MAC: Mines and Communities

Buried Treasure

Published by MAC on 2005-10-22
Source: Hong Kong Standard's ()


Buried Treasure

Hong Kong Standard's Weekend Magazine

October 22, 2005

While provincial authorities in Indonesia have issued a prospector's license for the Lorentz to a British businessman, most large mining firms are bound by an international agreement to stay out of World Heritage sites

By John McBeth

Deep in the heart of the Lorentz National Park, a pristine World Heritage site on the southern flanks of the vast Indonesian province of Papua's Central Highlands, lies what geologists are convinced is a major copper and gold deposit. Some who have seen the aeromagnetic imaging and other telltale geological evidence of Mamoa call it the ``Son of Grasberg,'' a reference to American mining subsidiary Freeport Indonesia's massive nearby mine in the same mountain chain.

Grasberg is the most profitable gold mine in the world.

But right now, looking may be as much as anyone is going to do. Authorities in Indonesia's easternmost province have issued a prospector's license to Chris Williamson, a locally well-connected British businessman, exercising what they maintain is their right under Indonesia's 2001 Special Autonomy Law.

Meanwhile, most large mining firms with the means to exploit the Mamoa deposit are bound by an international agreement to stay out of World Heritage sites. Lying in the remote Hoea Valley, 45 kilometers southeast of the Grasberg mine, Mamoa's true size is unknown.

But it says a lot that geologists compare it to Grasberg, the world's largest gold mine and second
biggest copper deposit, discovered almost by chance in the late 1980s, just when the company was close to exhausting its initial Ertsberg deposit. So incredible is Grasberg that 2005 is shaping up to be the best year ever for its Louisiana-based parent company, Freeport McMo Ran Copper & Gold, and mine engineers have yet to find the bottom of the ore body.

The largest protected reserve in Southeast Asia, the 2.5 million hectare Lorentz was placed on the UNESCO heritage list in 1999.

It is the only park in the world to stretch from a rare equatorial glacier to a tropical marine environment, and its complex geology at the juncture of two continental plates contains fossil sites that provide evidence of the evolution of life in remote New Guinea.

UNESCO says Lorentz supports ``the highest level of biodiversity in the region.'' The Lorentz is also home to nine different tribal groups, including the Asmat - known world-wide for their wood-carving - who have inhabited the area for at least 5,000 years. For all that, when it was declared a ``strict nature reserve'' in 1978, the government actually forbade any human activity in the Lorentz other than for scientific research and education. That puzzling anomaly was finally rectified in 1997 when the World Wildlife Fund and regional forestry officials finally persuaded Jakarta to change its status to that of a national park, with acknowledged community resource rights.

Mining in national parks is a major issue among Indonesian environmental groups, angry over a July 7 Constitutional Court decision clearing the way for 13 mining companies with existing concessions to resume operations in protected forests. The court's nine judges voted unanimously to support a parliamentary amendment passed last year lifting a 1999 legislative ban on open pit mining in protected forests, saying it did not violate the Constitution. Because a Constitutional Court decision can't be contested, the ruling effectively put an end to NGO demands for the revocation of the 2004 measure.

Court president Jimly Asshidiqie's assertion that the ban would have a serious impact on the country's investment climate only fuelled outrage among environmentalists.

But businessmen point out that in many cases where mining was affected by the ban, the areas designated as protected forest have no tree cover at all. That's because in the mid-1990s, the Forestry Department arbitrarily expanded the boundaries of many of the country's reserves and national parks, without conducting surveys to determine exactly what was there.

When the Lorentz was being considered as a World Heritage site in the late 1990s, the government had to address UNESCO concerns over development projects that could affect the park, including a proposed highway running east from the boom town of Timika, Freeport's headquarters on the southern coast, and the possible expansion of mining activity in Freeport's neighboring exploration concession.

In October 1999, Indonesian authorities advised the World Heritage Committee of an adjustment to the boundaries of the park, excluding a 150,000hectare oil and gas concession already held by United States petroleum company Conoco in the southeast corner.

But the Forestry Department took no action at the time on a UNESCO suggestion that it put a ``keyhole'' around the Mamoa deposit to allow for its development, with a single river system set aside for tailings disposal.

Originally a nature reserve, the Lorentz has always been outside Freeport's exploration zone.

When it was converted into a national park with expanded boundaries, the company relinquished areas along the eastern fringe of its concession to avoid an overlap.

All the same, Freeport geologists, with access to aeromagnetic surveys and the results of surface prospecting, have a good idea of what is there. Sources close to the company say they are very excited by what they have seen.

So, too, apparently, were geologists working either directly or indirectly for London-based mining giant Anglo American, which has 22 operating gold mines in Africa, the US, South America and Australia.

They took 40 or 50 samples after being invited into the Hoea Valley earlier this year by Williamson, who lives in the provincial capital of Jayapura.

UNESCO was never told Williamson had been issued a prospector's license by the provincial government last November. Senior officials from Indonesia's Department of Mines and Energy complained recently to Papuan governor Jaap Solossa over the issue, but he says it is none of their business.

This is not the first time the governor has invoked the special autonomy law to justify his actions. One of the by-products of the dramatic decentralization process Indonesia has undergone over the past five years, officials have used the autonomy law to justify a range of actions.

Last April, the governor crossed swords with Forestry Minister MS Kaban over the rights of the provincial government to grant forest concessions.

Anglo American's head office may have been unaware its geologists were even in the park.

In any event, the company ordered them to leave after being reminded it was breaking an August 2003 International Council on Mining and Metals accord, in which 15 of the world's largest mining companies agreed not to explore in World Heritage sites.

Anglo American spokesman Kate Aindow would not discuss the company's relationship with Williamson. ``We do not comment on speculation, including any business relationships we may or may not have,'' she said.

There are few mining companies outside the top 15 with the resources to mount the kind of deep drilling program needed to confirm the Mamoa deposit. Even then, experts say it would take an investment of at least US$2 billion (HK$15.6 billion) to build the same road infrastructure and mill facilities Freeport constructed when it started mining in the 1970s.

There is also the question of who decides whether Papuan authorities should allow prospecting in a national park, which remains under the control of the central government.

Williamson reluctantly said in a brief telephone interview that he had been given the license ``to do a survey, that's all. Just a survey.''

He acknowledged that work in the park had stopped, but declined to confirm Anglo American's previous involvement.

``I can't talk to you. I don't really want to get involved in this.'' Asked if he could explain why the license was issued in the park in the first place, he replied: ``I'm not going to talk to you any further.''

Despite how environmentalists might feel about the impact of another mine in the Central Highlands, anthropologist Kalman Muller says there will be little opposition from the estimated 800 Amungme tribesmen who live in the Hoea Valley if it ever does become a reality. Says Muller, who has spent the best part of two decades in Papua and is the author of several fascinating books on the vast territory: ``You can't eat conservation.''

Muller's latest work is on the Amungme, a relatively small tribal group who were at the center of a cultural row back in the 1980s when then-president Suharto's wife mounted a campaign to make them wear shorts instead of their ubiquitous penis gourds.

Magnificent by any world yardstick, the Lorentz is one of four World Heritage nature sites in Indonesia. The others are the Komodo Maritime Park in the Nusa Tenggara island chain, the Tanjung Lesung rhinoceros reserve in western Java on the edge of the Indian Ocean and the three million hectare Sumatra Heritage Rainforest - a non-contiguous group of three separate parks.

A fourth site, the Betung Kerihun National Park along the West Kalimantan-Malaysian border, is still under consideration because of the presence of illegal loggers.

It is still unclear why the Mamoa deposit area was not excluded from the park at the time it was nominated for heritage status, but UNESCO officials say as the lead agency, the Forestry Department carried more weight than the Ministry of Mines and Energy.

It is not the first time this issue has surfaced in heritage site areas. Faced with a similar situation, the Australian government took a different tack.

Freeport's partner in the Grasberg venture, Rio Tinto, owns the Northern Territory's Ranger uranium mine, which was already in operation when the Kakadu National Park surrounding it was declared a World Heritage site in the mid-1980s.

Like the Ranger, Rio Tinto's nearby Jabiluka deposit and another discovery owned by French power provider Cogema were both specifically excluded from the confines of the park.

The only issue deterring plans to open Jabiluka is the opposition of indigenous landowners, who may have a change of heart when the Ranger runs out in seven years. Jabiluka and Cogema's Koongarra deposit form a big chunk of US$12 billion in uranium reserves in the Northern Territory, much of it in the middle of the Kakadu.

UNESCO officials say Mamoa can still be excluded from the Lorentz if the government can provide a compelling economic argument so it doesn't lose its World Heritage status in the process.

Environmental experts also point to the Forestry Department's obligation under World Heritage monitoring and management protocols to beef up its small national park staff, now based in far-off Jayapura.

There's also the much more sensitive issue of what a special autonomous region can or cannot do as Indonesia continues to wrestle with the process of decentralization.

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