Chief executives of global companies still lose sleep over political risks, but since the heyday of the British East India Company not many businesses can claim to have played a part in a country's descent into civil war.
Rio Tinto is one. Protests by landowners about its Panguna mine on the Papua New Guinean island of Bougainville were among the triggers for a decade-long conflict in which as many as 15,000 people died between 1988 and 1998, according to an Australian parliamentary inquiry.
The company's plan to give away its stake in the mine to landowners and Papua New Guinea's government shows how times have changed. While the risk of violence has kept the site out of action for a generation, Panguna has about $51 billion of copper in its rock. It would probably count as one of the world's biggest pits, if only it could be mined.
That's the rub. There's a delicate balance between the governments and landowners who control most of the world's minerals , and the mining companies with the capital and expertise to get them out of the ground. While miners have spent the best part of a generation cleaning up their act to prevent a repeat of the Bougainville conflict, those political risks never really went away.
The proof is a bit further along the vast Indonesia-New Guinea archipelago. On the same day Rio announced its plans for Panguna, Newmont said it's selling its stake in the Batu Hijau copper mine to an Indonesian consortium for $1.3 billion. The pit's future has been in jeopardy since 2014, when Jakarta banned the export of some raw metal ores in an attempt to encourage a local smelting industry. Grasberg, a Freeport-McMoRan pit on the Indonesian part of New Guinea and the world's second-biggest producing copper mine, has been hit by the same issues.
Or look at the Democratic Republic of Congo. Africa's biggest copper producer suffered a civil war over its deposits shortly after independence from Belgium in 1960, and it's still a hairy place to operate. The mines minister has objected to Freeport's $2.65 billion sale of its Tenke Fugurume mine to China Molybdenum, and is considering charging taxes on the transaction. There will be a presidential election in November, and there's a risk of renewed unrest if the incumbent Joseph Kabila, whose father Laurent played a pivotal role in the 1960s conflict, tries to prolong his rule.
Even in Mongolia, where Rio Tinto's current prize copper asset is being developed at Oyu Tolgoi, the company hasn't been immune. While the landslide win for the opposition in last week's elections suggests a strong hand for a government that hasn't proposed significant policy changes, the country's outgoing prime minister suffered a parliamentary confidence vote in January over his decision to expand the project.
Miners have done their best to minimize these problems. The clashes at Panguna, along with a number of similar disputes, prompted a rethink during the 1990s and early 2000s of how mining companies dealt with the rights and claims of indigenous landowners and governments. To its credit, Rio was at the forefront of this process.
Anglo American and Rio both pulled out of the Pebble copper-gold project in Alaska a few years back after objections from environmental and indigenous groups. Energy Resources of Australia, a Rio Tinto-controlled company that operates one of the world's biggest uranium mines, said last month it will close the site without developing underground resources after Aboriginal landowners said they didn't want the operation.
Still, if there's less tension now around political risks, it may owe as much to the commodity slump as to miners' efforts.
In 2010, a threat by the Australian government to raise taxes on mining profits prompted coordinated lobbying, led by Rio Tinto and BHP Billiton, that ultimately contributed to Prime Minister Kevin Rudd's sacking by his party. A version of the tax hastily rewritten by his successor, Julia Gillard, was so favorable to the big miners that it raised less than A$400 million ($298 million) compared with a projected A$12 billion for Rudd's tax, and was ultimately dropped.
That fight made sense for both miners and politicians when the companies were boasting margins of about 80 percent on Australian iron ore. When prices fall and mines barely make money, there's a lot less at stake.
You can expect less angst among mining companies over the apparently hung parliament Australia returned in its elections Saturday than the one Gillard ended up leading in 2010. But don't make the mistake of thinking the battle will never be rejoined.
There's an inevitable division of spoils between between miners on one side, and landowners and governments on the other. Once prices recover, the tensions will resurface. Political risk for mining companies isn't dead. It's just dormant.
This column does not necessarily reflect the opinion of Bloomberg LP and its owners.
The Bougainville conflict grew in part out of clashes between those first two parties -- landowners on the independence-minded island felt Papua New Guinea's central government was getting too large a share of the proceeds from the site.
To contact the author of this story:
David Fickling in Sydney at firstname.lastname@example.org
To contact the editor responsible for this story:
Paul Sillitoe at email@example.com