Indonesia has hit back at claims that tough new environmental regulations imposed on the giant Grasberg copper mine in Papua are politically motivated or related to the part-nationalisation of the operation.
Grasberg is the world’s second-largest copper mine and 91-per-cent owned by Phoenix-based firm Freeport McMoRan, with a stake held by Rio Tinto.
Jakarta has asked Freeport to reduce tailings, the waste byproduct from mining, that runs into rivers from 50 to 5 per cent.
Half of tailings are currently stored on land and the authorities want that bumped up to 95 per cent.
For 20 years the tailings have made their way downstream to be stored in a “cordoned-off area”, Freeport says.
Grasberg means “grass mountain” in Dutch because it is surrounded by heavy forest.
Freeport, which is negotiating with the government to sell part of its stake to the authorities, would control at least 51 per cent of the Grasberg site.
The voices of ethnically distinct Papuans, who are demanding independence from Indonesia, are not heard in discussions about Grasberg between the central government and Freeport.
Indonesian Ministry of Environment and Forestry inspector general Ilyas As’ad replied to Freeport chief executive Richard Adkerson’s criticism over the new rules.
Calling the rules “shocking and disappointing”, Adkerson, said: “Nobody could mine this ore body in consistency with these decrees. You just physically can’t do it.”
Ilyas dismissed suggestions of political motivation or attempts to pressure Freeport ahead of the divestment negotiations.
“We are only talking about environmental issues. it’s completely about the environment,” Ilyas told the media in Jakarta, 3,300km away from Grasberg.
“We have to find out what technology [can reduce the tailings]. We have to seek the way out, we won’t sacrifice everything, right, because 16,000 people are working out there,” he added.
Ilyas said inspectors had found 47 violations of environmental regulations during a visit to the site last September. He claimed that 39 issues had subsequently been addressed but “the big ones left are mostly related to tailings”.
Freeport shares accelerated their decline, losing 15 per cent in a day on Tuesday, in the heaviest fall since January 2016, making the company the worst performer on Standard and Poor’s 500 index.
Adkerson had said a deal was agreed with Indonesia in the late 1990s on how and where to dispose of the tailings while the mountainous terrain made it unachievable to find other solutions.
“It was always controversial,” but worked with “no unexpected environmental consequences,” Adkerson said.
The environmental consequences of Grasberg are significant. Picture credit: YouTube