Freeport Indonesia no longer alone
By Imanuddin
TIMIKA, Irian Jaya (JP): For more than 25 years, PT Freeport Indonesia Company was virtually the only investor in Irian Jaya, managing a highly profitable copper and gold mining operation in the province's hinterland.
The American company built its own infrastructure and facilities, constructing new settlements to house the thousands of people it brought in for its huge operation in and around Timika.
But now, with the government campaigning for investors, foreign and local, to "go east" and develop the country's eastern provinces, including Irian Jaya, Freeport is no longer alone.
Investors are slowly trickling into the province for a share of the Irian Jaya pie.
"There were almost no investors willing to put their money in Irian Jaya in the old days," President of PT Freeport Indonesia Company Hoediatmo Hoed said at the recent grand opening of the Sheraton Inn Timika in Timika.
"We built the Amamapare seaport, the Timika airport, a 110- kilometer long road, the Tembagapura city, and mining facilities in 1972," Hoediatmo recalled.
In all, Freeport invested US$176 million for the construction of the facilities and infrastructure.
That is on top of the $2.5 billion it has sunk into the mining operation since the company was granted the mining license in 1967. Its concession now covers 2.6 million hectares.
In those years, Freeport was wholly American, with all its shares owned by Freeport McMoRan Copper & Gold Co. Not until 1991, when Freeport Indonesia secured an extension of its mining license for 30 more years, did the government buy a 10 percent stake and a private local company, PT Indocopper Investama of the Bakrie Group, another 10.
With the arrival of new investors into Irian Jaya, including into Timika, Freeport can now contract out some of the non-mining work that it previously had to handle itself.
Their arrival is timely as the company is now undergoing a major expansion.
Hoediatmo said Freeport wants to refocus on its core business, the copper and gold mining operation. "Several branches and services will be more effective if they are handled by specialists in their fields," he said.
He cited as examples the management and ownership of the Amamapare seaport and the management of food provision in the mining areas, both of which have now been transferred to ALatieF Corporation.
The expansion of Freeport's operation also requires additional workers to be stationed in the area, and this means that the company needs more housing facilities for them.
He said there are now about 15,000 employees, including 1,650 Irianese, working in the mining areas.
The current community settlements, Tembagapura City, Hidden Valley Residence, and Ridge Camp, can no longer accommodate the additional workers that are coming in.
"We are working on a construction of a few thousands units of houses and also a number of apartments on a 2,000-hectare plot of land in a location temporarily called New Town," he said.
New Town, the name temporarily used while waiting for a name to be given to the settlement by President Soeharto, will include a supermarket, a recreation center, a sports center, as well as schools.
He said the construction of the town will be financed by a consortium of PT Freeport Indonesia, ALatieF Corporation and PT Puri. He declined to mention the total investment for the town.
He said the developer is currently completing the construction of the first phase of 400 houses for Freeport's employees.
"The New Town will also be open for employees from other companies and for local people," he said.