PANGUNA – Rachael Meara stands ankle deep in the Kavarong River with a shovel in her hands. She is nine months pregnant.

Her daily search for gold is how she and her husband Sylvester support their five children.

“I know it’s dangerous but there’s no other way,” Meara says, her mouth bright red from chewing betel nut, a mild stimulant.

The family lives in the tailings area of Central Bougainville, a moonscape of crushed rock left over from the Panguna mine.

The huge open pit mine itself has been derelict since the outbreak of violence in 1989 that morphed into a decade-long civil war, claiming thousands of lives.

There is still plenty of gold to be found in the tailings but getting to it can be dangerous.

Alluvial miners like Meara use mercury to separate the gold from the river sand.

The bush alchemy is done on the riverbank, without protective equipment.

Silver globules of mercury are poured into a panning dish. They attract the heavy gold particles, which are later filtered, then burned away to leave 90 per cent pure gold dust.

It is a process Denis Kikari has seen many times.

Quietly-spoken and astute, Kikari is the local researcher for a study on Bougainville’s small-scale mining being conducted by the Australian National University (ANU) and Griffith University, with Australian Government funding.

“It is very risky, especially for the women who are pregnant and also for small children who are still at the stage of growing, because mercury is dangerous to the nervous system,” he said.

Down the mountain, at the nearby Arawa hospital, there is talk of unexplained illnesses and complications in pregnancies that one of the nurses attributes to mercury poisoning.

“I have two other cases that I’ve heard of that were premature pregnancy, birth defects, from using mercury,” Bernardine Kama, a community health nurse, said.

There is no scientific research linking mercury to birth defects and other health problems at Panguna, although the harmful effects of the substance are well known.

“Exposure to mercury – even small amounts – may cause serious health problems, and is a threat to the development of the child in utero and early in life,” the World Health Organization says on its web site.

The anecdotal evidence from around Panguna is enough to worry the government.

“People who are using mercury have a lesser lifespan than people who don’t use mercury,” Rose Pihei, Bougainville’s health minister, said.

“When we have maybe one-third of the population of Bougainville doing alluvial gold mining, how many lives are being threatened by that poison?”

Pihei only recently took over the health ministry and was shocked to learn of the impact of mercury.

She gave a speech about the dangers of mercury and a committee was formed within the Autonomous Bougainville Government. It has not provided the health minister with an update yet.

Perched precariously above the road into Panguna, there is a different kind of gold hunt going on, known locally as “hard rock mining”.

On a steep scramble of ochre coloured rocks, about 10 people work on various parts of the process.

Two men chip wearily away at the rock face with metal rods, pausing occasionally to inspect a rock for the glimmer of a seam.

A few meters away, a tiny tunnel disappears into the darkness with only the faintest human voice responding from inside the mountain.

Several men and women shovel gravel through a watery sluice and, below, a young man uses his broad feet as shovels, pushing the leftover slurry down the hillside.

Kikari says four people have been killed in this area from rock slides and tunnels collapsing.

It is dangerous but lucrative. The ANU estimates $30 million worth of gold comes from small-scale mining on the island each year, a figure arrived at by speaking with gold traders.

Back in Arawa town, it is a quiet day for Thomas Sivusia, the main gold smelter who turns the dust into small gold bars using a backyard furnace and three heavy moulds.

He estimates he has melted down about $80 million worth of gold in the last decade.

Sivusia points out that none of the gold revenue is taxed by the ABG, which depends on funding from the PNG national government to survive.

“If they had set a proper mechanism to maybe tax these people who have been coming here and getting the gold out, that would be one way for the ABG to benefit,” he said.

As it is, Arawa, like much of Bougainville, has been left behind.

Once a thriving hub of Panguna’s operations, bustling with well-paid expatriates, mainland Papua New Guineans and Bougainvillians, Arawa’s nightclubs have long closed, the squash courts have been re-purposed and a slightly surreal pall of 1980s nostalgia hangs over the place.

The Panguna mine site is even more of a throw back, with verdant jungle slowly taking back rusty mega-machines and skeletal warehouses.

On a busy day in Panguna, locals say there can be 1000 alluvial miners dotted around the tailings, sifting rocks and gravel.

On the day the ABC visited, there were only a handful of people digging, due to heavy rain and island-wide elections.

The government that wins these polls will shape the exact date and the wording of a referendum on independence that must be held in the next five years.

“We’ve been fighting for these two things – referendum and independence – and I’m happy we’re getting there,” Roselyn Bryaine told the ABC after she voted in the tailings village of Konnuku.

There is a lot to do before the referendum.

The 2000 Peace Agreement says Bougainville’s many weapons must be disposed of and “good governance” be in place before the referendum.

But the elephant in the room is the Panguna mine and its role in Bougainville’s future.

Could an independent Bougainville exist without Panguna re-opening?

If so, what will Bougainville’s economy be based on?

The copra industry might give a wonderful toasted coconut aroma to Buka town but it will not sustain a nation.

Any moves to re-start large-scale mining appear a long way off and will cost upwards of $5 billion.

A new mining law passed on April 1 effectively stripped the Australian company Bougainville Copper Limited (BCL) of its ownership of the mine, giving BCL merely the first right to negotiate with land owners.

“Let me assure you that the vision to return to active exploration and profitable, sustainable mining remains, with the active support of many local stakeholders,” BCL chairman Peter Taylor told the annual general meeting last month.

“I believe the economic self-sufficiency of Bougainville needs the successful development of Panguna.”

Bougainville’s relationship with BCL is complex.

Many people received their education and exposure to the world through BCL.

But the company is widely blamed for the bitter conflict, environmental damage and almost a quarter century of neglect.

Some people think it may be better to deal with the devil they know, rather than the often-shady companies who have moved in for scrap metal and mineral pickings.

For now though, the only mining in Panguna is the small-scale variety.

The new mining law also requires community licenses to be issued by the local level authorities, the Council of Elders (COEs).

This licensing is not happening yet and would need significant investment in the capacity of the COEs to avoid corruption and commercial exploitation.

For pregnant alluvial miner Rachael Meara – doubled over as she splashes water on to the shovel face and peers down at possible gold – there is no time for looking back and not much interest in looking too far into the future either.

“The crisis”, as the civil war is known, has taught people in Bougainville to live day-to-day and not expect too much help from outside.

They consider the gold that comes from the dregs of the Panguna mine as their birth right and if it takes dangerous digging and toxic mercury to get to that gold, so be it.