Govt may examine Freeport pollution allegations

The Indonesian government said it?s looking into allegations of pollution at Freeport McMoRan Copper & Gold Inc.?s Grasberg mine, which produces 4 percent of the world?s copper, Bloomberg reported.

Freeport, which operates the world?s biggest gold mine and second-biggest copper mine at Grasberg, suspended operations at the ?mine for three days on Feb. 22 after demonstrators blocked the road to the site, demanding they be allowed to sift through ore in the company?s waste piles.

A further disruption may boost prices of copper, which rose to a $5,100 a metric ton on Feb. 7. Production losses at the mine in October 2003 because of two landslides resulted in global output lagging demand that year. Between the date of the accident and Jan. 29, 2004 copper in London rose 31 percent.

?We have two weeks of study to see whether they have actually? caused pollution, as alleged by some protesters, Environment Minister Rachmat Witoelar said in a televised interview Wednesday. ?We need standards set up for that.?

Calls to Siddharta Moersjid, Freeport?s senior manager for corporate communications in Jakarta, and Mindo Pangaribuan, manager for corporate communications, were not answered.

Freeport said Tuesday production at the mine in Papua province hasn?t been disrupted by this month?s protests. The company runs the mine under a 30-year contract with Indonesia that started in 1992 and can be extended as long as another 20 years. The terms can only be modified if both parties agree. Indonesia owns 9.36 percent of the mine.

Any changes made to the operating conditions ?should be agreeable to miners? so that ?we can enjoy both the benefits as well as the preservation of the environment,? Witoelar said. ?If they abide by the rules and regulations that we set up, it is okay because we welcome them here.?

If pollution is detected at Freeport, ?they have to clean this up. It?s not a matter of compensation,? he said.

Public awareness of the impact of mining on the environment has intensified in the past two years under a democratically elected government in Indonesia, the minister said.

Freeport has paid Indonesia about $1 billion mostly in tax and royalty payments. New Orleans-based Freeport spends $6 million to $7 million annually to guard the mine, Chief Executive Officer Richard Adkerson said in an interview Jan. 17.

Protests are ?part of the scenery in mining today,? Adkerson said March 1.

Newmont Mining Corp., the world?s largest gold producer, said Feb. 27 its fourth-quarter profit was cut partly by an $18 million charge to settle a pollution lawsuit connected to its now-defunct mine in Indonesia.

The company last month agreed to pay Indonesia?s government $30 million over 10 years to settle a civil suit in which villagers complained of health problems after eating fish from a bay close to the mine in North Sulawesi.

A separate criminal suit over the case is in progress in Manado, the provincial capital of North Sulawesi. Newmont has a copper mine in another province in Indonesia. (*)