while feelings still run high among those who suffered during the war,” OBG said.

“Despite the challenges that exist, the fact that the BCL remains listed and is still trading on the Australian Stock Exchange 25 years after the mine closed has instilled optimism in some that the mine could reopen.”