Bambang tells Freeport to cut production for safety

Bambang tells Freeport to cut production for safety

JAKARTA (JP): Minister of Mines and Energy Susilo Bambang
Yudhoyono said on Monday copper and gold mining company PT
Freeport Indonesia must reduce output at its Grasberg mine in
Irian Jaya to prevent another landslide at its dumping site.

Bambang said the company's dumping site at Wanagon Lake was
obviously no longer capable of accommodating the waste rock
dumped by the company.

Speaking to reporters on the sidelines of a Cabinet meeting at
Bina Graha presidential office, Bambang warned there could be a
repeat of the fatal accident earlier this month unless output was
reduced.

He said detailed guidelines for the production cutback would
be determined by both his ministry and the Office of the State
Minister of Environment and the Environmental Impact Management
Agency (Bapedal).

Bambang said the government did not plan to suspend Freeport's
operation or review its contract in response to the landslide
accident.

"But Freeport Indonesia must do something about it. They may
continue their operation only if they reduce the volume of their
production," he said.

Earlier this month, a pile of overburden slid from Freeport's
dumping site into Lake Wanagon, causing a massive wave that swept
away four workers from the firm's subcontractors, PT Petrosea and
PT Graha Buana Jaya, who were working near the lake. The workers'
bodies have not been recovered. Overburden is the waste rock
removed by mining companies from the surface of mines to access
the mining products underneath.

Freeport, which currently operates at its normal production
rate of 230,000 metric tons of ore per day, has blamed the
collapse of the overburden pile on recent heavy rainfall, which
reached on average of 40 millimeters last week.

State Minister of Environment Sonny Keraf said it was the
third such accident at Freeport in recent years. In 1998, heavy
rain triggered a slide, and last March one occurred following an
earthquake. In both cases, Freeport reported no deaths or
injuries.

The government has ordered Freeport to temporarily halt
dumping its overburden into Lake Wanagon until it improves safety
measures at the site. Freeport was told to optimize its use of
its second dumping site, Qartenz, which is located southeast of
Wanagon.

Freeport has been dumping 95 percent of some 420 million tons
of solid waste it produced since 1995 in Lake Wanagon, according
to the Indonesian Forum for the Environment (Walhi).

Separately, the director general of general mining at the
Ministry of Mines and Energy, Surna Tjahja Djajadiningrat, warned
on Monday that another landslide could take place at Lake Wanagon
due to the forecast of continuing heavy rainfall in the area.

"There will be global warming or natural changes that can
result in a similar landslide in the area," he said.

He called on Freeport to study whether Lake Wanago was still
suitable to be used as its dumping site given the three recent
accidents.

PT Freeport Indonesia is 81.28 percent owned by United States
mining company Freeport McMoRan Copper & Gold. The Indonesian
government and PT Indocopper Investama Corporation each hold a
9.36 percent share.

Indocopper is 49 percent owned by Freeport McMoran and 50.48
percent by Nusamba Mineral Industries, a company linked to former
president Soeharto, while the investing public holds a 0.52
percent share. (cst)