Irian Jaya province: An area rich in natural resources<\/p>\n
The province of Irian Jaya, the youngest province in the
\nRepublic of Indonesia, was formerly known as Irian Barat (West
\nIrian) or West New Guinea before 1973 and as Netherlands New
\nGuinea during the Dutch colonial years. With 421,981 square km,
\nthe western part of the world's second largest island, New
\nGuinea, makes up almost a quarter of Indonesia's land area but
\nonly harbors 1 percent of its over 200 million population.<\/p>\n
The population of this province is 1,649,000 (1990), with a
\ndensity of 4 people per square km (1990). The capital of Irian
\nJaya is Jayapura.<\/p>\n
Physical features of Irian Jaya: This province makes up half
\nof the entire island of Irian (New Guinea). The area is covered
\nby a mountain range with steep slopes and vast alluvial lowland
\nplains. It forms one of the last real wildernesses with 60
\npercent of its territory being covered by barely accessible
\nforests.<\/p>\n
New Guinea may almost be considered a continent. Habitats
\nrange from the hot, wet and swampy plains of the south to the
\npermanently snow- and ice-covered Puncak Jaya (5,090 meters). The
\nmajority of the island, with the exception of the south with its
\nextensive and inaccessible swamps and mangrove forests, is
\nmountainous. The highest peaks are found in the central mountain
\nchain, extending from the Vogalkop Peninsula to the Owen Stanley
\nRange in southeast Papua New Guinea. This mountain chain forms
\nthe backbone of the island and divides the island into northern
\nand southern halves.<\/p>\n
The climate in Irian Jaya is wet throughout the year with a
\nrelatively dry period between June and August. The driest part of
\nIrian Jaya is found in Merauke regency, where the only area of
\nsavanna, part of the Wasurbiru National Park, occurs. The flora
\nand, especially, the fauna of New Guinea are highly influenced by
\nAustralia. Flora in Irian Jaya's wet lowlands is a mixture of
\nAsian and Australian species, whereas at higher altitudes and in
\nthe Merauke savanna, the flora tends to be Australian.<\/p>\n
The primary products of Irian Jaya are agricultural -- food
\ncrops: rice, corn, peanuts and soybeans; commercial crops:
\ncoconuts, cloves, rubber, cacao, coffee and nutmeg; livestock:
\ncattle, buffaloes, horses, goats, sheep, pigs, and rabbits;
\nfishing -- fish products: tuna, skipjack tuna, bastern little
\ntuna, anchovy, shrimp, mullet, common carp and tilopia; fresh-
\nwater fisheries area: 255 hectares; forestry -- forest products:
\nrattan, resin, logs, sawn timber and mangrove wood; productive
\nforest area: 72,100 hectares; mining: petroleum, copper, gold,
\nsilver and LNG; handicrafts: carving and plaiting.<\/p>\n
As a whole in Irian Jaya, Mill Production of metal in 1997
\nwas: 1,208,821,000 copper pounds; 1,853,960 gold ounces;
\n3,073,800 silver ounces. Given below is a list of the companies
\nwhich are engaged in exploration or exploitation, or which are
\nconducting feasibility studies in Irian Jaya:<\/p>\n
* Aneka Tambang, PT -- Jl Letjen Simatupang, Lingkar Selatan
\nTanjung Barat, Jakarta; Darmoko Slamet (Director), phone 7891234;
\ntype of mineral: nickel.<\/p>\n
* Freeport Indonesia Company, PT -- Sampurna Plaza 5th Floor, Jl
\nHR Rasuna Said Kav x-7 No. 6, Jakarta; Hoedatmo Hoed (Director);
\nphone: 8504555, 2520727; types of mineral: copper, gold, silver.<\/p>\n
* Kepala Burung Mining, PT -- Jl Ampera Raya No. 9, Kemang,
\nJakarta Selatan; Michael J. Makenzie (Director); phone: 7892905;
\ntype of mineral: gold.<\/p>\n
* Montague Mining, PT -- Wisma Kyoei Prince, 11th Floor, Suite
\n1103, Jl Sudirman kav.3-4, Jakarta; Setiawan Djodi (Director);
\nphone: 5724135; type of mineral: gold.<\/p>\n
* Nabire Bakti Mining, PT -- Jl Ampera Raya 118, Jakarta; D.
\nLochcam PT (Director); phone: 7800394; type of mineral: gold.<\/p>\n
* Sentani Maju Minerals -- Jl Rasuna Said Kav. 600, Jakarta
\nSelatan; type of mineral: gold.<\/p>\n
Wide open opportunities for domestic and foreign investors<\/p>\n
Huge reserves of oil and natural gas have been endowed by
\nnature on archipelagic Indonesia, whose territory along the sunny
\nequator assumes a magnetic function which moves oil magnates to
\ncentripetally cast their interest at lucrative crude and gas
\nventure in this country.<\/p>\n
Until the end of 1998, few domestic and foreign enterprises
\nreportedly have made investments in such fields as oil and gas
\nprospecting, well drilling, refinery plant and gas pump pipeline
\nconstruction. This hectic work now underway is being encouraged
\neven more by the price of the nonrenewable natural fortunes
\ncurrently moving upward in the world market.<\/p>\n
This year, Indonesia has offered prospective investors
\ndifferent forms of deals regarding on-shore and off-shore crude
\nand gas explorations under the Production Sharing Contract (PSC)
\nscheme in such locations as Bunguran in the Natuna Sea, Masalima
\nin the South Sulawesi part of the Makassar Straits, Jayapura in
\nIrian Jaya (both on- and off-shore), Sabaru in South Sulawesi
\n(off-shore), Senyiur in East Kalimantan (off-shore), Pekalongan
\nin Central Java (off-shore), the northern part of Central Java
\n(off-shore) and Rangkas in West Java (off-shore).<\/p>\n
Other PCS-based explorations on offer are for Anambus and
\nTazempa in the western part of the Natuna Sea, Tapaktuan in West
\nSumatra (both on- and off-shore), Bone in South Sulawesi (off-
\nshore), Kaimana, Femin, Sabuda, and Samai in Irian Jaya (off-
\nshore).<\/p>\n
Law No. 44\/1960 assigns to Pertamina the function as the prime
\ndriller leader for crude and gas prospecting with private
\ninterests being allowed to undertake exploration on the basis of
\nthe PSC scheme, under which Pertamina will get a stake of 85
\npercent and the contractors 15 percent each. For gas, a stake of
\n70 percent will go to Pertamina and 30 percent each to the
\ncontractors.<\/p>\n
Investment in the oil and gas sector under the PSC scheme is
\non the increase as of 1997. Investment in oil and gas prospecting
\ntotaled US$4.7 billion in 1997 and rose to $6.37 billion in 1998.
\nFor well drilling, investment was registered at $1.99 billion in
\n1997 and $2.79 billion as of the second half of 1998.<\/p>\n
Mining, gold and copper deposits, lucrative fortunes to exploit<\/p>\n
In comparison with the rest of ASEAN, Indonesia is claimed to
\nbe the most potential in mineral deposits. The impact of
\ncontinent-slab frictions working by its own force in time
\nimmemorial formed archipelagic Indonesia, whose geological
\nstructure created a mineral-rich landmass extending two million
\nsquare kilometers, where a long range of active volcanic
\nactivities helped the occurrence of mineral formation into
\ndifferent kinds of sediments.<\/p>\n
This geological configuration justifies the assumption that
\nIndonesia's gold and copper deposits are the largest in the
\nworld. Copper deposits are found in Sumatra, Java, Kalimantan,
\nSulawesi and Irian Jaya.<\/p>\n
The Indonesian government fully recognizes the importance of
\nthe country's mineral wealth and the share that the mining
\nindustry could make to the national economy. Therefore, the
\ngovernment desires to encourage and promote the exploration and
\ndevelopment of its mineral resources. It has issued Contracts of
\nWork (COW) for mineral development and a Coal Contracts of Work
\nscheme which have been accepted by foreign investors worldwide as
\na reliable scheme which guarantees security for long-term
\ninvestment in the mineral and coal sectors.<\/p>\n
To stimulate foreign and domestic firms to embark on mining
\nventures in this country, the government introduced new
\nregulations which require new applicants to submit a seriousness
\nbond for every hectare of ground reserved for the contracts. The
\ndeposit of the bond, which amounts to $5 per hectare, is aimed at
\nminimizing speculation by the parties acting as a broker with the
\nmain objective of holding the reserved ground temporarily before
\ntransferring it to another party for profit.<\/p>\n
The government has introduced the Contract of Work of the 7th
\ngeneration, which was aimed to permit a more stringent monitoring
\nand control over the contract's performance throughout each stage
\nof activity. In other words, it provides flexibility with regard
\nto the time frame for the exploration stage.<\/p>\n
The directorate general of mines announced recently that the
\ntotal number of applications received for Contracts of Work of
\nthe 7th generation is 281, of which 38 were signed by the
\ncontractors and the government, 159 are still under process and
\n84 resigned. Meanwhile, Coal Contract of Work of the 3rd
\ngeneration was signed between the government and 75 domestic and
\nseven foreign investors.<\/p>\n
Irian Jaya, the wealthy island<\/p>\n
Irian Jaya is largely unexplored but deposits of oil, copper,
\nuranium and gold have been found. Other resources include rattan,
\ncopra, fish and the widest variety of timber in Indonesia. Irian
\nJaya's commercial potential has increased due to foreign
\ninvestments. Oil production in the province had begun in the
\n1930s but sizable production only began in the early 1970s near
\nSorong, on the western tip of the island.<\/p>\n
Copper became an important natural resource after large
\ndeposits were discovered by Freeport in Erstberg and Grasberg in
\nthe Jaya Wijaya mountains of Irian Jaya. PT Freeport Indonesia's
\nventure is one of the largest and most exciting mineral
\nexploration programs in Irian Jaya. The company is conducting
\nexploration activities along the \"ring of fire\" where the Indo-
\nAustralian and Pacific plates collide. This could potentially be
\none of the largest mineral zones in the world.<\/p>\n
According to Fast Facts, issued recently by PT Freeport
\nIndonesia, the company's contracts includes COW-A, which covers
\nan area of 10,000 hectares in the Grasberg area; and COW-B, which
\nis approximately 1.3 million hectares across Irian Jaya's
\nmountain range. Its sister company, PT Irja Eastern Minerals, has
\na concession covering a further 700,000 hectares in Irian Jaya
\nand is run by Freeport's Exploration Team (FET). FET comprises
\nsix major divisions: geology, logistics, drilling, government
\nrelations, safety and environment.<\/p>\n
Freeport described that their reserves total over two billion
\ntons of ore making it the world's single largest gold reserve of
\nover 55 million ounces and the world's third largest copper
\nreserve of over 20 million tons.<\/p>\n
PT Freeport's current production statistics shows that 530,000
\ntons of earth are moved per day and 127,000 tons of ore go the
\nmill each day. In addition, 1,759,000 tons of concentrate are
\nproduced per day containing over 526,000 tons of copper and over
\n1,760,000 ounces of gold.<\/p>\n
PT Freeport is the largest gold and copper producer in
\nIndonesia. The company is also the holder of a mining COW in
\nIrian Jaya. In the Grasberg area there is an estimated 108
\nmillion ounces of gold and 34 billion kg of copper.<\/p>\n
In 1997, the government issued COWs to 65 investors to carry
\nout general surveys and explorations in 17 provinces in
\nIndonesia. The investors spent between $5 million and $40 million
\ndepending on the hectares and COWs concessional area. Most of the
\nmining companies are from Singapore, the Netherlands, Australia,
\nthe United Kingdom, the United States, Hong Kong, Canada, Papua
\nNew Guinea, South Korea, the Cayman Islands and Indonesia.<\/p>\n
A mining industry observer said the newly discovered reserves
\nneed investments between $100 million and $150 million for a
\nmedium scale (10 years to 15 years) operation and over $1 billion
\nfor a large scale (about 30 years) operation.<\/p>\n
Indonesia's mining development is an integral part of its
\nnational development program with the aim of supporting the
\ncountry's industrialization by supplying the domestic industries
\nwith raw materials and energy resources; raising the state's
\ndomestic and foreign exchange earnings; and providing job
\nopportunities for the people.<\/p>\n
By virtue of government decree PP No.20\/1994, the government
\nallows state-owned mining enterprises and domestic and foreign
\nundertakings to conduct mining explorations to exploit mineral
\nresources. Private undertakings that work in this field can act
\neither as contractors or as joint-venture partners with state
\nmining firms.<\/p>\n
Currently there are three state-owned mining companies -- PT
\nTambang Timah Tbk, PT Aneka Tambang Tbk and PT Tambang Batubara.
\nIn April 1967, the government, for the first time, introduced a
\nContract of Work generation to encourage mining. At that time,
\ncopper and gold mining were the only mining ventures, operating
\nin Irian Jaya under PT Freeport Indonesia. In December 1991,
\nFreeport signed the fifth modification generation of COW which
\nincorporated the first generation COW. It essentially constitutes
\nan extension and expansion under different terms and conditions
\nof the previous contract.<\/p>\n
The COW generation for Freeport will terminate in 2003,
\nhowever, the company has been granted a new contract for another
\n30 years with a mining field possibly two times as large as the
\nfirst location where the world-class copper and gold deposits in
\nthe Grasberg mountain range were discovered.<\/p>\n
To date, 140 companies are operating under Contracts of Work
\nand Cooperation Contract for Coal, of which 102 are doing general
\nsurveys; seven, exploration activities; 14, field explorations;
\nfive, construction work and 12, production process. Another 290
\ncompanies are working under the Processing Mining Rights
\nContracts or mining authorizations issued by the Directorate
\nGeneral of Mines. Of this, 19 companies are doing general survey
\nactivities; 205, field explorations; and 56, exploitation
\noperations. Under the Coal Contract of Work, the government has
\ngranted 11 companies the first generation COW; eight companies
\nthe second generation COW; and 73 companies the third generation
\nCOW.<\/p>\n
A U.S.-Indonesian joint venture, PT Freeport Indonesia Inc. is
\ncurrently the only copper mining company in Irian Jaya, believed
\nto be holding the world richest copper ore deposits. Freeport's
\nmine reserves have been revised upward from 1.3 billion to 1.7
\nbillion tons, sufficient to support production for another 45
\nyears and capable of yielding some 38 billion pounds of copper.
\nStudies also support an increase in their production from 200,000
\ntons to 300,000 tons per day in the next few years.<\/p>\n
According to the Indonesia Source Book 1996, in 1995, copper
\nproduction reached over one billion tons with exports valued at
\n$1,537 billion. Output of copper ore and copper concentrate were
\nprojected to be in excess of 1.7 million tons by 1999. By that
\ntime also, Indonesia's first copper smelter plant which was
\nofficially inaugurated; in July 1996 had become commercial,
\nenabling Indonesia to save $270 million annually on import of
\ncopper cathode and increased its export earnings to $320 million.<\/p>\n
The smelter plant, a $700 million joint venture between
\nMitsubhisi Materials Corporation of Japan and PT Freeport
\nIndonesia Inc., was designed to produce 200,000 tons of copper
\ncathodes annually with byproducts including sulfuric acid, slag
\nand gypsum. The basic input of copper ore of some 656,000 tons
\nannually is supplied by Freeport's Irian Jaya mines.<\/p>\n
Meanwhile, some 120 contracts for gold mines had come out with
\nan output of 45,272 kilograms in 1995. In addition to copper,
\nsilver is also derived in substantial quantities from Freeport's
\ncopper mines. Freeport announced its extended reserves would
\nyield a total of 47.6 million troy ounces of gold and 108.5 troy
\nounces of silver. Indonesia has an annual gold output of
\napproximately 100 metric tons, making Indonesia the seventh
\nlargest gold producer in the world and second in Asia after
\nChina.<\/p>\n
Mineral production in Indonesia, at a glance<\/p>\n
Mining production in the last three years has been increasing,
\nhowever, several types of output are decreasing because of the
\ndownward trend in international prices.<\/p>\n
Gold production is continuing to rise with such well-known
\nconcessionaires as PT Kelian Equatorial Mining, PT Indo Muro
\nKencana, PT Aneka Tambang Tbk, PT Newmont Minahasa Raya and PT
\nBarisan Tropical Mining.<\/p>\n
Copper is produced by PT Freeport Indonesia, nickel matte is
\nproduced by PT Inco, ferro-nickel and bauxite are produced by PT
\nAneka Tambang. Tin is produced by PT Timah Tbk and PT Koba Tin.
\nCoal is produced Kitadin Corp., PT Bukit Baiduri Enterprise, PT
\nBukit Sunur and cooperatives such as KUD Usaha Karya, KUD Bersama
\nand KUD Madhuratna.<\/p>\n
The mining law -- Law No: 11,1967 -- which sets rules on
\nbasic provisions for mining, regulates all basic legal aspects
\nand technical activities in mining. Under the said law, minerals
\nare classified in three groups: Group A -- strategic minerals;
\nGroup B -- vital minerals; and Group C -- minerals not included
\nin either Group A and Group B.<\/p>\n
Mining activities in Indonesia are conducted on a long-term
\nprogram with time frames such as general surveys in one year to
\ntwo years, explorations in two years and construction in three
\nyears.<\/p>\n
So, welcome to the paradise of mining industries!<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/irian-jaya-province-an-area-rich-in-natural-resources-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }