SYDNEY - The Pacific island of Bougainville has rejected a partnership with Chinese miner CMOC to reopen a gold and copper mine that was among the world's largest before it was shut by a bloody civil war, instead opting to deal with an Indian company.

With a population of 300 000, Bougainville has set a deadline of 2027 to achieve independence from Papua New Guinea, and needs to reopen the Panguna mine to build its economy.

Previously operated by Rio Tinto, the Panguna mine was once a major export earner for Papua New Guinea, before it closed in 1989 as a civil war that killed 20 000 people broke out.

Bougainville President Ishmael Toroama said in a statement on Thursday that he had rejected a proposed partnership between Bougainville Copper and CMOC. It was the first public indication that the Chinese company had been chosen by the local miner to invest in Panguna.

Bougainville Copper was instead directed by Toroama to engage with the Indian company Lloyds Metals & Energy Limited for a mining or services partnership contract model.

In a statement to the Australian Stock Exchange on Friday, Bougainville Copper said its representatives and CMOC were "continuing efforts to engage with the president".

CMOC declined to comment.

Bougainville sits 30 km from the Solomon Islands, which struck a security pact with China in 2022, as Beijing seeks to expand its influence in the strategically located region.

Oliver Nobetau, Pacific fellow at the Lowy Institute think tank in Australia, said Toroama has previously said he would seek investment from Beijing if western countries did not step up to support Bougainville, and it was interesting that an Indian company was now favoured.

"With a Chinese company there is a risk of what it will bring to regional stability. It is right next to Solomon Islands," he said.

The Bougainville government became the largest shareholder in Bougainville Copper, with a 72.9% stake, after Papua New Guinea transferred its shares to the autonomous region on January 14.

Nobetau said Bougainville needs an economic injection from the mine, as it can only generate 5.3% of its budget internally.

Papua New Guinea Prime Minister James Marape has said that Bougainville must be able to fund at least half of its budget if the Pacific archipelago's aspiration of political independence is to be a success.

Before the mine closed, Bougainville contributed 44% of Papua New Guinea's export earnings.

Bougainville's population voted for independence in 2019. However, independence must be confirmed by a vote of Papua New Guinea's parliament.