JAKARTA MAY SUSPEND IRIAN JAYA FREEPORT MINE PRODUCTION

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By Tomi Soetjipto

JAKARTA, Indonesia (May 10, 2000 – Kabar Irian/Irian News/Reuters)---Indonesia said on Wednesday it may suspend production at Freeport’s vast Grasberg copper and gold mine in remote Irian Jaya after an accident last week which left four workers missing and presumed dead.

Environment minister Soni Keraf told reporters a team had been sent to the mine in the mountains on the western side of New Guinea Island to investigate last week’s landslide.

Grasberg, one of the world's largest copper and gold mines, is majority owned by U.S.-based Freeport-McMoRan Copper & Gold Inc.

"Maybe suspending it would be more rational,'' Soni Keraf told reporters before a cabinet meeting, when asked if there was a chance production would be suspended.

He said the government team’s investigation could lead to a criminal probe if evidence of wrongdoing was found.

"I have told the president that if the evidence is strong enough we will ask related institutions to investigate it."

Mindo Pangaribuan, a spokesman for PT Freeport Indonesia, said the government would need strong grounds to order a production stoppage.

"Certainly they must have strong reasons to do so, and if at this stage the idea is just a thought of the minister then we cannot comment very much about it," Pangaribuan said.

Suspending production would have a dramatic effect on metals markets. Freeport said last month it expected sales from Indonesia to reach around 1.4 billion pounds of copper and 1.9 million ounces of gold this year.

Estimated sales in 1999 were a record 1.44 billion pounds of copper and 2.4 million ounces of gold.

FREEPORT SAYS RAIN CAUSED LANDSLIDE

Pangaribuan said last week's landslide had been caused by heavy rains and was not the company's fault.

"One must look at why it happened -- and it’s because of the force of nature," he said, adding the company had not dumped waste at the site for more than a month before the accident.

"Normally the rainfall is registered at eight millimeters per day but in the few days before it collapsed, rainfall was registered between 27 and 40 millimeters per day," he said.

But conservation groups accused Freeport of failing to ensure safe waste disposal and said the landslide had caused environmental damage.

Pangaribuan said imminent suspension of production was unlikely, as the government team investigating the accident was not due to finish its visit until Saturday and would then need more time to analyze its findings.

The lucrative Grasberg mine has been at the center of controversy in Indonesia for years.

Critics accuse Freeport of environmental damage, exploitation, cultural insensitivity and failure to share enough of the benefits from the mine with local people.

But Freeport insists it maintains the highest environmental and safety standards and says it has made strenuous efforts to promote social improvement in Irian Jaya.

The province is one of Indonesia’s separatist hotspots, with a low-level pro-independence insurgency simmering for years.

With the fall of former President Suharto in 1998, demands for independence from restive provinces became louder, and foreign firms have faced growing pressure to share with local people the profits they generate.

Earlier this week, PT Freeport Indonesia was forced to temporarily close its Jakarta headquarters after around 200 Irian protesters rallied outside demanding that the company set aside a greater share of its revenue to help local communities.

Another Indonesian mine, in Kelian in East Kalimantan, was forced to halt production and evacuate workers this week after being blockaded by locals demanding compensation for land they had lost. The mine’s operator, PT Kelian Equatorial Mining, is a subsidiary of Rio Tinto.

KABAR IRIAN ("Irian News") Website: http://www.irja.org/ 

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