Habibie's support for Freeport's expansion roasted

Habibie's support for Freeport's expansion roasted

JAKARTA (JP): Mining professionals and environmentalists have
panned President B.J. Habibie's support for PT Freeport Indonesia
to increase daily ore output at its Grasberg mine in Irian Jaya.

The chairman of the Indonesian Mining Professionals, Herman
Afif Kusumo, lambasted the copper and gold producer for using a
power approach to lobby the President to pressure Minister of
Mines and Energy Kuntoro Mangkusubroto into accepting its
controversial expansion plan.

"I very much support Kuntoro for his stance regarding
Freeport's expansion plan. I hope Kuntoro will be consistent and
strong enough to resist Freeport's pressure," Herman told The
Jakarta Post on Thursday.

Freeport is seeking to raise output to 300,000 metric tons.

Herman also criticized Habibie for not involving the people of
Irian Jaya in evaluating Freeport's expansion plan.

"The country is going to introduce a regulation on regency
autonomy in the near future. So, why not allow the Irian Jaya
administration to decide or take part in deciding the issue?"

Meanwhile, executive director of the Indonesian Forum for
Environment Emmy Hafild said on Wednesday Habibie's endorsement
showed he was more concerned with economic matters than the
environment.

"This further strengthens our perception that the present
government is not reform-minded, but simply a transitional
administration. They are wearing the reform clothes, but the
officials and their way of thinking are the same as that of the
previous regime."

Economist Rizal Ramli deplored Habibie's failure to use his
support for expansion as leverage for better contract terms.

"If Habibie really represents the nation's interests, he
should bargain ... but he didn't do so. Thus, you can question
whether Habibie really represents Indonesian interests."

Habibie has ordered several Cabinet members, including
Kuntoro, to assist Freeport realize its expansion according to
the schedule and plan agreed upon by the government, despite
Kuntoro's demand for further assessment of the plan.

The President gave the instruction in response to the request
from James "Jim Bob" Moffet, CEO of Freeport's holding company
Freeport McMoRan Copper & Gold of the U.S.

Moffet claimed the company had all the permits necessary for
the expansion.

Director general of mining Rozik B. Soetjipto earlier said the
company had obtained the required environmental impact analysis
certificate from the state minister of environment in December
1997, and a principal permit from his office, allowing Freeport
to conduct a feasibility study and trial operation until March
this year.

Kuntoro said he was reluctant to grant a definite permit for
the expansion plan because he wanted to ensure Freeport's
operation in Irian Jaya would help modernize the local economy.

He also doubted Freeport's technical ability to protect the
environment with its expansion.

After meeting with Habibie on Monday, Kuntoro said he would
license Freeport's expansion plan provided the company had the
technical ability to protect the environment.

Hafild doubted Freeport's ability to protect the environment
around its mining area, citing damage to the Wanagon tailing dam
last year.

"The construction of the tailing dam was weak. What will
happen if Freeport increased its output?" Hafild said.

Freeport is licensed to produce 160,000 tons of ore per day,
but it has increased its ore output to about 200,000 tons per day
as part of the trial expansion.

President of the Indonesian Mining Association Benny Wahyu
said Freeport's aggressive move to obtain a license for its
expansion plan was understandable because mining companies had to
increase output to survive amid collapsing prices of mining
products. (jsk/das)