Freeport Indonesia no longer alone
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.