Papua New Guinea shocked by Australian diplomatic move

By James Regan SYDNEY (Reuters) - Papua New Guinea's prime minister on Thursday said he was shocked by an announcement from former colonial ruler Australia that it might open a diplomatic mission in the restive island of Bougainville, where a referendum on independence is scheduled. Polls opened on Monday in the copper-rich Autonomous Region of Bougainville to elect a president ahead of a referendum on independence from Papua New Guinea. A result is expected on June 8. "There has been no consultation on this proposal and there is no agreement to proceed," Prime Minister Peter O'Neill said after addressing business and academic leaders in Sydney to mark the end of Australian rule 40 years ago. "Bougainville is an integral part of Papua New Guinea." Under a peace agreement signed after a nine-year civil war with the Papua New Guinea mainland ended in 1998, Bougainville has until June 2020 to hold the referendum. The conflict forced resources giant Rio Tinto to abandon its Panguna copper mine in Bougainville. At the time, the mine was the largest single source of export revenue in Papua New Guinea and comprised about 7 percent of the world's copper production. Rio Tinto, through its majority-owned Bougainville Copper Co, has insisted it will consider prospects for a restart only when the island's political and civil situation stabilizes. O'Neill said he only learned about the proposal for a diplomatic post in Bougainville when reading papers issued by Australia this week outlining its fiscal 2016 national budget. "We were shocked to learn from the budget documents that Australia is planning on establishing a diplomatic post in Bougainville," he said. A representative for Australian Foreign Minister Julie Bishop said the proposal was discussed in December and that Australia's High Commissioner to Papua New Guinea formally advised the government before Tuesday's release of the budget. The Australian government assumed responsibility for the southern half of modern-day Papua New Guinea in 1906 by agreeing to take control of what was then a British colony. During World War One, Australian forces expelled German administrators from the northern half and claimed the entire country an Australian territory. By the 1970s, control of Papua New Guinea was affording little strategic benefit to Australia and many Papua New Guineans yearned for independence, which came in September 1975. (Editing by Nick Macfie)