Sandline International provided training and military assistance to the PNG government against the Bougainville rebels until a military revolt led to the suspension of the contract and the arrest of its chief executive, Tim Spicer. Businesses linked to Sandline had previously discussed the reopening and the financing of a copper mine while the Papuan government was undergoing negotiations with the British-based security company.
Tony Buckingham, whose businesses include mining and oil interests and operate from the same offices as Sandline said yesterday: "We offered to assist in identifying the right sources of capital and ownership."
Australian mining giant RTZ-CRA was forced in May 1989 to close the Panguna copper mine in central Bougainville, an island 500 miles north-east of the Papuan capital, Port Moresby, after rebels staged a series of sabotage attacks. Panguna, operated by RTZ-CRA's 53.6 per cent owned Bougainville Copper Ltd, generated a third of Papua New Guinea's foreign exchange.
According to Mr Buckingham: "The strategy recommended was for the Papua New Guinea government to buy back the mine from CRA so that they would control the equity and then get responsible groups involved in the development of the mine."
Mr Buckingham is known for his extensive mineral and energy interests in Angola and Sierra Leone where he introduced Executive Outcomes, the world's largest private army, to the governments of Sierra Leone and Angola. Some observers see his ventures as a new form of colonialism, securing mineral concessions on the back of private military ventures. But Mr Buckingham's response to these allegations is pragmatic: "If there is no stability there is no investment and no one benefits."
He insists that as a businessman his primary aim is to ensure satisfactory conditions for stability, which include ensuring that the government and population of the area where his interests lie are considered.
Mr Buckingham and Sandline have denied that any concessions would have been granted in lieu of payment. A Sandline spokesman said: "Sandline's mission was to bring about the resolution of the Bougainville conflict which would also entail the securing of the Panguna mine from the rebels. This was a straight cash deal."
Mr Buckingham also maintains that he has no corporate link with Mr Spicer's company although he advised and assisted Mr Spicer with his negotiations. "The point is that PNG holds a major asset which no one is benefiting from, least of all the people of Bougainville. Sandline's role was to deal with the security elements, our role in conjunction with other parties and the government would have been to develop the mine which would have brought benefits not only to the investors but also to Papua New Guinea and the people of Bougainville," he said.
Mr Buckingham claims that the present crisis has set Bougainville back many years.
An inquiry into the affair in PNG heard yesterday that the deal was proposed in a letter dated 1 August 1996. It suggested a "joint venture with your government, ourselves and RTZ-CRA to reopen and operate the Bougainville mine once recovered", said Ian Molloy, counsel assisting the inquiry.