JAKARTA (Reuters) – A state audit of operations at Indonesia’s Grasberg mine has cast a cloud over the government’s multi-billion-dollar deal to take a majority stake in the mine from Freeport McMoRan Inc and its partner Rio Tinto, according to government and company officials.
In April, in follow-up action to the audit, the environment minister issued two decrees that gave Freeport six months to overhaul management of its mine waste, or tailings, at Grasberg, the world’s second-biggest copper mine. One of the decrees said Freeport would be barred from any activities in areas that lack environmental permits.
And there may be more troubles to come for the Phoenix, Arizona-based company as the government has so far acted on only a part of the 2017 report by Indonesia’s Supreme Audit Agency (BPK) on Freeport’s decades-long operations at the mine in Indonesia’s remote easternmost province of Papua.
A letter from Freeport CEO Richard Adkerson to the environment ministry, a copy of which was reviewed by Reuters, said the decrees imposed “undue and unachievable restrictions” on Freeport’s basic operations.
In a separate letter to the government, quoted by Tempo magazine, Adkerson said: “I am deeply concerned that these actions have the potential to derail the progress that all of us have worked so hard to achieve.”