High hopes that the world’s biggest gold mine will finally bring meaningful benefit to the community for which it has for decades been a source of contention have been deflated as negotiations hit a wall.
Freeport McMoRan Inc. (FCX) and the Indonesian government are currently hashing out the details of a long-term agreement for an extension of the company’s contract to operate the giant Grasberg gold and copper mine in Papua province, due to expire in 2021.
Freeport announced in August that it had agreed to divest a 51 percent stake in its Indonesian subsidiary, PT Freeport Indonesia (PTFI), in which it currently holds a 90.64 percent stake, following sustained pressure by the government to reform a mining sector long seen as not doing enough to benefit local communities or contribute to the national economy.
As part of broader changes to Indonesia’s mining law, the government has required that all mining firms build smelters in-country; convert their existing contracts into more flexible permits; and, for those with a foreign majority shareholder, divest a 51 percent stake in their operations to local partners within a decade of the mines coming into production.
Freeport’s announcement was cheered by Indonesians, many of whom believe the country has been getting the short end of the stick in its business dealings with foreign miners.
The indigenous inhabitants of Papua, in particular, welcomed the announcement, hoping the redrawn contract would finally address the impact of the company’s mining operations on the local community and improve their welfare.
For the rest of this article: https://news.mongabay.com/2017/10/grasberg-mines-riches-still-a-distant-glitter-for-papuan-communities/