MAC: Mines and Communities

Minewatch Asia Pacific Report, July 1999

Published by MAC on 2001-05-01

Minewatch Asia Pacific Report, July 1999

Kaltim Prima: a case study of the operations and impacts of Kaltim Prima Coal (KPC) in East Kalimantan, Indonesia

A changing climate?

Coal isn't good news for most environmentalists: its burning contribution to the "greenhouse effect" and acid rain generation is considered unacceptable - to the point that some NGO's (non-governmental organisations) have called for a global ban on coal mining, while at least one British high street bank (the Cooperative) refuses to accept investment from - or into - coal production companies, on "ethical" grounds.

But a planet expunged of coal (the most widely used fossil fuel in the world) would be one of abject poverty for millions of workers and their families who are dependent on the industry (collieries employ by far the largest workforces of any mines). Industrial output (including the production of items which meet human need, rather than satisfy vanity) would plummet across the globe. Some northern NGO's concerned about "climate change" seem oblivious to the consequences of their comfortable armchair calls against coal, made solely on environmental grounds. Unwittingly they may have contributed to pressures within the industry to concentrate on mining low-sulphur, high calorific, "hard" coals (as opposed to lignite or brown coal) - without, at the same time, evaluating the social or political consequences of the corporate penetration of new regions, notably Indigenous territory in Indonesia, Colombia and the US mid- and south- west. This myopia masks the reality of the rise of a set of powerful multinational enterprises - Rio Tinto, Glencore, Anglo American, and BHP among them - which are undertaking huge coal expansions in the service of over-developed, rather than impoverished nations. It also ignores the fact that it is these companies - at least as much as governments and Peoples in the South - who, with relative impunity, are implicated in deleterious global climate changes.

It is in this context especially that Rio Tinto's operation (along with 50% partner British Petroleum - or BP) of the Kaltim Prima coal mine in East Kalimantan becomes a case study with international ramifications: a project which more than doubled its design output within a few years, is now among the world's top ten coal exporters, but where management appears to be resisting mandatory "Indonesianisation" and where many of the local, original, inhabitants, of the vast open-cast site barely live above subsistence level. By marketing so-called "enviro coal", and subsidising a national park, the Kaltim Prima partners draw a sophisticated veil over their exploitation of Indonesian workers, their seizure of local land, and their use of one of the country's prime natural resources - primarily to supply rich overseas markets and leverage profits for their overseas shareholders.

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