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An American mining company has suspended work at the world’s largest gold mine in West Papua, New Guinea in a dispute with the Indonesian government.
Indonesia wants changes to the mining company Freeport-McMoRan’s business. It also wants a majority ownership share to go to Indonesians.
The company chief says Indonesia is breaking its contract in seeking the changes. And the company may seek arbitration1 in the case and bring a legal case against the government.
Freeport-MacMoRan is based in Phoenix2, Arizona. Besides operating the world’s largest gold mine, it also mines copper3 and other minerals in the Indonesian territory.
The company employs about 32,000 people in Indonesia. It has laid off 10 percent of its foreign workforce4. Observers in Indonesia are concerned that the dispute will severely5 harm the local economy, which is dependent on mining.
Concerns about the local situation are rising
West Papua has long been a troubled territory in Indonesia. It has an independence movement that has been forcibly suppressed by military action.
Mining is the main economic activity of the area.
One local newspaper editor notes that Freeport-McMoRan also provides social services to the area. Octovianus Danunan of the Radar6 Timika says, “Freeport runs two hospitals here, gives hundreds of scholarships to local students, and of course, provides jobs to thousands of Papuans.”
John Gobai is a member of the Papua parliament. He said, “These layoffs8 have eliminated the livelihoods9 of a lot of people.” He says people native to the area are suffering.
Reports from the company say 36 percent of the full-time10 employees in the area are native Papuans.
Andreas Harsono is a researcher with the activist11 group Human Rights Watch. He says Timika, where the mining facility is, is a wild area. He says violence is a possibility.
Contract of work disputed
The Indonesian government wants changes to a 30-year contract signed in 1991. The contract was signed when Suharto, a military ruler, was the president. However, relations between the government and Freeport-McMoRan have cooled under democratically elected presidents.
In 2009, the government passed a mining law requiring the company to build a $2.9 billion smelter. The facility would melt down metal ore to increase the value of exported materials. The country also wants a majority of the shares in the company to go to Indonesian ownership within 10 years.
Indonesian officials have increased pressure on the company to change its contract to a “Special Business License12” under the 2009 law. Mines and Energy Minister Ignasius Jonan has led the effort.
The contract is set to end in 2021. However, the government has passed rules in January and February increasing pressure on the company, according to a company press release.
The Indonesian Ministry13 of Energy and Mineral Resources could not be reached for comment on the issue.
The chief executive officer of the company, Richard Adkerson, has told Reuters news service that Freeport-McMoRan is committed to remaining in Indonesia. He notes that one third of West Papua’s economy comes from the Grasberg mine.
Both sides face large financial losses because of the dispute. Indonesia appears committed to the changes it is seeking.
During the dispute, Papua parliament member John Gobai says the government must do something for the local people.
“What the government really needs to think about is what compensation they can give the layoff7 victims in the present. These people are employees, but they are also citizens,” Gobai said.
Words in This Story
arbitration –n. the process of seeking judgement from a third party in a dispute between two sides
smelter –n. a facility used to melt down and remove impurities14 from metal ores
ore –n. rock that contains high concentrations of metal
license –n. a document that gives official permission to do some activity
compensation –n. something provided to make up for damage or trouble
1 arbitration | |
n.调停,仲裁 | |
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2 phoenix | |
n.凤凰,长生(不死)鸟;引申为重生 | |
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3 copper | |
n.铜;铜币;铜器;adj.铜(制)的;(紫)铜色的 | |
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4 workforce | |
n.劳动大军,劳动力 | |
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5 severely | |
adv.严格地;严厉地;非常恶劣地 | |
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6 radar | |
n.雷达,无线电探测器 | |
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7 layoff | |
n.临时解雇,操作停止,活动停止期间,失业期 | |
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8 layoffs | |
临时解雇( layoff的名词复数 ); 停工,停止活动 | |
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9 livelihoods | |
生计,谋生之道( livelihood的名词复数 ) | |
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10 full-time | |
adj.满工作日的或工作周的,全时间的 | |
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11 activist | |
n.活动分子,积极分子 | |
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12 license | |
n.执照,许可证,特许;v.许可,特许 | |
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13 ministry | |
n.(政府的)部;牧师 | |
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14 impurities | |
不纯( impurity的名词复数 ); 不洁; 淫秽; 杂质 | |
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