Received on Mon Apr 28 16:33:51 MES 1997
Message-Id: <199704281433.IAA29056@indopubs.com>
From: apakabar@clark.net
INDONESIA-L
Date: Mon, 28 Apr 1997 11:04:40 +1000 (EST)
From: Gerry VanKlinken
To: John MacDougall
Subject: DIGEST - After Busang, Batu Hijau
DIGEST No. 31
(Indonesian news with comment)
Title: After Busang, Batu Hijau
Date: 28 April, 1997
Indonesia's location on the volcanic Ring of Fire means it is
blessed, or cursed, with a large number of porphyry copper
deposits. Though an economic blessing, they are an environmental
calamity. The extremely low grade of their ore means dumping tens
of thousands of tons of tailings into the environment every single
day throughout the decades of a mine's life. Most such mines would
fail to satisfy environmental regulations in the West.
If Busang (Kalimantan) indeed contains much less copper and gold
than was touted, the next largest in Indonesia after Freeport
(Irian Jaya) will be Batu Hijau. Why has this deposit in Sumbawa
attracted almost no media attention?
Some figures. At 15 million ounces of gold, Batu Hijau may fall
well below Freeport's 80 million ounces, but it is still nearly
three times larger than Kelian (East Kalimantan), the largest of
another half a dozen other sizeable deposits scattered around the
country. Batu Hijau was discovered in 1990 by Newmont of the US. It
is now owned 45% by Newmont, 35% by the Japanese trading company
Sumitomo Corp, and 20% by the private Indonesian company Pukuafu
Indah. Late last year the US power and energy company Fluor Daniel
landed a contract for the bulk of the US$1.6 billion construction
costs at Batu Hijau. The mine will start production in 2000.
Besides the gold, it contains 5 million tons of copper. Each year,
it will produce almost a quarter of a million tons of copper, and
half a million ounces of gold. Five thousand will be employed
during construction, 2000 during production.
Now the environmental side. Its reserves may not match Freeport's,
but Batu Hijau's environmental impact should easily match it. In
all, 2.6 billion tons of material will be removed from the 500 m
hills that make up the Batu Hijau deposit in West Sumbawa. After 20
years there will be a crater 2.2 km across, with its floor 300
metres below sea level.
Overburden, to be left to one side, makes up 1.6 billion tons of
that. The remaining 1 billion tons will be processed. The vast bulk
of this will becomes waste tailings, produced initially at a rate
of 120 000 tons a day (similar to Freeport's today), rising to 160
000 tons a day.
Where will these mind-boggling amounts of tailings go? Simple -
into the ocean. Fluor Daniel will construct a pipeline 13 km from
the mine site to the beach, and then another out into the Indian
Ocean for 3.2 km. At a depth of 100 m it will disgorge the entire
muddy amount onto the sea floor.
It's cheap. Newmont says its production costs will be among the
lowest 25% in the world. But environmentalists will want to check
Newmont claims that from there the underwater mountain of tailings
will slide harmlessly into an oceanic trench 3400 m deep to the
south. There are international conventions about dumping wastes at
sea.
Other questions also deserve an airing. We have not yet heard the
views of locals about the project. Sumbawa Besar is by no means
sparsely populated.
Nor have we heard what Indonesian commentators think about the
composition of the mine's ownership, which excludes state
participation. Both Newmont and Sumitomo are new to Indonesia.
Newmont opened another porphyry copper mine, in Minahasa, early
last year. This is Sumitomo's first venture into mining. Sumitomo
Corp was badly hit by a copper trading scandal last year, and may
sell some of its share to subsidiary Sumitomo Metal.
Indonesian partner Pukuafu Indah, according to the tabloid Kontan,
is owned by flamboyant businessman Yusuf Merukh. Merukh is also a
partner in Busang. He is a leader in the East Java branch of the
small political party PDI, and hit headlines in recent years over
his support for attempts to remove Megawati from the leadership of
the party.
Gerry van Klinken, editor, 'Inside Indonesia' magazine, tel +61-7-
3371 3854.
----------------------------------------------------
Gerry van Klinken, Editor, Inside Indonesia magazine
Tel +61-7-3371 3854; fax 3871 2525 or 3844 1638.
Please note new email address (old one still works).
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