Monthly Archives: January 2016

MGU keen to sell more than Panguna

Bougainville Special Correspondent

Self-proclaimed Me’ekamui Tribal Government of Unity (MGU) and Transpacific Ventures (TPV) entered an agreement in 2013 selling not just Panguna, but the entire island’s mineral rights to the company. Transpacific Ventures, with its Executive Director Renzie Duncan, designed a confidential Memorandum of Understanding (MOU) with the tribal government which virtually holds no authority on Bougainville, let alone Panguna.

Phillip Miriori

Phillip Miriori

The deal was drafted in the hope of utilizing the now Bougainville Transitional Mining Act. Which despite stiff opposition, was passed in ABG’s House of Representatives on 26th of March 2015.

The MGU’s self-declared president Philip Miriori; who has ambitiously pawned the entire island’s mineral rights for economic investment to the illegal government, emits a long trail of smoke that is getting thicker as the PNG Prime Minister is becoming more involved.

Caption from a copy of the MOU signed in 2013

Caption from a copy of the MOU signed in 2013

Now it would be assumed that ABG is aware of this agreement whether by formal means or hearsay, nevertheless both governments have an on and off relationship. But if there can be any speculation to this, MGU might be ABG’s ticket to Panguna. And having the so called tribal government being ‘the voice’ of the people of Panguna, will be a pretext to initially kick starting reopening of Panguna.

MGU is one of the many spent shell casings from the once well organised guerilla government that chased out a giant mining corporation, and out-maneuvered an Australian supplied and trained military. Under Late Francis Ona, Me’ekamui was the deterrent from foreign and corporate vultures. This is not the case today.

President Philip Miriori, who has come out as a sleazy operator; has been in the business of forking out from ‘investors’ like as Tall J, United Resources Management, Bill Wang and TPV. His motives may be for personal gain or so to speak, because he has not been able to initiate anything apart from bringing in the district government into Panguna. Presumably his hidden work may be coming undone with the recent spate of activities by the PM O’Neill.

The MOU has virtually signed away Bougainville's mineral rights

The MOU has virtually signed away Bougainville’s mineral rights

The speculation is Philip Miriori is working closely with TPV as the mining company and the PNG government as a potential funder for the reopening. Hence, the PNG PM is looking at purchasing the 53.83% shares from Rio Tinto, not only that, but has appointed himself as the Minister for Bougainville Affairs.

If this is the case, it is logical to predict repercussion of instability on the island. There are well armed factions that still exist and very much tainted by the issue of mining.

The people of Panguna, since pre-crisis have been misrepresented by their own leaders, relenting too much against the people’s cries on the degradation and destruction of their environment. It is important to note that Bougainville is predominantly matrilineal, and landowner representation at that time were representative-wise contrary. It was not until late leaders, Francis Ona and Perpetua Serero took over the Panguna Landowners Association.

Lest should it be forgotten that men took to arms under Francis Ona as a measure of deterrence and defense. Perpetua Serero’s inspiration had as much influence as well. Women had had enough and demanded their men to take action. And customarily, men are responsible for defending the land of their mothers and daughters. This has been the practice of the people for thousands of years.

What happened afterwards is a history that exposed BCL’s arrogance and embarrassed a government.

Importantly, what can be defined from the region’s past to todays are the same issues of misrepresentation, greed and arrogance. These were key issues that led to the crisis. It is a no brainer to point out these issues with the current leadership.


Filed under Corruption, Financial returns, Papua New Guinea

Warning over PNG PM’s Bougainville manoeuvres

panguna wcf

Radio New Zealand

A Papua New Guinea opposition MP Sam Basil has warned about the prime minister Peter O’Neill’s interest in the Panguna mine in Bougainville.

Mr O’Neill last month met with the president of the autonomous Bougainville region, John Momis, over a reported government proposal to purchase 53% of Rio Tinto’s shares in Bougainville Copper Limited.

Mr Momis, whose administration has been in recent discussions with BCL about a possible re-opening of the mine, rejected the proposal.

The prime minister has since denied that the government is interested in buying in on Panguna.

But Mr Basil says Mr O’Neill’s latest move to appoint himself Minister for Bougainville Affairs is ominous.

“With his actions, in terms of dealing with other mines – Tolukuma and Ok Tedi – I think the people of Bougainville should be very wary of the prime minister’s actions, and they should be very careful on how they allow the prime minister to deal with their mine. So we should be very careful with Mr Peter O’Neill. He has lied to us many times.”


Filed under Financial returns, Papua New Guinea

Bauxite in Malaysia: The environmental cost of mining

malaysia bauxite

Bauxite mining has become a controversial political issue in Malaysia. As the government implements a temporary ban on extracting the aluminium ore, BBC South-East Asia correspondent Jonathan Head visits the most-affected area.

Amid the monotonous dark green lines of Malaysia’s endless palm oil plantations, there are now vivid red gashes in the hills behind the east coast town of Kuantan.

These have appeared only in the past 18 months, as a frenzy of open-cast bauxite mining gripped Pahang province.

Tonnes of bauxite are being transported out of the region. It is the world’s main source of aluminium so is vital for the construction of everything from airplanes to saucepans and cooking foil.

The numbers are staggering.

Annual output of bauxite ore has increased from a little over 200,000 tonnes in 2013, to nearly 20 million tonnes last year. Malaysia is now the world’s top producer, accounting for nearly half of the supply to China’s massive aluminium industry.

What is bauxite?


  • It is an aluminium ore and the world’s main source of aluminium.
  • Not a mineral itself, it is a rock comprised mostly of aluminium hydroxide, typically alongside small amounts of silica, iron oxide and other impurities.
  • It is used mostly to make aluminium but other uses include making sandpaper, polishing powders, and in hydraulic fracturing, or “fracking”, gas and oil from shale rock.
  • There are plentiful reserves of it, which should allow hundreds of years’ more use even before recycling is taken into account.
  • The top producers are Australia, China, Brazil and India.
  • Commonly found near the surface, it is typically strip-mined – a practice sometimes criticised for its environmental impact.
  • The subsequent production of aluminium involves electrolysis and is usually located in countries where electricity is cheap, such as Iceland.

Malaysia has a long history of mining, especially tin, but until very recently it scarcely registered on global markets as a source of bauxite. That changed suddenly in January 2014, when, in an attempt to boost its own aluminium-smelting industry, Indonesia banned exports of bauxite ore.

Up to that point Indonesia had been China’s major supplier.

Several Indonesian mining companies then started looking at the hills above Kuantan, where the plentiful bauxite was of a lower quality than that available in Indonesia and Australia.

Fleets of lorries have been abandoned as the ban on mining takes hold

Fleets of lorries have been abandoned as the ban on mining takes hold

‘Mad rush’

Much of the land in Pahang province has been redistributed to settlers so they could cultivate it with rubber, palm oil or fruit orchards. So all the companies had to do was approach smallholders whose properties contained bauxite, and offer them substantial sums of money to allow their land to be mined.

Most of the plots were quite small, allowing the companies to exploit a loophole in Malaysian law, which only requires an environmental impact assessment for plots larger than 250 hectares.

The little country roads winding through the hills were suddenly clogged with huge lorries carrying the ore to the port in Kuantan. The rivers ran red with bauxite sediment, staining the sea as they flowed out. Some of the mines had licences; many did not.

“It became a whole mad rush,” says the opposition member of parliament for Kuantan, Fuziah Salleh. “There were 44 companies with export licences, and they were all rushing to get as much as they could get from anybody who was willing to sell their raw ore.

“The greed, the need, of certain people, outweighed welfare of the common people and the authorities allowed it. And I think there is a lesson to be learned.”

The lesson has perhaps been learned. The federal government has ordered a halt to all mining while it rethinks the regulation of the industry. Seven people have been detained on suspicion of corruption. But the damage to the environment and future health risks remain unknown, and worrying.

How badly has bauxite polluted the water?

malaysia bauxite pollution

I watched a team from the Malaysia Nature Society (MNS) taking samples from the Sagu River, at the point where water is pumped out for Kuantan’s domestic supply.

They collected bottles of water and trays of alluvial mud, and analysed them to detect the presence of heavy metals, arsenic and mercury, which typically exist in bauxite sediment.

Government officials are already doing similar tests, but the failure to regulate the bauxite industry has damaged public trust in its efforts; the MNS volunteers said they wanted to do the tests themselves to ascertain how badly polluted the water supply is.

Marine scientists have also warned of possible catastrophic damage to the ecosystem off the coast of Pahang.

Volunteers test water pollution near mines, instead of trusting government readings

The official who ultimately bears responsibility for what has happened in Pahang is the state’s Chief Minister Adnan Yaacob. A veteran politician from the ruling UMNO party, he has been in the job for 16 years, and under Malaysia’s federal system chief ministers wield a lot of power.

He turned down the BBC’s request for an interview. But he has since acknowledged that the state government failed to control bauxite mining, and that he had not sought central government help because he believed he could handle the situation locally.

Demanding compensation

Che Long bin Che Ali is one of the residents in the bauxite zone who refused to lease out his land, where he cultivates fruit trees. He worries about the impact on the health of future generations.

But his house is right next to one of the roads used by the ore lorries; everything inside and outside his home was covered by a thick film of red dust, and the trees started to die.

He began stopping the lorries and demanding compensation payments from them.

He took me to what had been a durian orchard a few hundred metres down the road. The home of the orchard-owner now lies abandoned and propped up on a high slab of red-brown earth.

All around, the excavators have dug out a desolate moonscape of earth piles and gaping holes.

“This has not helped us,” he told me.

“I am not angry with the bauxite industry. I know it brings income for the government, but it must follow proper regulations. Don’t pollute our roads, don’t pollute the rivers.

“A handful of people enjoy the profits, but in future many people could suffer.”

As the three-month moratorium took hold, fleets of lorries were left idle in jungle clearings, next to stockpiles of ore that have not yet been exported.

Once the moratorium expires, it is not clear what will happen. Many residents want mining to be banned permanently. The state is thought to have only 10 years of bauxite reserves left.

Perhaps just a few hundred settlers got rich from the bauxite boom, and a few dozen well-connected companies. The state collected a 5% royalty on exports, but opposition politicians argue the federal government could have imposed a 10% duty, but did not do so.

Whatever the benefits were, they do not appear to justify the enormous environmental damage that has been done.

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Government acts too late over Sinivit mine pollution


MRA allowed New Guinea Gold to abandon the Sinivit mine in 2014

MRA tells firm to clean up mine
Elizabeth Vuvu | The National aka The Loggers Times
THE Mineral Resources Authority has told a Canadian company to come and clean up the Sinivit mine in East New Britain it had abandoned.
New Guinea Gold Limited abandoned the East New Britain gold project in September 2014 after blaming the Government and the authority “for not quickly renewing our mining lease”.
MRA managing director Philip Samar told The National that they had notified the company to return and rectify safety and environment issues related to the Sinivit project.
Samar said they had told New Guinea Gold Ltd that it was their responsibility to clean up their mess at the mine site.
“Under the Mining Act, the company still has a mining lease that has not been cancelled,” he said. 
“Therefore, New Guinea Gold remains responsible to ensure all mining and environment regulations are complied with and safety measures are followed.
“As the mining lease holder, it needs to be responsible and cannot shift the blame here and there.”
 He said the company responded by blaming the State and the Mineral Resources Authority for not acting quickly on its mining lease.
“These unsubstantiated and misplaced claims by the tenement holder did not change New Guinea Gold’s social and regulatory obligations to fully maintain the mine. 
Samar said the company had not lodged any application with the MRA to have the mine placed in a “care and maintenance” phase. 
He said production had stopped but the site would continue to be managed safely and responsibly to ensure the mine’s security and stability.
“There is a process to follow and you cannot just walk away after giving us a letter,” Samar said.
“It is a legal requirement that a formal application is submitted.
“Mines are not tuckerboxes and companies who operate them must ensure they have the sources to maintain these mines.”
The Sinivit mine is currently under a renewal application for a new 10-year term.
That application was with the Minister for Mining for a final determination in accordance with the Mining Act process and a National Court order issued in February 2014.
There were reports that when the Sinivit mine was abandoned, locals looted and vandalised everything at the mine, including explosives and chemicals. 
Reports had surfaced of chemicals from the abandoned vats flowing into the Warangoi River. Meanwhile, provincial authorities had warned the people of Dadul, Riet and Uramot to stay clear of the mine site.

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Filed under Environmental impact, Papua New Guinea

The Presidential leak, PNG’s bid for Bougainville Copper and the policy challenge ahead

no go zone

Dr Kristian Lasslett, International State Crime Initiative

Over the holiday period, reports emerged suggesting that the Papua New Guinea government intended to purchase Rio Tinto’s 53.83% equity stake in Bougainville Copper Limited (BCL).

This proposal earned strong condemnation from the Autonomous Bougainville Government (ABG). With good reason, the Papua New Guinea state deployed brutal violence during the 1990s in an effort to keep Bougainville’s Panguna copper mine open (operated then by BCL), which at the time was a key revenue source for the Namaliu government.

This violence triggered a prolonged armed conflict, which was settled in 2001 through the Bougainville Peace Agreement. The agreement has devolved a range of powers to the Bougainville government including over mining. As a result, the ABG now has ultimate say over mining related issues.

Unfortunately when reporting on Papua New Guinea’s proposed BCL buy out, the ABC’s South-East Asia correspondent, Liam Cochrane, omitted key details . Having been the recipient of a high level leak, Cochrane focuses on a letter from President John Momis to his Papua New Guinea counterpart, Prime Minister Peter O’Neill.

In a provocative introduction Cochrane observes:

The Papua New Guinea Government wants to buy Rio Tinto’s shares in the Australian company Bougainville Copper Limited (BCL), according to Bougainville’s President. Such a move would be “completely unacceptable” to Bougainvilleans and would be “potentially a source of conflict”, according to a series of leaked letters obtained by the ABC.

Cochrane adds by way of commentary, ‘the suggestion of conflict is a serious one, considering the large number of weapons still on the island and the highly factionalised population’.

The ABC report then quotes an ANU expert, in a way that implies this proposed purchase would give Papua New Guinea control over Panguna:’I think the main questions are why does the Government want to buy the mine …’.

Curiously Cochrane omits from his story arguably the most critical paragraph from the leaked letter, which confirms the  proposed purchase by Papua New Guinea would not give the O’Neill government any commanding right whatsoever over Bougainville’s natural resources.

President Momis makes this clear to Prime Minister O’Neill, stating: ‘I must also emphasise two points concerning the effect of the Bougainville Mining Act 2015. The first is that under section 367 of the Act, BCL now holds nothing other than an Exploration Licence [see endnote – K.L.] over the area of its former Special Mining Licence at Panguna’ (italics added).

The leaked letter then reveals:

That Licence [under the Mining Act] is take to have been granted on 8 September 2014, and has a term of 2 years. Section 112 provides that where 25 per cent or more of the shares of a company holding an Exploration Licence are transferred or otherwise dealt with within 24 months of the licence being granted, the Secretary to the ABG Mining Department must initiate action for cancellation of the licence.

President Momis adds, ‘these provisions are intended to provide protection for the ABG and for Bougainville more generally in such situations’.

Hopefully this legal appraisal should do much to counter concerns that Papua New Guinea can lawfully obtain a controlling stake in Bougainville’s natural resources. It is doubtful the O’Neill government would proceed down an illegal route, would obviously be strongly opposed by Bougainville and all other states in the region.

Why the President hasn’t come out to calm the situation is unclear.

Previously, ABG officials have strategically stoked local anxieties over the Papua New Guinea state, to counter longstanding opposition to Rio Tinto’s return in Panguna. This intersects with a strongly held policy belief, that without mining at Panguna independence from Papua New Guinea will be unattainable.

According to New Dawn radio, the ABG Minister for Veteran Affairs, warned landowners of the doomsday situation that would follow were Bougainville unable to obtain fiscal viability before the independence referendum window closes:

… if the Bougainville Peace Agreement lapses in 2020 all their talk of Independence and landownership would be forfeited to the State of Papua New Guinea. Mr Sisito said when this happens all Bougainville leaders and Ex combatants will be held for treason as all agreements with PNG will become null and void. The Veterans Affairs Minister said that to avoid all these problems the Ex-combatants and landowners must agree to reopen the Panguna Copper mine.

However, in the current instance it is questionable whether the President is deploying fears over a Papua New Guinea takeover, to elicit support for Rio Tinto’s. Especially in light of another critical statement in the leaked letter, which has received little attention in subsequent reporting.

An ABG policy shift on the Panguna mine

As late as April last year, President Momis maintained that there was widespread landowner support for the reopening of Panguna. He told Radio New Zealand International, ‘landowners and me’ekamui are totally in support’. Coupled to this, he argued, there was a compelling business case for the project which would see significant revenues flow to the ABG before the referendum window closed in 2020.

However, in his letter to Peter O’Neill, the President signposts a notable shift in policy:

The situation since 2011 has changed. Commodity prices have dropped dramatically. The problems involved in getting consensus on the future of Panguna have added to sovereign risk assessment issues. As yet no announcement has been made of the outcome of the review Rio Tinto initiated into its investment in BCL in August 2014. If Rio’s decision is to divest itself of the equity then the ABG’s considered view is that it is most unlikely that any potential responsible developer will be able to find the $US6 billion to $US7 billion needed to reopen the mine.

As a result of these three factors, President Momis concludes, ‘it is therefore most unlikely the mine will reopen in the foreseeable future’.

While the ABG has always hedged its bets on whether Panguna would reopen, it appears that the government now concedes there is no clear social licence for a return to mining in Panguna, where heavy scars remain. Additionally, it has revised the optimistic economic predictions underpinning its business case. This new position sits more congruently with the evidence set out in empirical research conducted with the mine affected communities, and economic analysis produced by independent industry experts.

President Momis publicly confirmed the ABG policy shift to parliament in a speech delivered on 22 December 2015. He again reiterated ‘the ABG’s assessment now is that it’s quite likely that the Panguna mine will not re-open in the foreseeable future’.

As a result of this conclusion, he argues: ‘Rio also made very significant profits through BCL. Indeed, BCL used to be described as the jewel in Rio’s crown. In all these circumstances, if Rio decides to withdraw from BCL, they must take steps to do a proper mine closure. They must remedy the injustices done’.

This echoes an earlier position adopted by President Momis in 2005 when Bougainville Governor. Then he wrote to the US State Department’s legal adviser in support of a Bougainville class action against Rio Tinto, stating the ‘litigation has helped facilitate the [peace] process as it is viewed as another source of rectifying the historic injustices perpetrated against the people of Bougainville’. In an affidavit for the class action Momis went so far as to blame Rio Tinto for much of the violence and destruction inflicted on Bougainville by Papua New Guinea forces:

It is important to understand the significance of holding Rio Tinto responsible for its actions and the actions of the PNG government. At all times, Rio Tinto, through BCL, controlled the government’s actions on Bougainville … whenever government action was called for on Bougainville, BCL was the one that requested it.

For a period, President Momis stepped away from this adversarial position, arguing controversially the best way to remedy past injustices would be to actually reopen the mine under BCL-Rio Tinto auspices. The logic underpinning this reversal, was explained by the ABG’s legal adviser, ‘the compensation is essentially going to come from production, from profits’.

Of course, it was difficult for many within the mine affected communities to fathom how reopening the Panguna wound would serve to heal it. Instead, rural communities impacted by the mine have welcomed the slow recovery process being observed in their surrounding environment over the past two decades (although the road to recovery is a long one), and are now set upon the task of building an economic future that accords with their own ways and means.

Justice still strikes a chord though, many interviewed in the mine region wish BCL-Rio Tinto to atone for the violence and environmental harm they helped to inflict upon communities – and the expectation is atonement does not come with strings attached.

The challenges ahead for the ABG

The President’s recent policy shift, if enduring, may be a positive signal that the ABG’s stance is beginning to reflect strong local sentiment in the Panguna region.

However, it remains to be seen how much of a sea change the President’s remarks represent. One critical test for the ABG over the coming year will be confronting the high levels of corruption and mismanagement within government, signposted in Auditor General and Public Accounts Committee reporting.

This is no easy task. We have seen recently appointed Ministers and civil servants implicated in major corruption scandals, documented by the police and courts. Furthermore, the ABG has contracted advice and assistance – for a considerable sum – from a number of foreign concerns implicated in human rights abuses, and malfeasance.

Indeed, it is not clear whether there is actually anyone with a serious foothold within the ABG government, who has the commitment, resources and power to fight the rot.

It is equally worrying that a significant chunk of mainstream international commentary has presented the Panguna mine as a panacea for Bougainville’s challenges, without acknowledging the endemic problems of corruption, public mismanagement or indeed current commercial realities. While arguments have been made that a rapid return to mining would buoy the ABG fiscally – the questionable economics aside, this assumes a well administered state would carefully manage revenues and allocate them into the strategic areas of infrastructure, education, health and rural extension services. Current evidence suggests any revenues would buttress an increasingly clientalistic state, decimated by corruption.

In addition to the problem of corruption, there is an urgent need to strategically invest in local innovation and strengths, which draw upon grass roots productive systems and savvy in a sustainable fashion.

In the past, Bougainville’s President has been reluctant to consider alternative models, which he cast unkindly as ‘planting and selling tomatoes’. Similarly, the ABG’s legal adviser has also opined: ‘So agriculture, contrary to what a lot of outside observers think, is a difficult one … Outside commentators, especially from the activist community, who say there are obvious other ways of getting a sustainable economy in Bougainville have yet to establish the viability of any alternative model unfortunately’.

However, Papua New Guinea’s own fiscal crisis and lamentable performance with respect to service provision, is a salutary example for those who had pinned Bougainville’s future to large-scale extraction projects. Paul Flannigan, an ANU Visiting Fellow and Former Chief Advisor to the Australian Treasury – certainly not an activist in any conventional sense – recently remarked: ‘A more complex answer to what went wrong [in PNG] is based on the tendency of PNG’s political leaders to focus too much of its hopes on its resource sector rather than its people … Greater focus on improving the performance of the agriculture sector would do much more for the people of PNG than a focus on the resource sector’.

This broad advice was given with respect to Bougainville in 2008 by a number of development specialists, who warned ‘while some think that reopening the [Panguna] mine is possible, it is just as likely that any agreement would again collapse. In the interim, a strategy for economic recovery through agricultural production appears the most viable among the possibilities’.

With the window for the independence referendum now open, time is of the essence if the ABG is to conduct a major policy overhaul. Such an overhaul is critically needed if the government is to support the political aspirations of its constituents in the forthcoming vote and the economic aspirations of those so deeply injured by the actual existing practices of the extractive industries on Bougainville.

Letter from President John Momis to Prime Minister O’Neill, 10 December 2015


* By April 2015 BCL’s special mining lease and exploration licences had all lapsed (see The Mining Act 2015 reactivated BCL’s live rights over Panguna, by granting it a two year exploration licence, with caveats designed to prevent Rio Tinto from offloading its share of the company to an undesirable purchaser.


Filed under Corruption, Environmental impact, Financial returns, Human rights, Papua New Guinea

Nautilus to test seabed mining robots in Oman

nautilus machine

Nautilus signs deal on seafloor production

The National aka The Loggers Times 

NAUTILUS Minerals has signed an agreement with United Engineering Services LLC to provide support services in wet testing the company’s seafloor production equipment and storing the equipment.
Nautilus said in a statement the work would begin as soon as it was delivered from suppliers prior to integration onto the company’s production support vessel.
The first equipment to be tested will be the three seafloor production tools which are to delivered from the soil machine dynamics facility in Newcastle-upon-Tyne in the United Kingdom.
Each machine is undergoing rigorous commissioning and factory acceptance testing conducted in dry conditions on land. 
Once delivered, the seafloor production tools will undergo extensive wet testing at Duqm Port in Oman which is designed to provide a submerged demonstration of the fully assembled tools. 
It will involve submerged testing of: 

  • Control systems operations and feedback;
  • Hydraulic functions;
  • Collection system functions; 
  • Survey and visualisation systems.

On completion of the wet testing, the tools will be stored at UES facilities in Duqm, Oman for preservation and maintenance until the integration on the PSV which is expected in 2017. 
Nautilus’ chief executive Mike Johnston said: “It is very exciting to have the SPTs all fully assembled as we prepare for wet testing. 

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Freeport Indonesia CEO resigns after latest scandal

freeport grasberg mine

Latin American Herald Tribune

Maroef Sjamsoeddin submitted his resignation on Monday from his post as the President Director of Freeport Indonesia, a U.S.-based mining company with controversial gold and copper operations in the eastern Indonesian province of Papua, news site reported today.

In a letter sent to all Freeport Indonesia employees, Sjamsoeddin said that his tenure as president has ended and that he didn’t accept parent company Freeport McMoRan’s offer to extend his contract, which began in January last year.

Company spokesperson Riza Pratama confirmed the former president’s resignation, saying only that he resigned for “personal” reasons.

No stranger to criticism, Freeport Indonesia was involved in a recent scandal, in which former House of Representatives speaker Setya Novanto allegedly tried to seek favours in return for extending the company’s work contract. Novanto resigned in December of last year.

Sjamsoeddin had testified in front of the House’s ethics council in hearings into the affair.

Freeport has also for several years faced allegations that its 50-year-old Grasberg mine in Papua, which holds the world’s largest gold ore reserves, has caused environmental damage and been linked to human rights abuses.

For months, the company has been criticized in street protests in Jakarta calling for it to be expelled from the country, as well as calls for the nationalization of the Indonesian unit of the U.S.-based mining firm.

Sjamsoeddin’s decision comes amid ongoing efforts of the provincial Papua government to secure ownership of its share of Freeport.

“What’s important is that Freeport Indonesia has its duties and obligations according to a work contract and obeys the laws and regulations that apply,” Bangun Manurung, head of the Energy and Mineral Resource Department in Papua said yesterday.

Papua Governor Lukas Enembe said recently that he wants Papua’s shareholder status in Freeport to be decided this year.

“The government and the indigenous people of Papua should have a dividend every year. That is what we are still discussing,” Enembe said on Dec. 16 last year.

As an interim measure, Robert C. Shroeder, executive vice president of Freeport Indonesia, has taken over as president director of the mining company.

Papua is Indonesia’s largest and easternmost province and borders the country of Papua New Guinea to its east. Until 2002 the province was called Irian Jaya.

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