MAC/20: Mines and Communities

Grasberg will remain open: Indonesian President

Published by MAC on 2006-04-18

Grasberg will remain open: Indonesian President

PNGIndustryNews.Net

18th April 2006

INDONESIAN President Susilo Bambang Yudhoyono said Monday his government would never cave in to demands from protestors to close the massive US-owned Grasberg copper-gold mine in the province of Papua.

His comments came weeks after violent attacks targeting Freeport McMoran's office in Jakarta as well as protests in the Papuan capital of Jayapura that claimed the lives of five Indonesian police and military personnel.

"We will try to solve this (the Freeport) case as well as possible so that nobody is hurt," he said in Jakarta on Monday, according to Associated Press.

Indonesia's department of environment is currently investigating the mine for allegedly polluting a nearby river system due to the large volumes of tailings emitted from the mine's operations.

"But if we unilaterally close down Grasberg, we'll be taken to the antitrust court where we'll certainly lose and we'll have to pay billions of dollars (in legal damages)," Yudhoyono said.

Protestors have previously claimed the $US1 billion ($A1.35 billion) in taxes payed by Freeport to Indonesian Government every year is not being redistributed properly to those living in the area affected by the mine's operation.

Last month, a landslide near the open pit at Grasberg slammed into a service facility for the mine's workers, killing three people.

The Grasberg mine has reserves of around 40.5 billion pounds of copper (and 46.5 million ounces of gold), and has produced 16.6Blb of copper and 22.9Moz of gold since discovery in 1988. The Grasberg open pit has around 10 years of life, with the majority of reserves remaining as an underground resource.

New Orleans-based Freeport recently reported full-year net income of $934.6 million, compared with $156.8 million in 2004.

Freeport's share of 2005 sales totalled 1.46Blb of copper and a record 2.8Moz of gold.

The world's largest miner, Rio Tinto, holds a 40% stake in Grasberg.

http://www.pngindustrynews.net/StoryView.asp?StoryID=57314

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