MAC: Mines and Communities

Exposing Freeport's shame

Published by MAC on 2009-06-08

This Thursday, June 11th 2009, Freeport of the US - the world's biggest non-state owned copper miner, will hold its annual general meeting.

As pointed out in a previous Mac posting - and more recently by Indonesia's leading English language daily, The Jakarta Post - a group of US investors will present a modest resolution at that meeting, urging the appointment of an environmental expert to the company's board.

This is as a result of the extreme devastation and pollution caused by Freeport-Rio Tinto's combined operations in West Papua

But the move is vigorously opposed by Freeport. See:

Last month, we gained another insight into Freeport's flagrant dereliction of its environmental and social duties. This time those affected are the Tohono O'odham tribal nation in Arizona, whose lands have been contaminated by a Freeport subsidiary which, according to the tribe, "destroyed the area's natural resources in the process".

A settlement of damages has now been proposed to the Tohono O'odham nation by the company.

However, just before this, Freeport made a grant to a Colorado college campus, described by Richard Adkerson, the company's president and CEO, as confirming "our commitment to support a new environmental leadership and outdoor recreation center".

The funds awarded to the college came to US$1 million.

The amount the company says it will pay the Tohon O'odham nation is considerably less than this, at just US$850,000. Nor does Freeport admit any liability.

The disjunction between Freeport's paper "policies" and its parlous practices on the ground verge on the extreme.

Some years ago,the company appointed a leading US judge, Ms. MacDonald, to monitor its human rights observance. Although her work for the UN War Crimes tribunal in the Balkans has been applauded, Ms MacDonald seems oblivious to Freeport's continued human rights abuses and its appalling environmental record.

Equally bad - if not worse - is that Richard Adkerson, the man behind this corporate wheel, is also the chairman of the International Council on Mining and Metals (ICMM) - the body set up to "green" mining and make its operations more sustainable.

Could there be a more incongruous example of an industry purportedly "policing" itself, while under the aegis of someone whose core business is outside the law?

[Comment by Nostromo Research, 8 May 2009]

Freeport Investors Voice Environmental Fears Over Goldmine

By Jonathan Wootliff

The Jakarta Post

2nd June 2009
One of the world's largest gold, silver and copper mines can be found deep in the heart of one of Indonesia's most remote landscapes. Located in the isolated highland area of West Papua close to Puncak Jaya, the highest mountain in the province, the multibillion-dollar Grasberg mine has more than 8,000 employees and is a major contributor to the economy.
Producing more than a quarter of a million tons of ore each day, the crater-like open pit mine measures nearly 2 kilometers across its surface on a site close to 10,000 hectares in size. But the financial value of this massive operation, which represents an estimated 2 percent of Indonesia's entire gross domestic product, appears to come with a large environmental price tag.
Every day, hundreds of thousands of tons of slimy residue finds its way into the nearby Aikwa River and Arafura Sea, causing alarm among naturalists keen to preserve one of the world's last untouched jungle landscapes. They contest that the soot-colored acidic waste, comprising an acidic runoff, poses a serious threat to the biodiversity of this environmentally sensitive area.

Its majority owners, the giant US Freeport-McMoRan mining company, say that the discharges meet regulatory requirements.

The Grasberg mine is close to rare equatorial mountain glaciers that serve as indicators of climate change in the region. Steepening of slopes related to mining activities, as well as earthquakes and frequent heavy rainfall, has resulted in deadly landslides.
While the company has introduced various environmental protection programs and reclamation projects to mitigate possible damage, conservation groups are becoming increasingly concerned about the potential for copper contamination and acid rock drainage into the extensive surrounding river systems. Freeport argues that its actions meet industry standards and have been approved by the requisite authorities.
But their defense has not succeeded in placating a coalition of some of the world's biggest pension fund investors from Europe and the United States, which is campaigning to persuade the company to clean up its controversial pollution record by appointing an environmental expert to its board.
From the other side of the globe, such reputable institutional investors as the New York City pension funds have joined forces with such reputable investors as the Dutch ABP pension fund for civil servants, the Swedish government pension funds and the General Board of Pension and Health Benefits of the United Methodist Church in the US to put the proposal on the ballot at Freeport's annual general meeting, due to be held next week in Wilmington, Delaware.
The investors are going head-to-head with Freeport's board of directors, which has unanimously recommended that shareholders oppose the motion. But the company's environmental record has been a regular target of institutional investor discontent. In 2006, the huge Norwegian Government Pension Fund blacklisted the company over its disposal of waste residue into the local riverine system.
Investors contest Grasberg's waste management practices are illegal in many other countries where Freeport operates. Earlier this year, the Norwegian fund also withdrew more than $600 million in investments from Rio Tinto, the London-listed international mining group, because of a joint venture with Freeport at the Grasberg mine. It is worth noting that the Indonesian government is a major shareholder in this enterprise.
In the latest campaign, the Freeport investors say the company has been slow to issue what they consider to be full information on its assessment and monitoring of the environmental and health risks associated with the residue disposal at Grasberg. The funds say this is damaging to their interests as shareholders because of risks that the company's environmental performance falls short of internationally accepted standards leading to difficulties in accessing capital for new projects and obtaining necessary regulatory licenses. Grasberg is no stranger to controversy, having been the target of significant criticism for its questionable human rights issues, which it has since resolved.
"We believe it could be highly beneficial for the company to address the environment at the most strategic level in the same way that it has addressed human rights - in other words, to appoint an appropriate specialist to the board," states the coalition of institutional investors.
Taking on the role of environmental activists, the consortium of concerned investors says, "We envisage a board director whose background combines acknowledged environmental commitment and expertise with leadership experience in a business or other appropriate context. This appointment would place Freeport at the forefront of board-level practice on environmental and social issues in the mining industry."
The investors hope to mirror the success of a 2005 campaign led by institutions including the New York City pension funds that was critical of Freeport's human rights practices and links with the Indonesian military. As a consequence of that shareholder campaign, Freeport commissioned independent audits of Grasberg and appointed an eminent judge as a director and special counsel on human rights.
Freeport appears to have responded positively and transparently on human rights. Now it's time for this world-leading mining corporation to address these serious environmental concerns.
Conservationists have the right to be worried about Grasberg's potential threats to nature. The company must convene more discussions with environmental NGOs and local communities in a bid to allay their fears. And if Freeport is to protect its reputation and prove its credentials as a responsible company, it must surely meet what appears to be a quite reasonable demand of some of its key investors.
Jonathan Wootliff is an independent sustainable development consultant specializing in the building of productive relationships between companies and NGOs. He can be contacted at;

Hazardous-waste lawsuit nears settlement

Arizona Daily Star

28th May 2009

A subsidiary of Freeport McMoRan Copper & Gold has agreed to pay $825,000 to settle a federal lawsuit citing the company for release of hazardous substances at a mining site about 32 miles southwest of Casa Grande. The lawsuit by the U.S. Department of the Interior and the Tohono O'odham Nation was filed against the Cyprus Tohono Corp. with the proposed settlement on Tuesday in U.S. District Court in Tucson.

A spokesman for Freeport-McMoRan declined to comment beyond the consent decree filed Tuesday. The company did not admit any liability as part of the settlement, which will fund restoration projects. The Cyprus Tohono Mine is a Superfund site on land leased from the Tohono O'odham Nation by Cyprus Tohono Corp. Copper mining on the site began in the 1880s and continues today. Cyprus Tohono Corp. began mining there in 1987.

The settlement will be subject to public comment for 30 days and reviewed by the U.S. Justice Department before going to a judge for final approval.

In 2006, the Environmental Protection Agency announced that it had reached an agreement with Cyprus Tohono Corp. requiring the company to clean up a portion of the mine site, near the community of North Komelik.

The EPA said at the time that it had found high levels of sulfate and uranium in the area. It said contamination from evaporation ponds and mill tailings were believed to have contributed to groundwater contamination of an aquifer that was previously the sole source of drinking water for North Komelik.

Tribe sues Freeport MacMoRan over copper mine

By Adam Klawonn •

27th May 2009

NEAR CASA GRANDE - The Tohono O'odham Nation claims an international mining company released hazardous substances during its search for copper on tribal lands, destroying the area's natural resources in the process.

The tribe's complaint involves Cyprus Tohono Corporation, a subsidiary of Freeport MacMoRan. Its members want relief for mining activities that allegedly occurred 32 miles southwest of Casa Grande on land the tribe leased to Cyprus Tohono for copper-mining purposes.

According to the complaint, mining operations have dug around the area off and on since the 1880s. In 1987, Cyprus Tohono started mining at the site, the complaint states.

The tribe claims hazardous substances such as sulfuric acid have been released, damaging the surrounding ecosystem. An investigation by the U.S. Environmental Protection Agency is ongoing, the complaint states.

The suit was brought on the tribe's behalf by Jonathan L. Jantzen (Office of the Attorney general, Tohono O'odham Nation) and Sue A. Klein, assistant U.S. Attorney in Phoenix under Diane Humetewa. Humetewa, a member of the Hopi tribe, was tapped by former President George W. Bush to lead the U.S. Attorney's Office in Arizona. She has promised to focus more on issues affecting American Indians during her tenure.

To download a copy of the complaint, click here:

Owner of Climax mine gives Leadville CMC campus $1 million for building

26th May 2009

A $1 million grant was recently awarded toward the new $2.3 million Timberline Campus building project at Colorado Mountain College in Leadville by Freeport-McMoRan Copper & Gold Foundation.

The building will be named Climax Molybdenum Leadership Center.

Alexandra Yajko, chief executive officer of the CMC Foundation, said, "Our students will enjoy an enhanced learning experience, and the community can use meeting spaces for training and staff development."

The 14,900-square-foot building will primarily house campus outdoor programs. In addition to office space, it will accommodate two large community and meeting rooms, a gymnasium with a full-size basketball and volleyball court, a 25-foot climbing wall and a workout center for students.

It will provide space to store boats, skis and other gear for outdoor programs.

"We are excited to finally have these amenities to offer our students," Mike Simon, Timberline Campus CEO, said.

"The outdoor program has been without a home two years," Sam Skramstrad, director of facilities for the college, said.

The program earlier was housed in a building which has since been demolished,

College administrators said the building will enable larger events in Lake County. Spaces within the center will be suitable for corporate development and training.

Contractor will be Diesslin Structures of Salida who will work with local contractors to construct the center.

"We are pleased to announce our commitment to support a new environmental leadership and outdoor recreation center at Timberline Campus of Colorado Mountain College," Richard Adkerson, president and CEO of Freeport-McMoRan Copper & Gold, said.

He said the center will benefit the college, students and community by offering new learning and meeting space, classes and programs enhancing stewardship and resources of the area and support economic development.

Yajko said, "We are so grateful to Freeport McMoRan Copper & Gold for supporting our students and community by helping us construct the building."

It was the second donation to the community this year from the Freeport-McMoRan Foundation. Earlier the foundation presented $150,000 to the Lake County Community Park project.

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