MAC: Mines and Communities

More deaths around Freeport's notorious Grasberg mine

Published by MAC on 2013-01-28
Source: West Papua Media, Jakarta Post, Straight Times

... and more to come?

Ex Freeport worker murdered, mutilated in Timika OTK killing

by West Papua Media

23 January 2013

Papuan civilians around Timika have again been made wary of military provocations that may potentially revive a bloody horizontal conflict, after a former Freeport mine worker's mutilated body was found in a roadside trench on January 19.

Villagers from Kwamki Narama, just outside Timika, found the badly mutilated body of Hanok Rumansara, 40, from Biak, in a roadside ditch in front of the village. The autopsy on his body found Rumansara was riddled with over 23 stab wounds, plus a number of injuries cause by blunt objects, according to his human rights observers.

A human rights worker with Komnas Ham, going by the pseudonym Kobewas Kores, posted information on social media that Rumansara had been picked up by a motorcycle taxi (ojek) rider to take him to Kwamki Narama. Whilst on the road, a group of unknown persons (orang tak kenal or OTK) set up a road block, and was not seen again until his body was found, according to witnesses interviewed by human rights workers.

Indonesian police have claimed that though there is little information to work on, they are pursuing the culprits, according to citizen media website Police have also claimed they have interviewed several witnesses and have secured arrows, bow, an axe and wood. However, Indonesian police have rarely showed a willingness to properly investigate OTK cases, which most credible observers in Papua laying the blame squarely on Indonesian special forces from either Kopassus or Densus 88.

A former worker at the contentious Freeport-McMoRan run giant Grasberg gold and Copper mine, Rumansara had reportedly been active in the ongoing Freeport industrial dispute, according to initial information. It is unclear why Rumansara had lost his job at the mine, but he was amongst hundreds of workers who failed to regain their jobs after the record-breaking seven month strike ended in December 2011.

Many Papuan ex-Freeport workers have been reportedly stranded from their home regions after not receiving any or enough severance pay from the management of the most lucrative gold mine on the planet. West Papua Media has no information at this stage to indicate that he was targeted in relation to his involvement at Freeport, or in the strike. If this were the case, it would represent a major escalation that would backfire significantly on the perpetrators, given the high political organisation of Freeport workers who are already tense given the recent gassing deaths of several workers.

However, Local human rights observers have questioned if the latest OTK killing - the first since community-led peace building put an end to a bloody military-fostered inter-tribal war from 20 May to 5 October 2012 - was a deliberate act of provocation to upset the current fragile peace. The 2012 horizontal conflict claimed over 2o lives in numerous OTK killings, as well as direct tribal violence, while police and Indonesian military conducted operations deliberately designed to incite violence.

'Kobewas Kores' believes that indeed there was an OTK killing, but they got their targeting wrong and killed a man from another part of Papua.

"Is it possible that the killing was deliberately done to give birth to a conflict breaking out in Kwamki Narama village? I think the scenario actually missed the target of an indigenous person to Kwamki Narama. In this case there are specially trained parties, the Indonesian military is trying to sow confusion in Timika and Papua in general," Kobewas said.

Toxic gas kills miner

The Jakarta Post

22 January 2013

JAYAPURA: A worker for a contractor of copper and gold producer PT Freeport Indonesia (FI) died on Saturday after inhaling allegedly poisonous gas. Three others were treated at Tembagapura Hospital in Mimika.

"The accident took place underground at PT FI's working area in Cross Cut 25 Amole," Sr. Comr. I Gede Sumerta Jaya of Papua Provincial Police told The Jakarta Post on Sunday.

The dead man was named as Donny Asmond. Awa Mardiana, Heri Purwanto and Pahma were still being treated at the hospital.

PT FI spokesman Ramdani Sirait said that there had been a drop in the oxygen level in the mine. The company is seeking the cause of the problem to prevent recurrence of problem.

Political, Shareholder Woes Trip Up Mining Giant in Indonesia

John Mcbeth

Straits Times

15 January 2013

Freeport-McMoRan Copper & Gold has been scrambling to reassure investors that its controversial diversification into oil and gas does not mean it is facing problems extending its four-decade-long control over Papua province's hugely profitable Grasberg copper and gold mine.

"Resource nationalism is always a concern when we operate in the countries we do," chief executive and president Richard Adkerson said in a conference call last month.

"But there is no development in Indonesia or Africa that is driving us to do this."

The world's fifth biggest mining company is battling political headwinds ahead of Indonesia's 2014 elections in efforts to negotiate a 20-year extension to its contract of work, which expires in 2021.

Freeport claims it is entitled to two 10-year extensions under wording in the existing 1991 contract. But the Indonesian government is insisting that it conforms with the 2009 Mining Law by converting the contract to a business license, which does not carry the same degree of certainty.

Adding to that uncertainty, the constitutional court is hearing a challenge to the mining law by the same nationalist lobby which recently won a decision forcing Jakarta to restructure how it regulates the oil and gas industry.

Freeport has to get things settled before it dives much deeper into a US$16 billion program which will convert the Grasberg from a vast open pit into the world's biggest underground operation, with electric rail and 900 km of tunnel.

The company is already in negotiations with the government, but given the political atmosphere, it is unlikely to reach any deal until after the 2014 elections - and then with an entirely different set of ministers.

Adkerson has sought to sweeten the pot by offering to list subsidiary Freeport Indonesia on the Indonesia Stock Exchange, correctly noting that it might help to put the company in a more positive light.

The contract extension aside, the Grasberg mine has other problems. Freeport was forced to halt operations for the last three months of 2011 in the face of an unprecedented strike involving 8,000 of its workers.

With the labor agreement coming up for its biennial review in March, Freeport is now bracing itself for another round of union demands that could cause further disruptions in production.

A steady stream of foreign security experts have been advising on the best way to guard the mine, especially the 100 km road linking Grasberg to the lowland town of Timika which has been the target of frequent sniper attacks.

Because of its past association with the Suharto regime and environmental and human rights infractions, real, imagined and invented, Freeport has become the foreign company most Indonesians love to hate.

Now it is in trouble with its big shareholders as well. "This is one of the worst tele-conferences I've ever heard," snapped Evy Hambro, managing director of investment firm BlackRock, as executives sought to justify the planned acquisition of two oil exploration firms.

The uproar stems from an apparent conflict of interest in a $20 billion deal to buy McMoRan Exploration and Plains Exploration and Development, which will cost the Arizona-based mining giant about two-thirds of its market cap.

Because of the way it is structured, the deal did not need shareholder approval, an issue that infuriated BlackRock and other investors given management's financial interest in McMoRan Exploration and a 17 percent drop in the value of Freeport's stock.

McMoRan's shares plunged 35 percent last November because of problematic flow tests at its deepwater Davy Jones site in the Gulf of Mexico, which it claims has the potential of being the biggest oil discovery in a decade.

Adkerson, who is also co-chairman of McMoRan, talked about the "complexities" resulting from overlapping management, with six directors holding dual board membership in the two companies.

In essence, Freeport is going back to its roots. Co-founded by geologist James "Jim Bob" Moffett in 1969, McMoRan Oil merged with Freeport Minerals in 1981 and later sold off its oil and gas assets to help fund the development of the Grasberg mine.

New Orleans-based McMoRan was spun off in 1994, but the company continued to be run by the hard-charging Moffett, the concurrent chairman at Freeport and the guiding force behind the latest move.

Recounting the company's history of risk-taking in remote Papua, which stretches back to the late 1960s, Moffett basically asked shareholders to trust him. "We know how to swing for the fences," he rasped.

"We're home-run hitters."

Described by Adkerson as the firm's "cornerstone asset", and by Moffett as "the best mine in the world", the high-altitude Grasberg mine contributes to 31 percent of Freeport's revenues - even if the strike did make 2012 an exceptionally bad year.

But that dependency is expected to drop to 23 percent as a result of a deal that Adkerson calls an "add-on and not a diversion", with 74 percent of future revenues expected to come from mining and 26 percent from what he says will be self-funding oil and gas operations.

The acquisitions create a resource conglomerate worth $60 billion, inclusive of debt, and mark a major shift in strategy for a company which used its Grasberg riches to gobble up Phelps Dodge, a firm much bigger than itself, in 2007.

With 10 operating mines in North and South America and Africa, the world's biggest copper producer and fifth biggest miner has been looking for opportunities outside its core business, worried about the lack of new world-class copper deposits.

Their eye firmly on the short term, many shareholders are clearly not convinced that getting back into oil and gas is the way to go.

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