MAC: Mines and Communities

World Bank Must Stop Plan to Finance the Second Largest Indonesian Nickel Mine

Published by MAC on 2010-03-10
Source: JATAM, WALHI, KIARA, ICEL & KAU (2010-03-02)

Indonesian NGOs speak out against World Bank-backed project

World Bank Must Stop the Plan to Finance the Second Largest Indonesia Nickel Mine

JATAM, WALHI, KIARA, ICEL & KAU Press Release

2 March 2010

Jakarta -  On 1-10 March 2010, a Multilateral Investment Guarantee Agency (MIGA) team of the World Bank visited Indonesia for feasibility study.

They planned to give a political risks assurance for the second biggest nickel company in Indonesia, PT Weda Bay Nickel. The company will dump million tones of its tailing to the unique Weda Bay. Around 21% of the company mining areas is within protected forest areas, including Lalobata National Park and Aketajawe, and they were planning to cut off 35,155 hectares of protected forest.

PT Weda Bay Nickel was one of the Indonesian authority lobbyists seeking for amendment of Regulation No. 41 year 1999 on Forestry which prohibited open mining in a protected forest. The company has signed a Contract of Work on February 19, 1998, with a concession area of 120 thousand hectares in Central Halmahera and East Halmahera in the North Maluku  Province. Around 56.5% of the company shares were owned by Strand Mineral Pte, Ltd (Eramet France), 33.4% of it belongs to Mitsubishi and the remaining 10% was owned by PT Antam. The mining and processing was supported by the world financing institute such as MIGA and JBIC.

Every year the company mines 17 million tons of rocks, processes 5 million of ores to produce 60 thousand tons of Nickel and 4 thousand tons of cobalt. They treat the waste with the most dangerous and out of dated system - heap leaching, by dumping sulphuric acid solutions on the heap of nickel ores. The company would develop a sulphuric acid factory which would consume 1 million tones of sulphuric acid every year.

What made it more dangerous was that, the mine which greedily consume land, water and energy would dump its tailing to the Weda Bay. This portion would definitely exacerbate the Weda Bay as an ecosystem that serve as local people livelihood.

The collaboration of MIGA, the World Bank, Eramet, Mitsubishi and Antam would create a lethal threat for those who live in the island of Halmahera, North Maluku.

For ten days, Frank Lysy (Director and chief Economist), Paul Barbour (Senior Risk Officer), Judith Pearce (lead operation Officer), Deniz Baharoglu (sector leader), were visiting Indonesia to conduct a feasibility study for political risk guarantee to the development of the mine. MIGA's political risk guarantee would be the guarantee for those financing institutions which grant their credit for PT Weda Bay Nickel.

We were strongly against MIGA's involvement in assuring and financing supports for dirty and environmental devastating projects, such as the one planned by PT Weda Bay Nickel.

We against all involvement from multilateral financing institute in financing and providing guarantee for extractive industrial  projects in Indonesia. MIGA and the World Bank should cancel their plan to give political risk guarantee for this dangerous project. Not only because mining created threats for the safety of the people and the ecosystem on the island of Halmahera; but also because one of its shareholders - PT Antam was notorious and had bad records for both environmental damage and human rights violence.

PT Antam, was the owner of the nickel mine in the island of Gebe, Central Halmahera, which started its operation 25 years ago and closed on 2004. The company had left not only an incredible environmental damage, but also devastation on the economic of the people of Gebe Island who mostly lived as farmers or fishers. On 23-27 February 2010, the local people and students conducted a peaceful act demanding PT Antam to responsibly close the mine. But this act was countered with violence and shooting by Brimob police unit of Central Halmahera.

On January - February 2004, PT Nusa Halmahera Mineral - the mining operator of PT Antam and Newcrest/Australia in Halmahera had cut off the Toguraci protected forest. This act was protested by the locals and ended up in an act of violence. One man died after hit by a bullet from the Brimob, hundreds was arrested, and in the end 7 people kept arrested without any lawful procedures. The shooting case has never been properly handled from either the government or the Indonesian Police Force.

We are raising a call for action to demand the cancellation of the project and the granting of financial support and political risk guarantee from MIGA the World Bank, or any other financing institute.

Media Contact:
Siti Maemunah, Jaringan Advokasi Tambang (JATAM), hp 08159480246
Berry Nahdian Furqon, Wahana Lingkungan Hidup  Indonesia (WALHI/ FoE
Indonesia), hp 08125110979
Riza Damanik, Fisheries Justice Coalition (KIARA), hp 0818773515
Dani Setiawan, Anti Debt Coalition (KAU), 08129671744


Support the petition to save the Halmahera Island people & ecosystem

Reject World Bank funding of the PT Weda Bay Nickel project

Action Alert: March 2-10, 2010

Ecological nightmare is associated with a planned nickel and cobalt mine
on Halmahera Island in Indonesia. Twenty-one per cent of Weda Bay Nickel's
mining area is actually part of Indonesia's protected area system and
includes the Lalobata and Aketajawe National Park. The mine will destroy
35,155 ha of protected forest. Approximately 17 million tons of rock will
be dug each year from this small and fragile island rich in biodiversity.
Export of the nickel and cobalt from this mine is expected to reach 65,000
tons each year. The mine plans to dump their waste into Weda Bay. The mine
plans to use sulfuric acid heap leaching to extract the nickel from the
ore.

We reject the role of the World Bank (through MIGA) and financial
institutions everywhere that provide insurance and funds to dangerous
projects such as the PT Weda Bay Nickel mine.

Support the Halmahera people and ecosystem by reading and signing on to
the letter below before March 10, 2010. Sign the letter by sending an
email with your full name, organization and country to luluk@jatam.org
The letter will be sent to the World Bank and associated parties.

Indonesian version found here: http://www.jatam.org/content/view/1208/1/

Regard,
JATAM, WALHI, KIARA & KAU

--

March 10, 2010

To MIGA/World Bank:

Reject World Bank funding of the PT Weda Bay Nickel project

Halmahera Island is a unique island rich in biological diversity. Today, this island is experiencing unprecedented rates of destruction brought on by the mining industry. All the main bays found on this island have and will become sites of waste disposal for large-scale gold and nickel mining operations.

This destruction will only intensify with the presence of the PT Weda Bay Nickel mine in the centre of Halmahera Island. From March 1-10, 2010, the Multilateral Investment Guarantee Agency (MIGA) of the World Bank will conduct a feasilbility assessment of this mine in order to determine whether it should provide political risk insurance for construction of this mine, which would be the second largest nickel mine in Indonesia. PT Weda Bay Nickel is owned by the France-based company, Eramet (56.5%), Mitsubishi (33.4%) and PT Aneka Tambang (Antam) (10%). About 21% of the proposed mine area is located in protected areas including nature and wildlife reserves of the Lalobata and Aketajawe National Park. Mine plans include clearcutting 35,155 ha of protected forest for the mine.

This mine is very dangerous, besides adversely impacting land and water and consuming larges amounts of energy, the mine plans to dump their tailings into Weda Bay, thereby threatening the existence of the entire island of Halmahera, North Maluku. Every year, the company will dig 17 millions of rock and treat 5 million tons of ore to produce 60,000 tons of nickel and 4,000 tons of cobalt. PT Weda Bay Nickel plans to use the controversial sulfuric acid heap leaching process, and develop a sulfuric acid plant that will need 1 million tons of sulfur each year.

Considering the facts mentioned above:

1. We reject the involvement of the World Bank's Multilateral Investment Guarnatee Agency (MIGA) in providing insurance and funds to dirty projects that destroy local environments, like the PT Weda Bay Nickel project. We demand an end to the feasibilty assessment and cancellation of plans to provide political risk insurance to this dangerous project.
2. We reject all involvement of multilaternal funding institutions in funding and insuring extractive industries in Indonesia.
3. We call on the Government of Indonesia to cancel all contracts with PT Weda Bay Nickel as it will destroy the local economy of Halmahera residents.
4. We call on the Government of Indonesia to ensure the rights of Indonesians to live in a safe and healthy environment (Rights on the Environment as a citizen Constitutional Right - 28H UUD '45)
5. We reject this project because it compromises Indonesia's commitments to reduce greenhouse gas emissions by 26% by the year 2020. This project is fossil fuel intensive and will compromise the forest resources found in the Lalobata and Aketajawe protected area, an area of 35,155 ha.
6. In the name of the law and state constitution, we demand that the country protect the rights of citizens of this country by securing all forms of protest and rejecting the PT Weda Bay Nickel project.

Respectfully yours,

Signatures,

1. Siti Maemunah, Jaringan Advokasi Tambang (JATAM), Indonesia
2. Berry Nahdian Furqon, Wahana Lingkungan Hidup Indonesia (WALHI),
Indonesia
3. Rhino Subagyo, Indonesian Center for Environmental Law (ICEL),
Indonesia
4. Riza Damanik, Koalisi Rakyat Untuk Keadilan Perikanan (KIARA),
Indonesia
5. Dani Setiawan, Koalisi Anti Utang (KAU), Indonesia

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