Govt probe blames Freeport for landslide

A massive landslide at PT Freeport Indonesia's gold and copper mine in West Papua province, which killed eight employees last month, was likely the result of management negligence, The Jakarta Post, Kompas and Investor Indonesia reported on Tuesday.

Indonesian authorities launched a probe following the Oct. 9 incident, which also injured five other employees when the wall of an open pit at the company's massive Grasberg mine at Timika collapsed.

Government investigators have learned that management of the company, which is a local unit of Louisiana-based Freeport-McMoran Copper & Gold Inc., knew the wall could collapse, but didn't take sufficient action, said Suryatono, an official at the ministry of energy and mineral resources who is leading the probe.

"There was information from one of the employees to the head of the mining operations at Freeport that there could be a landslide. But (the head) made a wrong decision," Suryatono told Dow Jones Newswires.

Employees had reported their concerns over the steep angle at which Freeport had been mining the pit, Suryatono said. The government probe is continuing, he added.

A Freeport spokesman declined to comment.

The government forced Freeport to suspend operations at part of the Grasberg mine -- the world’s largest copper and gold mine-- since the incident, and ordered the company to hire a new geological consultant to help prevent future landslides.

Freeport expects its 2003 sales volume of copper and gold to fall 10% from previous forecasts due to the stoppage, according to the company's Web site. Freeport had expected to sell 1.4 billion pounds of copper and 2.6 million ounces of gold this year before the landslide.

Strong global gold and copper prices have helped Freeport's stock in the U.S. shrug off news of the mine closure. The stock closed Friday in New York up 3.3% at $41.00 compared with around $38 just before the landslide. (*)