MAC: Mines and Communities

Freeport told to clean up copper mine

Published by MAC on 2006-02-14

Freeport told to clean up copper mine

by Shawn Donnan in Jakarta, Financial Times

14th February 2006

Indonesia’s environment minister yesterday threatened to bring legal action against Freeport McMoRan if the US copper and gold producer did not improve practices at its Grasberg mine.

Freeport has faced criticism from human rights and environmental groups over its practices at the Grasberg mine in Indonesia’s remote and conflict-torn Papua province.

The company has come under pressure from campaigners, shareholders and politicians in Indonesia and the US in recent months over allegations that it made millions of dollars in payments to officers in the Indonesian military, which it pays to provide security at the mine.

The threat of legal action made yesterday by Rachmat Witoelar escalates that pressure. It also raises the possibility that Freeport could become embroiled in the sort of protracted legal and environmental battle with Jakarta that Newmont, another US gold miner, has endured since 2004.

Mr Witoelar’s environment ministry was behind a $135m civil suit filed against Newmont last year that was dismissed. One of Newmont’s top executives in Indonesia also has been on trial for months on criminal charges of pollution near its Minahasa Raya mine in Sulawesi.

The minister said he took a December New York Times report alleging environmental damage at the Grasberg mine as a “preliminary indication” that mining waste ­ or tailings ­ from Freeport was causing pollution.

An investigative team from his ministry arrived at the Freeport site on Friday, Mr Witoelar said. It would conduct tests on Freeport’s tailings, the river water into which they are dumped and air quality around the mine.

Mr Witoelar said the company was co-operating with the team, which was allowed to visit the mine as a result of a Freeport decision last year to join a corporate monitoring programme overseen by his ministry.

The minister said he wanted to see Freeport improve its environmental practices at the mine and examine alternatives to its controversial “riverine” tailings disposal system.

“We have to work together. They are investing in our country and I want them to keep investing here. But I don’t want them to break the law,” he said. “If there is such a thing as environmentally-friendly mining practice then I want them to do that. It can be done.”

Freeport executives in the US could not be reached for comment last night. But, in the past, Freeport has strenuously denied that its tailings system causes any environmental damage.

“In operating a large mine, environmental impacts unavoidably occur. We manage our impacts responsibly,” Richard Adkerson, chief executive, wrote in a letter last month responding to the New York Times report. Additional reporting by Taufan Hidayat

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