Freeport's expansion plan gets govt approval

JAKARTA (JP): The government has officially approved PT Freeport Indonesia's plan to increase its ore output to 300,000 tons per day (tpd) from the current 160,000 tpd, an official at the Ministry of Mines and Energy said on Wednesday.

Director General of Mining Rozik B. Soetjipto, said the approval was awarded to the company in a letter issued by his office dated March 12 this year, but the approval was effective today.

"PT Freeport Indonesia has agreed upon the four main requirements set in the principle permit issued by the government in April 1997," Rozik said after opening a seminar on the use of lignite.

The four requirements are an increase in royalties payable to the government, tailing management, environmental protection and slope stability.

Under its contract of work, Freeport must deliver to the government between 1.5 percent and 3.5 percent of its copper sales and 1 percent of its gold and silver royalties.

Freeport, a subsidiary of giant U.S. mining company Freeport McMoRan Copper & Gold, agreed last month to double royalties from its copper mine and triple royalties from its gold and silver mine, in return for increased ore output at its huge copper and gold mine in Grasberg, Irian Jaya.

The new royalty scheme will be backdated to Jan. 1, 1999 and effective if ore production at the Grasberg site exceeds 200,000 tpd.

The Grasberg mine is believed to contain one of the world's largest copper and gold reserves.

Rozik said Freeport had also agreed on the requirements set by the government with regard to tailing management and environmental protection.

The government requires Freeport to develop a pilot tailing management project on a 375 hectares of land around the mining site within five years.

"They have to start developing the project now, and it should be completed in five years, so that people can see it and the disappointment they have long felt is assuaged," Rozik told Antara.

He promised to keep monitoring the company's activities to ensure that it meets the requirement.

Freeport has consistently faced criticism from environmentalists and the local community during its more than 25-year operation in the province, for allegedly causing damage to the environment. (jsk)