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Wednesday, February 08, 2006

Government may review Freeport mining contract

The government will review the mining contract of PT Freeport Indonesia if the giant gold miner is found to have polluted the environment in Papua, according to Energy and Mineral Resources Minister Purnomo Yusgiantoro.

Purnomo said Tuesday an interdepartmental team would conduct a follow-up investigation based on a recent report from the Office of the State Minister for the Environment that the local unit of the world's biggest gold and copper miner, Freeport-McMoran Copper & Gold Inc., was responsible for serious pollution in and around its mining concession. Following the investigation, the team would make recommendations for further action.

"Before we review Freeport's mining contract, we will have to see whether it has actually violated any environmental regulations. Representatives of our inspectorate general will be members of the team ...," he told reporters.
He acknowledged that should the allegations of pollution be borne out, Freeport would be at risk of having its mining contract terminated.

Purnomo explained that mining companies in Indonesia would no longer be given special treatment to such an extent that outside ministries (other than the Energy and Mineral Resources Ministry) were prevented from investigating possible irregularities or abuses.

"The mining sector is now open to all ministries. For example, taxation problems will be handled by the Ministry of Finance while environmental issues will be addressed by the State Minister for the Environment. Our ministry will no longer involve itself in such issues," he said.

The Office of the State Minister for the Environment earlier said that Freeport had broken the country's environmental legislation by illegally dumping hazardous waste in the Otomina River, thereby endangering biodiversity and public health along the length of the river.

The Otomina River flows close by the Freeport mine in resource-rich Papua province. The ministry is currently investigating the pollution allegations against Freeport to obtain conclusive evidence before taking legal action.
Freeport, however, has denied the allegations, saying it has never violated any environmental regulations during its more than three decades of operations in the province.

Rendi Akhmad Witular,
The Jakarta Post, Jakarta

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