The
Grasberg Mine is the largest
gold mine and the third largest
copper mine in the world. It is located in the province of
Papua in
Indonesia near
Puncak Jaya, the highest mountain in Papua, and it has 19,500 employees. It is mostly owned by
Freeport-McMoRan,
which owns 90.64% of PT Freeport Indonesia, the principal operating
subsidiary in Indonesia, including 9.36% owned through its wholly owned
subsidiary, PT Indocopper Investama. The Government of Indonesia owns
the remaining 9.36% of PT Freeport Indonesia. FCX operates under an
agreement with the Government of Indonesia, which allows Freeport to
conduct exploration, mining and production activities in a 24,700-acre
area (Block A). It also conducts exploration activities in an
approximate 500,000-acre area (Block B). All of Freeport's proven and
probable mineral reserves and current mining operations are located in
Block A.
[1] The 2006 production was 610,800 tonnes of copper; 58,474,392 grams of gold; and 174,458,971 grams of silver.
History
In 1936,
Dutch geologist Jean Jacques Dozy was a member of an expedition that scaled
Mount Carstensz, the highest mountain in the
Dutch East Indies.
While there, he made notes of a peculiar black rock with greenish
coloring, and spent several weeks estimating the extent of the
gold and
copper deposits. In 1939, he filed a report about the
Ertsberg
(Dutch for "ore mountain"). He was working for Nederlandsche Nieuw
Guinea Petroleum Maatschappij (NNGPM), an exploration company formed by
Shell in 1935, with 40% Standard Vacuum Oil (
Mobil) interest and 20% Far Pacific investments (
Chevron subsidiary).
In March 1959 the
New York Times published an article
revealing the Dutch were searching for the mountain source of alluvial
gold which had been flowing into the
Arafura Sea. Geologist
Forbes Wilson,
working for the Freeport mining company in August 1959 after reading
Dozy's 1936 report, immediately prepared to explore the Ertsberg site.
In 1960 the expedition, led by Forbes Wilson and
Del Flint, confirmed the huge copper deposits at the Ertsberg. It was financed by
Freeport Sulphur, whose directors included Godfrey Rockefeller, Texaco chairman Augustus Long, and
Robert Lovett.
In 1963,
Dutch New Guinea was transferred to Indonesia, and the mine was the first under the new
Suharto administration's (see
New Order)
1967 foreign investment laws intended to attract foreign investment to
Indonesia's then ruined economy. Built at 4,100 metres (14,000 ft) above
sea level in one of West Papua's most remote areas, it involved a
capital and technology input well beyond Indonesia's resources at the
time. Construction cost was $US175 million, $US55 million above the
original budget.
[3] A 116 km road and
pipeline,
port,
airstrip,
power plant and a new town called "
Tembagapura" (literally:
copper town)
were built. It officially opened in 1973 (although the first ore
shipment was in December 1972), and was expanded by Ertsberg East, which
opened in 1981. Steep
aerial tramways
are used to transport equipment and people. Ore is dropped 600 metres
(2,000 ft) from the mine, concentrated and mixed with water to form a
60:40
slurry.
The slurry is then pumped through a 166 km pipeline through mountains,
jungle and swamp to the port at Amamapare, dried and shipped. Each tonne
of dry concentrate contains 317 kilograms of copper, 30 grams of gold
and 30 grams of silver.
In 1977 the rebel group
Free Papua Movement
attacked the mine. The group dynamited the main slurry pipe, which
caused tens of millions of dollars in damage, and attacked the mine
facilities. The Indonesian military reacted harshly, killing at least
800 people.
[4]
By the mid-1980s, the original mine had been largely depleted.
Freeport explored for other deposits in the area. In 1988, Freeport
identified reserves valued at $40 billion at
Grasberg (Dutch,
"Grass Mountain"), just 3 kilometres (1.9 miles) from the Ertsberg mine.
The winding road to Grasberg, the H.E.A.T. (Heavy Equipment Access
Trail), was estimated to require $12 million to $15 million to be built.
An Indonesian road-builder who had contributed to the Ertsberg road
took a
bulldozer and drove it downhill sketching the path. The road cost just $2 million when completed.
The 2003–2006 boom in copper prices increased the profitability of
the mine. The extra consumption of copper for Asian electrical
infrastructure overwhelmed copper supply and caused prices to increase
from around $1500/ton to $8100/ton ($0.70/lb to $4.00/lb).
Mine workings
The
Grasberg Mine complex from space.
Puncak Jaya
is the high point of the snow-covered ridge to the east of the mine.
The peak is at 4,884 metres (16,024 ft) above sea level. The rim of the
open pit is at about 4,270 metres (14,010 ft).
The workings include a very large
open pit mine, an
underground mine and four
concentrators.
The open pit mine – which forms a mile-wide crater at the surface – is a
high-volume, low-cost operation, producing more than 67 million tonnes
of ore and providing over 75% of the mill feed in 2006.
Ore undergoes primary crushing at the mine, before being delivered by
ore passes to the mill complex for further crushing, grinding and
flotation. Grasberg’s milling and concentrating complex is the largest
in the world, with four crushers and two giant
semi-autogenous grinding (SAG) units processing a daily average of 240,000 metric tonnes of ore in 2006.
A
flotation reagent is used to separate a copper-gold
concentrate from the ore. Slurry containing the copper-gold concentrate is delivered by three pipelines to the seaport of
Amamapare,
over 70 miles away, where it is dewatered. Once filtered and dried, the
concentrate – containing copper, gold and silver – is shipped to
smelters around the world.
The facilities at the port also include a coal-fired power station, which supplies the Grasberg operations.
[5]
Environment
Freeport's Contract of Work Area. Deep purple in the river is mine tailings (2003).
The concentrator's
tailings, generated at a rate of 230,000 tonnes per day, are the subject of considerable environmental concern, as they wash into the
Aikwa riverine system and Arafura Sea. Some 130 square kilometres (50 sq mi) (eventually 230 square kilometres (89 sq mi))
[6] of lowland areas along the
Aikwa River,
are covered by braided sedimentary channels indicative of high sediment
load (similar to glacial runoff). Native fish have nearly disappeared
from now-turbid waters of the Aikwa River. The overburden (700 kt/d)
[7]
remains in the highlands, up to 480 m deep and covering 8 square
kilometres (3 sq mi). Its acidic runoff, dissolved copper, and the finer
material gets washed into the headwaters of the
Wanagon River.
It settles out along the river course and then into the ocean, and will
continue to do so indefinitely. Freeport's official response is that
overburden is placed in the highlands as part of its Overburden Management Plan, at "sites capped with
limestone
and constantly monitored. Tailings are transported to the lowlands in a
designated river system. Once reaching the lowlands, they are captured
in an engineered system of levees built for that purpose." Freeport
states that its discharges meet regulatory requirements.
In 1995, the
Overseas Private Investment Corporation
(OPIC) revoked Freeport's insurance policy for environmental violations
of a sort that would not be allowed in the US. It was the first action
of this sort by OPIC, and Freeport responded with a lawsuit against
them. Freeport states that this revocation was based on a
misunderstanding, the result of a single 1994 visit to Grasberg; the
company later underwent an independent environmental audit by
Dames & Moore,
and passed. In April 1996, Freeport canceled its policy with the OPIC,
stating that their corporate activities had outgrown the policy's
limits. However, the OPIC report was later publicly released
[8]
Environmental damage
The mine is located within what used to be a small equatorial mountain
glacier.
[9][not in citation given] Steepening of slopes related to mining activities, as well as
earthquakes and frequent heavy
rainfall, have resulted in
landslides within the open pit mine.
[citation needed]
While landscape reclamation projects have begun at the mine, environmental groups and local citizens
[who?] are concerned with the potential for copper contamination and
acid mine drainage from the mine
tailings into surrounding river systems, land surfaces, and
groundwater. Freeport argues that its actions meet industry standards, and have been approved by the requisite authorities.
[citation needed]
Both Freeport and its partner
Rio Tinto have been excluded from the investment portfolio of
The Government Pension Fund of Norway,
the world's second-largest pension fund, due to criticism over the
environmental damages caused by the Grasberg mine. Stocks at a value of
ca. US$ 870 million were divested from the fund as a result of the
decisions.
[10][11]
Attacks on the mine
Violent ambushes near the Grasberg mine have occurred as early as August 2002, when three contract school teachers were killed.
Kopassus, the Indonesian Special Forces, allegedly instigated the incident.
[12][13]
A series of attacks started on 11 July 2009, and continued for more
than five days. A Freeport employee, 29-year-old Australian Drew Grant
was shot and killed while sitting in the back of a car on the way to a
game of golf. Indonesian police indicated that Grant was killed by five
shots he sustained to the neck, chest and stomach by unknown assailants
using military-issue weapons. The attack also killed Freeport security
guard Markus Ratealo and a number of police officers.
[13][14]
On 7 April 2011, two Freeport employees were killed when the company
car they were traveling in caught fire. Bullets were found inside the
car, giving weight to the suspicion that the car was fired on by unknown
gunmen. This incident sparked a protest by hundreds of Freeport
employees concerned about the security along the jungle road leading up
to the mine.
[15][16]
The Grasberg mine has been a frequent source of friction in Papua.
Possible causes of friction are the mine's environmental impact on
Papua, the perceived low share of profits going to local Papuans
(Freeport's annual report shows it made $4.1billion in operating profit
on revenue of $6.4billion in 2010) and the questionable legality of the
payments made to Indonesian security forces for their services to guard
the site.
[15]
Papua is also the home of
Free Papua Movement,
a revolutionary organisation whose purpose is to overthrow the current
government of Papua and West Papua. The organisation has been blamed for
some of the attacks that have happened near the mine.
[15]
