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JAKARTA, Indonesia (February 22, 2000 - Indonesian Observer/Kabar Irian)---As the government prepares to evaluate PT Freeport Indonesia’s Contract of Work, the giant gold and copper mining company has pointed out that 5,000 people of Irian Jaya/West Papua are still on company scholarships, some at the university level.

The scholarship program is part of the company’s commitment to developing local human resources. Students on the scholarships are studying either in West Papua, Java or abroad.

Critics say Freeport employs too few Irianese. Freeport officials agree, but say local education standards are often too low. Until a few decades ago, most Irianese were still living in the Stone Age and some still are; hence the scholarship program.

Freeport contributes 1% of its gross revenues that means -- about US$ 16.5 million in 1999 -- to a fund to help people from seven local ethnic groups. Many Irianese say this is too little.

The mining company produces gold and copper concentrate. After smelting, the refined metal is worth an estimated US$ 2 billion a year. The 1999 revenues of the mine operator’s parent, New Orleans-based Freeport McMoRan Copper & Gold, Inc., had been forecast at US$ 1.6 billion.

Freeport started giving 1% of its profits to locals in 1996 after widespread protests that the company was exploiting the land and giving its traditional owners nothing in return except displacement, misery and repression from the Indonesian military.

The 1% fund is administered by the Development Institution for the Irian Jaya Community (LPMI).

LPMI head T.O. Potereyauw yesterday stressed that the company is committed to improving the education of locals, and it hopes that some of them will elect to work at the mine.

In 1996 and 1997, the 1% of revenue, then amounting to about Rp 41.1 billion (then worth US$ 17 million) each year, was handled by an institution called the Timika Comprehensive Development Body (PWT).

Due to apparent mismanagement of the fund and the failure to provide detailed reports on how the money was spent, then-Irian Jaya governor Bass Suebu in 1998 dissolved the institution headed by H. Makbon, and founded LPMI.

LPMI head Potereyauw is the regent of Mimika, the main area where Freeport operates in West Papua.

Aside from the 1% of revenue, West Papua province also receives annual royalties of between Rp 300 billion (US$ 41 million) and Rp 400 billion (US$ 55 million).

Mimika receives most of the royalties, getting Rp 120 billion (US$ 16.4 million) from last year’s earnings.

Freeport is also allocating a fund of US$ 100 million that will be used by the local government for rehabilitation projects on exhausted mining sites.

Freeport’s Grasberg open-cast mine, at an elevation of just over 4,000 meters (13,200 feet) above sea level, will be two kilometers (1.2 miles) across by the end of its working life.

That will be around 2015, but there will still be lots more ore in the area after that.

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