Freeport signs agreement with Indonesian tribes

Freeport signs agreement with Indonesian tribes

NEW ORLEANS (AP): Freeport-McMoRan Copper & Gold Inc. said Monday it has signed an agreement setting up a trust fund for original tribal inhabitants of the area around the Grasberg mine in Indonesia.

The agreement was signed by the New Orleans-based firm, its mining affiliate, PT Freeport Indonesia, and community leaders from indigenous groups of Irian Jaya, Indonesia, according to a Freeport-McMoran news release.

"Under the agreement, PT-FI will fund US$500,000 per year to the trust and will initially provide $2.5 million representing funding for 1996 through 2000," the news release said.

"The Amungme and Kamoro tribal leaders expressed a desire for an equity ownership in PT-FI's operations in Irian Jaya and intend to use a portion of the funds to buy shares of FCX in the public market to be owned and held by the trust."

The Grasberg mine in West Papua province, is the world's largest copper and gold mine.

Its operation has been a contentious issue for many West Papuans who have claimed they are not benefiting from mine's profits. Many have said in the past that the mine has caused extensive damage to the environment - a charge the company vehemently denied.

The signing of the agreement is the latest evidence of an improving relationship between Freeport and the tribes.

Thom Beanal, chairman of an Amungme organization known as LEMASA, was quoted in the Freeport release as saying the new agreement benefits all parties.