BOARD CHARTER

1. INTRODUCTION

In carrying out its responsibilities and powers, the Board will at all times recognise its overriding responsibility to act honestly, fairly, diligently and in accordance with the law in serving the interests of Bougainville Copper Limited's (“BCL”) shareholders, employees and community.

BCL is a member company of the Rio Tinto Group and generally will adopt, at a minimum, the requirements of the various policies adopted throughout the Rio Tinto Group.

The following are BCL's core values, which are reflected in the Board's conduct and activities:

• A safe and successful business to the benefit of all stakeholders;

• Grow the business in compliance with sustainable development principles;

• Respect for individual and collective differences;

• Integrity, honesty and fairness in business dealings;

• Compliance with law and principles of good governance;

• Being a valued member of the local community;

• Protection of heritage and environment of the mine site and surrounds;

• Return of mine use land in a safe and appropriate condition.

2. RESPONSIBILITIES

The Board is responsible for:

•  Reviewing and approving strategies and financial objectives proposed by management.

•  Ensuring that appropriate policies, strategies and financial objectives are implemented and monitored;

•  Business of the Board and Board Committee. The Board will determine the frequency, content and duration of Board meetings and ensure all matters which have a meaningful impact on shareholder value and company performance are raised and suitably dealt with in a timely manner;

•  The strategic direction of the company. The Board will provide strategic direction to senior management; review and approve strategic plans, financial goals and major corporate initiatives proposed by senior management.

•  Reviewing and ratifying systems of risk management; and

•  Monitoring compliance with all regulatory requirements

3. POWERS

specifically reserved for the Board are as follows:

•  confirming the appointment of a Chief Executive proposed by Rio Tinto and the terms and conditions of the Chief Executive's employment;

•  appointment of the Chairman and members of Board Committees;

•  any matters in excess of discretions that it may have delegated to the Chief Executive and set out in the Schedule of Matters Reserved for Decision of Consideration by the Board; and

•  Selection and appointment of external Auditors. The Board will recommend the duration and terms of appointment of the auditors; evaluate the performance of the Auditors;

•  approval of each of the following:

•  the issue of new shares and other securities in the company;

•  incurring of debt other than trade creditors incurred in the normal course of business;

•  capital expenditure in excess of $1,000,000 for in-plan matters and $500,000 for out-of-plan matters;

•  the acquisition, divestments or establishment of any significant business assets;

•  changes to the discretion delegated from the Board;

•  the annual operating plan;

•  changes to the capital and operating approval limits of senior management; and

•  the annual report and full-year/half-year results.

4. CODE OF CONDUCT / THE WAY WE WORK

The Board will:

(a) comply with and ensure compliance by management with Rio Tinto's Code of Conduct and The Way We Work; and

(b) review the Code of Conduct annually to ensure it adequately addresses the issues facing BCL.

5. AUDIT COMMITTEE

The Board has established an Audit Committee and adopted an Audit Committee Charter setting out the matters relevant to the composition, responsibilities and administration of the Audit Committee.

Each year the Board will review the Audit Committee Charter and recommend any necessary changes.

6. BOARD MEMBERSHIP/INDEPENDENCE

The Board is responsible for ensuring that its composition is sufficient to protect the interests of all stakeholders. Directors will discharge their duties in the best interests of all shareholders. The composition of the Board will recognize the majority ownership position of Rio Tinto. The Directors believe that it is appropriate corporate behaviour for controlling shareholders to ensure that their nominees be appointed directors on the Board. The Board believes that there are adequate controls in place (under the Corporations Act and ASX Listing Rules) to protect all shareholders from matters arising under related party transactions.

The Board will review its composition annually to ensure that the Board:

•  has a proper understanding of, and competence to deal with, the current and emerging issues of the business; and

•  can effectively review and challenge the performance of management and exercise independent judgment.

The Board will ensure that there is a procedure in place to allow Directors to obtain independent advice at BCL's expense.

7. INTERNAL CONTROL QUESTIONNAIRE

Each year the Board will review and sign-off on management's responses to the Internal

Control Questionnaire distributed by Rio Tinto.

8. DIRECTORSHIPS/SHARE PURCHASE

Each Director will advise the Chairman and the Company Secretary of:

•  all other directorships held by the Director and any changes to those directorships; and

•  all purchases or sales of any securities in BCL, Rio Tinto, Rio Tinto plc or any related company.

9. MANAGEMENT REPORTS

Management will provide the Board with:

•  a quarterly review of operations and financial position;

•  half-yearly and full year financial results; and

10. REMUNERATION POLICY

The Board acknowledges that BCL will generally comply with Rio Tinto remuneration and human resources policies. The Board will take into account the considerable advantages arising from participation in and compliance with Rio Tinto's policies in this area.

11. HS&E POLICY

The Board will comply with and review BCL's compliance with the Health, Safety & Environment Policies. The Board acknowledges that BCL will comply with all relevant Rio

Tinto health, safety and environment policies. The Board will take into account the considerable advantages in the areas of health, safety and environment resulting from BCL complying with Rio Tinto's policy requirements.

12. PUBLIC STATEMENTS & DISCLOSURE MATTERS

BCL will make full and timely disclosure to its shareholders and the market in accordance with its legal and regulatory obligations. The Chief Executive and Company Secretary will be responsible for such disclosures and will immediately advise the Board of any such disclosures.

13. MEETINGS

The Board and Audit Committee:

•  shall receive papers at least five (5) days prior to any relevant meeting; and

•  shall meet as required but at a minimum of three times a year.

14. CONFIDENTIALITY

The Board and each Director will maintain the confidentiality of all trade and business secrets or other confidential information of BCL and will use their best endeavours to prevent

the disclosure or publication of such information except as far as is reasonably necessary to perform the Director's functions or may be required by law or the Listing Rules).

15. SELF-ASSESSMENT

•  The Board will undertake an annual performance evaluation of itself that:

•  compares the requirements of this Charter with the performance of the Board;

•  sets out goals and objectives of the Board for the upcoming year; and

•  considers any improvements or changes to this Charter deemed necessary or desirable;

•  The performance evaluation will be conducted in a manner that the Board deems appropriate.

The Directors of Bougainville Copper Limited (BCL) are:

P R Taylor

Age 57 BA BSc LLB LLM

Lawyer formerly in private practice

Within the Rio Tinto Group:

• formerly Company Secretary Bougainville Copper Limited
• General Manager Commercial CRA Exploration Pty Limited, CRA Projects and General Corporate Counsel CRA Services Limited
• Appointed director of Bougainville Copper Limited April, 1997 and Managing Director March, 2000
• Appointed Chairman 21 October 2003

Currently a Director of AESOP Business Volunteers and Vice President of the Australia Papua New Guinea Business Council

R S Burns

BSc FAIMM FRMIT

Currently General Manager - Rio Tinto Improving Performance Together

Specialises in Mine Operations Management, Project Evaluation and Development and Internal Consulting

Joined Rio Tinto Group in 1980. Worked with Bougainville Copper Limited as a Projects Co-ordinator, Senior Plant Metallurgist, Chief Metallurgist/Manager - Technical Services and Mill Manager. Worked with CRA as Senior Project Manager (CRA Gold and RP&D) at sites including Hidden Valley (PNG), Mt Kare (PNG) and Reefton (New Zealand). Two Years as GM - Operations Wimmera Industrial Minerals, Victoria. Four and Half Years as GM - Production and GM - Technical with Kelian Equatorial Mining, Indonesia. Six Months as Managing DIrector Northparkes/Peak Mines and Seven Years as GM - Rio Tinto Technical Services Melbourne

Robert has published Seven Papers including subjects such as; comminuition, project development and operations management.

Speaks basic Indonesian 

John Leahy

University Qualifications in law and has been admitted to practice in Australia (NSW) and Papua New Guinea.

More than 18 Years senior tax experience in Papua New Guinea holding such positions as:

• AusAID Expert advisor to the Department of Finance (PNG)
• Assistant Collector of Taxes, Internal Revenue Commission (PNG)
• Managing Partner of PriceWaterhouseCoopers (PNG)

Previous appointments have included:

• Chairman, Bougainville Economic Development Task Force
• President, Australia Papua New Guinea Business Council (PNG)
• Member, National Working Group on Removing Impediments to Business and Investment in PNG
• Secretary, PNG Chamber of Commerce and Industry

Mr. Leahy will also sit on the Bougainville Copper Limited Audit Committee

Appointed director of Bougainville Copper Limited February, 2007

Ian J Williams

Holds a Degree in Electrical Engineering and is a Fellow at the Australasian Institute of Mining and Metallurgy as well as the Australian Institute of Engineers.

He is currently the Chair of the Port Hedland Port Authority, a Director of Breadrill Limited and is assisting the West Australian Government in the facilitation of a major new port and rail infrastructure project in the state's mid-west region. In addition he also an independant director on three Aboriginal Benefits Trusts.

Mr. Williams brings a wealth of mining and processing experience to the Board of Bougainville Copper Limited, including open cut and underground mining operations, brownfield expansions and new major mining projects.

Appointed director of Bougainville Copper Limited at the Annual General Meeting; May, 2008