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Timika, Papua – History is often forgotten when people discuss the fate of US-based Freeport McMoran’s copper, gold and silver mining operation in Papua. People tend to use the current situation to judge what happened in the late 1960s.
People critical of Freeport are quick to point out that the company has plundered Indonesia’s mining wealth in Papua since 1967 (or 1973, when its mines began production). They forget, however, to mention the situation at the time when Freeport entered Papua.
We need to consider at least three things about the situation when Freeport was given its mining contract of work (CoW) from the government of then newly-installed president Soeharto.
The first thing is that Indonesia was in a dire economic situation following the fall of strongman Sukarno, who brought Indonesia to its knees at the end of his two-decade-long rule.
In that context, Soeharto drafted a foreign-direct-investment law to attract badly needed investment. Freeport was the first foreign player to commit to large-scale investment in Indonesia, and the CoW it signed was the first of its kind.
The second thing that needs to be understood is that the Ertsberg mining reserve is located in a remote area of Papua, at a height of around 4,000 meters above sea level, and that 48 years ago, there was no infrastructure at all in the area now known as Mimika regency.
Freeport had to create everything from scratch, building ports and opening an 80-kilometer access road to the Ertsberg mining reserves through challenging terrain. This needed huge initial investment.
Not only that, we have also to recognize that Freeport was a pioneering mining company that rediscovered Erstberg after it was forgotten for a long time after being reported by Jean-Jacques Dozy, who found and named it Ertsberg while he was part of the Colijn expedition to Papua’s Carstenz Glacier in 1936.
After hearing of Dozy’s report, Freeport launched an expedition, led by Forbes Wilson and Del Flint, to Ertsberg in 1960, when the area was still under the control of the Netherlands. Three years later, the Netherlands handed over Papua to the UN, which later passed it over to Indonesia.
For the rest of this column, click here: http://www.thejakartapost.com/news/2015/06/22/commentary-govt-needs-maximize-benefits-freeport.html