Tag Archives: Grasberg

Rio Tinto about to offload stake in Grasberg mine for $3.5 billion

Grasberg mine on the island of New Guinea, one of the world’s biggest sources of copper and gold. (Image: Google Earth)

Commentary from SkyTruth: “News that Rio Tinto is negotiating to sell out its stake in the massive Grasberg Mine in West Papua (Irian Jaya). We’ve written about this mine before: uncontrolled dumping of tailings into rivers flowing past the mine has caused the deposition of tailings across a broad swath of former rainforest downstream, creating a moonscape 30 miles long and up to 2-1/2 miles wide. By selling out, Rio Tinto might be able to dodge any liability for that damage — although their partner Freeport McMoRan may still be on the hook, and apparently the “tailings issue” is holding up the sale”

Cecilia Jamasmie | Mining.com | 23 May 2018

World’s No.2 miner Rio Tinto confirmed Wednesday is ready to sell its stake in the giant Grasberg mine, the world’s second largest copper operation, to Indonesia’s state mining holding company Inalum for $3.5 billion.

The move could mark the end to a long-drawn-out, three-way dispute over the mine, which has been centered on bringing local ownership of Grasberg up to 51%, a main requisite set by the Indonesian government to allow Freeport-McMoRan to keep operating in the country.

Discussions with  PT Indonesia Asahan Aluminium, known as Inalum, and Freeport — the other two companies engaged in talks — were ongoing, Rio said, “including as to price,” noting that no agreement had been reached.

Rio’s deal with Freeport was struck in 1995 and entitles it to a 40% share of production when certain output levels are hit. But as a result of strikes and other disruptions and as the open pit at Grasberg nears the end of its life, the Melbourne-based miner hasn’t seen any benefit since 2014.

Chief executive Jean-Sebastien Jacques publicly questioned Grasberg’s place in Rio’s future back in February 2017. He followed in June with a remark about the mine being a world-class copper deposit, which might not be a world-class mining investment.

“There is a fundamental difference between a world-class resource and a world-class business,” he said again last week at the Bank of America Merrill Lynch Global Mining, Metals & Steel Conference.

Indonesia and Freeport have been negotiating the terms for the company to give the government a majority ownership in Grasberg for over a year. But until today, it wasn’t clear what would happen to Rio’s interest in the mine.

Grasberg, the world’s second-largest copper mine and fourth largest gold operation, has transitioned to a fully underground operation, set to reach full capacity by 2022, when it will produce 160,000 tonnes per day of ore.

The additional Deep Mill Level Zone block cave mine, currently under construction, is projected to contribute an additional 80,000 tonnes per day of ore once at full capacity, expected in 2021.

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Three dead since Sunday in renewed fighting in Papua

Members of the Indonesian Army in Papua. Photo: AFP

Radio New Zealand | 6 April 2018

Gunfire exchanges between Indonesian military forces and West Papuan guerillas in Mimika regency have left three people dead since Sunday.

The death of a soldier with the Indonesian army, or TNI, prompted renewed fighting in the mountainous area around the Freeport mine in Papua province.

TNI and police forces had gone into a remote part of the area to reclaim villages controlled by the West Papua Liberation Army, or TPN.

TPN guerilla forces have declared war on the Indonesian state and the operations of the Freeport mine.

An NGO worker in Mimika’s capital Timika, Demi Picoalu, said the TNI killed two Papuans in an intense sweep operation sparked by the killing of one of their troops on Sunday.

“After that, massive sweeping opertaion in (local) villages, and they (joint TNI and police troops) shoot everyone, because the TPN is hiding in the community village, so TNI used rockets.”

Earier, according to the Jakarta Post, the TPN said that over 1,000 civilian lives were at risk due to the TNI’s operation.

TPN spokesperson Hendrik Wanmang said they had gathered civilians in Kampung Opitawak and TPN fighters had retreated and left the kampung to avoid civilians being mistaken for armed fighters.

However, Demi Picoalu said that according to reports he had recieved from Banti village, the TNI’s sweep operation had stopped.

Local villagers had been evacuated to the relative calm of a village named Banti 2 where they were consideed safe lest fightnig break out again.

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Major quake cuts communications, halts oil and gas operations in Papua New Guinea

Landslide and damage to a road located near the Ok Tedi mine township of Tabubil after an earthquake that struck Papua New Guinea’s Southern Highlands, February 26, 2018. Jerome Kay/Handout via REUTERS

Charlotte GreenfieldSonali Paul | Reuters | 26 February 2018

At least one company began evacuating non-essential personnel after a powerful 7.5 magnitude earthquake hit Papua New Guinea’s energy-rich interior on Monday, causing landslides, damaging buildings and closing oil and gas operations.

The tremor hit in the rugged, heavily forested Southern Highlands about 560 km (350 miles) northwest of the capital, Port Moresby, at around 3.45 a.m. local time (1545 GMT Sunday), according to the U.S. Geological Survey (USGS).

A spokesman at Papua New Guinea’s National Disaster Centre said by telephone the affected area was very remote and the agency could not properly assess damage until communication was re-established.

He said there were no confirmed casualties, although the International Red Cross (IRC) in Papua New Guinea said some reports indicated there were “fears of human casualties”.

“It’s very serious all across the Southern Highlands and also all over the western highlands. People are definitely very frightened,” Udaya Regmi, the head of the IRC in Papua New Guinea, said by telephone from Port Moresby.

The PNG government also said it had sent disaster assessment teams. At least 13 aftershocks with a magnitude of 5.0 or more rattled the area throughout the day, according to USGS data, but no tsunami warnings were issued.

Early on Tuesday, USGS reported that another quake with a magnitude of 6.4 had hit 142 km (88 miles) from the city of Mount Hagen at a depth of about 10 km.

“The Papua New Guinea Defense Force has also been mobilized to assist with the assessment and the delivery of assistance to affected people as well as the restoration of services and infrastructure,” Isaac Lupari, the chief secretary to the government, said in a statement after Monday’s tremor.

ExxonMobil said it had shut its Hides gas conditioning plant and that it believed administration buildings, living quarters and a mess hall had been damaged. It also said it had suspended flights into the nearby Komo airfield until the runway could be surveyed.

“Due to the damage to the Hides camp quarters and continuing aftershocks, ExxonMobil PNG is putting plans in place to evacuate non-essential staff,” the company said in an emailed statement.

Gas is processed at Hides and transported along a 700 km (435 miles) line that feeds a liquefied natural gas plant near Port Moresby for shipping.

PAPUA PANIC

PNG oil and gas explorer Oil Search said in a statement it had also shut production in the quake-affected area.

The giant Grasberg copper mine operated by the Indonesian unit of Freeport McMoRan in neighboring Papua province was not affected, a Jakarta-based spokesman said.

However, the quake and several aftershocks caused panic in Jayapura, the capital of Indonesian Papua, Indonesia’s disaster mitigation agency said in a statement, but there were no reports of casualties or damage there.

The IRC’s Regmi said communications were “completely down” in Tari, one of the larger settlements near the quake’s epicenter, and that landslides had cut roads.

Several other aid and missionary agencies said poor communications in the area made damage and injury assessment difficult.

“The bush structures that they build tend to handle earthquakes extremely well,” Christian missionary Brandon Buser told Reuters after contacting several remote villages by shortwave radio.

Earthquakes are common in Papua New Guinea, which sits on the Pacific’s “Ring of Fire”, a hotspot for seismic activity due to friction between tectonic plates.

“This is the Papuan fold-and-thrust belt, so it’s a typical movement of faults in that region, but it’s big,” said Chris McKee, acting director of the Geohazards Management Division in Port Moresby.

Part of PNG’s northern coast was devastated in 1998 by a tsunami, generated by a 7.0 quake, which killed about 2,200 people.

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Indonesia police kill Papua woman, clash claim disputed

Police claim arrested youth was stealing ore concentrate from the Grasberg mine cargo dock

Niniek Karmini | Associated Press | 5 February 2018

Indonesian paramilitary police fatally shot a woman in what they said was a clash with stone-throwing villagers in the troubled Papua region, but a relative of the victim disputed their account of events.

Police said in a statement Monday that the 61-year-old woman was among villagers who intervened to help an 18-year-old man who jumped out of a boat to escape custody after being detained on suspicion of theft.

The statement said police fired warning shots during the clash with villagers on Saturday. The woman died from a gunshot to the head, police said. A cousin of the dead woman said that there was no clash and that she was shot as an innocent bystander when police fired on the escaping suspect.

In a separate statement, Papua police spokesman Ahmad Kamal said seven officers were being questioned by the police internal affairs unit in connection with the incident.

Conflicts between indigenous Papuans and Indonesian security forces are common in the impoverished region, which Indonesia annexed more than half a century ago.

Police said the 18-year-old was one of three people suspected of stealing ore concentrate in Mimika district from the cargo dock of U.S. mining company Freeport-McMoRan, which operates the giant Grasberg gold and copper mine in Papua, and was captured after a hunt by police, security guards and navy officers.

The handcuffed man jumped out of the speedboat he was being transported in on Saturday evening and villagers from a nearby island came to his aid and prevented him from being apprehended again, according to police.

Cornelia Emakefaro, the cousin of the victim, said the woman and her husband were in a small boat on an errand to fetch fresh water when the woman was hit by police gunfire after the theft suspect jumped into the water.

“Based on information from my cousin’s husband as the only witness and the village head, there was no attack from villagers to the officers,” Emakefaro said. “We understand they are carrying out the task of catching suspects who may have been involved in the theft, but they are not entitled to shoot people like chasing game animals.”

In September, Indonesian police demoted two officers who fired at a crowd of protesting Papuan villagers, killing one man, in a decision that rights groups said was too lenient and showed a chronic lack of accountability for abuses in Papua.

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Papua shooting shuts down Freeport route

West Papuans have long expressed frustration about the environmental destruction caused by the Freeport mine operations in Mimika regency. Photo: MIneral Policy Institute

Reuters | Radio New Zealand | 13 November 2017

The Indonesian unit of Freeport-McMoRan has temporarily shut the main supply route to its Papua mine after a shooting incident, a spokesman says, amid escalating tensions between security forces and an armed Papuan group in the area.

No one had been reported hurt after shots were fired at a vehicle, but the main supply route to the world’s second-biggest copper mine had been temporarily closed while the security situation was assessed, Freeport Indonesia spokesman Riza Pratama said in text message.

Authorities in Indonesia’s eastern province of Papua are delivering food and aid to villages near the mine where security forces say the rebel group has blocked residents’ movement, as security personnel surround the area, a police official said.

Police said a group linked to the Free Papua Movement (OPM) was preventing about 1000 people from leaving five villages near the Grasberg mine operated by the US company.

“We continue to try a persuasive approach and dialogue,” said Viktor Mackbon, police chief of the Mimika area, where the villages are located. Talks with the group would be conducted through public and religious figures in the region, he added.

Officials on Saturday said about 200 police and military personnel had been deployed in preparation to secure the area by force, if necessary.

Police said they will distribute, on Monday, a notice in the area for the “armed criminal group” to give themselves up and surrender weapons.

Reuters could not immediately reach members of the rebel group, the West Papua National Liberation Army (TPN-OPM), to seek comment.

On Friday, the group denied occupying villages near the mine, but said it was “at war” with the police, military, and Freeport.

A resident from one of the villages, Banti, said security forces had blocked access to the village.

Residents he had spoken were not being held hostage by separatists but “are only worried about what might happen if the police and military come into their area”, he said.

A state of emergency has been declared in the area and security stepped up after a string of shootings since August 17 that killed one police officer and wounded six.

Papua has had a long-running, and sometimes violent, separatist movement since it was incorporated into Indonesia after a widely criticised UN-backed referendum in 1969.

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Papua separatists dispute Indonesia claim of hostage taking

The giant Grasberg open-pit copper and gold mine in Indonesian Papua on the island of New Guinea. Photo by Alfindra Primaldhi/Wikimedia Commons

Associated Press | November 10, 2017

A member of an armed separatist group in Indonesia’s Papua region has disputed police claims that it’s holding villagers hostage during a standoff with security forces.

The remote region’s long-simmering insurgency has flared in the past month, with one paramilitary police officer killed and six others wounded in attacks by the National Liberation Army of West Papua. The two sides are also waging a PR war, with police calling the group an armed criminal gang and accusing it of attacks on civilians.

Hendrik Wanmang, who described himself as a commander of the armed group that goes by the Indonesian acronym TNP, said in an interview Friday that Banti and Kimbeli villagers can’t go to an area the separatists define as a battlefield with security forces because it’s unsafe. But otherwise villagers are free to go to their farms and move about as they please, he said.

Police on Thursday said a group of about 100 including 25 gunmen were occupying the two villages and preventing 1,300 people from leaving. Several hundred of the people are migrant workers from the Indonesian island of Sulawesi.

“It’s not true, it’s only the provocation of Indonesian military and police with the aim of damaging our image,” Wanmang told The Associated Press. “People there are safe, both natives and non-natives are free to do activities as usual.”

Wanmang was one of two commanders who signed an Oct. 21 statement warning of unspecified retribution against security forces for alleged brutality against indigenous Papuans.

The letter declared an area near the U.S.-owned Grasberg gold and copper mine as a battlefield.

The mine owned by Phoenix, Arizona-based Freeport-McMoRan Copper & Gold Inc. is a source of tension in the region due to environmental damage and indigenous Papuans’ resentment at profits from local resources being sent abroad.

A low-level insurgency for independence has simmered in Papua since it was transferred from Dutch to Indonesian rule in 1963. The region, which makes up the western half of the island of New Guinea, was incorporated into Indonesia in 1969 following a U.N.-sponsored ballot of tribal leaders that has since been dismissed as a sham.

Indonesia maintains a heavy security presence in the region and restricts foreign journalists from freely reporting there.

Wanmang said police descriptions of TNP as an armed criminal group and accusations of crimes against civilians were a tactic to discredit the Papuan independence movement.

“We are not a new group, we are not a criminal group,” he said. “We are separatist group who fought for Papua from generation to generation demanding the sovereignty of the people of Papua, demanding Papuan independence, separate from Indonesia.”

Security minister Wiranto, who goes by one name, has asked security officials to peacefully persuade the separatists to leave.

Military commander Gatot Nurmantyo said in a statement Friday that the villagers are “hostages” and the military is conducting surveillance of their villages. With police, it hopes to negotiate a solution but is readying other measures.

“We are also preparing ways that are hard and must be done very thoroughly,” he said. “Currently we are working closely with police and setting up a joint team in handling the problem.”

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Separatist violence threatens to disrupt Freeport’s Indonesia mine

Fergus JensenAgustinus Beo Da CostaSam Wanda | Reuters | 9 November 2017

Armed separatists have occupied five villages in Indonesia’s Papua province, threatening to disrupt Freeport-McMoRan Inc’s giant Grasberg copper mine, which has already been hit this year by labour unrest and a dispute over operating rights.

A state of emergency has been declared and around 300 additional security forces have been deployed to the mining area of the eastern province after a string of shootings since Aug. 17 that killed one police officer and wounded six.

“They want to disrupt Freeport’s operations,” said Suryadi Diaz, a spokesman for the Papua police.

“(Freeport) is rich but they are poor, so they just want justice,” Diaz said, adding that the militants were a splinter group of the separatist Free Papua Movement (OPM).

Freeport Indonesia spokesman Riza Pratama said the company was “deeply concerned” about security and was using armoured cars and helicopters to ferry workers to and from the Grasberg mine in the province’s Mimika regency.

He said attacks had been launched along the road near the town of Tembagapura, about 10 km (6 miles) from the mine, where families of employees – including expatriates – live.

He added that so far there had been no impact on production and shipments from Grasberg, the world’s second-biggest copper mine.

Last year Freeport Indonesia contributed about a quarter of the parent company’s global sales of 4.23 billion pounds (1.92 million tonnes) of copper.

Arizona-based Freeport, the world’s largest publicly listed copper producer, has already been grappling with labour problems at Grasberg and a lengthy dispute with the Indonesian government over rights to the mine.

The mine has also be dogged by major concerns over security due to a low-level conflict waged by pro-independence rebels in Papua for decades. Between 2009 and 2015, shootings within the mine project area killed 20 people and wounded 59.

Papua and neighbouring West Papua provinces make up the western half of an island north of Australia, with independent Papua New Guinea to the east. The provinces have been plagued by separatist violence since they were incorporated into Indonesia after a widely criticised U.N.-backed referendum in 1969.

President Joko Widodo has sought to ease tension in the two provinces by stepping up investment, freeing political prisoners and addressing human rights concerns.

Police spokesman Diaz said around 1,000 local residents and migrant workers who pan for gold in Mimika were being prevented by the separatists from leaving the five villages.

Security forces had entered the occupied area on Thursday, police and military sources told Reuters, but it was not clear if they had been able to evacuate any of the residents.

“Perhaps they feel envious with the company’s presence,” Papua Police chief Boy Rafli Amar told Reuters. “We are trying to maximise protection for the community … because people have been raped and some have had goods stolen.”

In one attack in late October, shots were fired through the windscreen of an ambulance that was ferrying a villager who had just given birth, police said.

The water supply of Tembagapura town had also been contaminated with kerosene, Boy said, but police had not been able to ascertain if it was an act of sabotage carried out by the same group behind the shootings.

“JUST WILD THIEVES”

In a video purported to come from the National Liberation Army (TPN-OPM), part of the OPM group, dated Sept. 29, a guerrilla action coordinator named as Joni Beanal reads out an open letter warning of attacks on Freeport in order “to destroy it”.

“The main reason for the integration of Papua into Indonesia was a conspiracy by America and Indonesia in the interests of mining exploitation by Freeport MacMoran in Papuan soil,” the coordinator said on the video, which was seen by Reuters.

Reuters was not able to verify the authenticity of the video. Papua police spokesman Diaz dismissed the recording as “old”.

Papua Military Commander Major General George Elnadus Supit said the TPN-OPM posed no significant threat and were “just wild thieves who are perhaps being used by a separatist group”.

Concord Consulting group warned that a harsh crackdown on the militant group could “backfire” if security forces were unable to prevent civilian casualties.

“Militants in Mimika will be able to hide among the local population – many of whom share their rejection of Indonesian rule,” the security consultancy said in a note on Wednesday.

Freeport contributed $20 million towards Indonesian government-provided security protecting workers and infrastructure in 2016, about one-third of its local security budget.

The company paid $668 million to the Indonesian government last year in income taxes, royalties and export duties, making it one of the country’s single largest taxpayers.

The Panguna copper and gold mine in neighbouring Papua New Guinea was abandoned in 1989 after a campaign of sabotage by the rebel Bougainville Revolutionary Army.

Echoing the situation in Papua, there was deep resentment among the indigenous Bougainville people about the wealth going to the Papua New Guinea central government and the mine’s then operator, Conzinc Riotinto of Australia Ltd, a forerunner of Rio Tinto .

(Reporting by Fergus Jensen and Agustinus Beo Da Costa in JAKARTA; Additional reporting by Sam Wanda in TIMIKA; Editing by John Chalmers and Alex Richardson)

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