Grasberg mine
Encyclopedia
The Grasberg Mine is the largest gold mine and the third largest copper mine in the world. It is located in the province of Papua in Indonesia
near Puncak Jaya
, the highest mountain in Papua, and it has 19,500 employees. It is majority owned through a subsidiary by Freeport-McMoRan
, own 90.64% of PT Freeport Indonesia, the principal operating subsidiary in Indonesia, including 9.36% owned through its wholly owned subsidiary, PT Indocopper Investama. The Government of Indonesia owns the remaining 9.36% of PT Freeport Indonesia. FCX operates under an agreement with the Government of Indonesia, which allows Freeport to conduct exploration, mining and production activities in a 24,700-acre area (Block A). It also conducts exploration activities in an approximate 500,000-acre area (Block B). All of Freeport's proven and probable mineral reserves and current mining operations are located in Block A. The 2006 production was 610,800 tonnes of copper; 58,474,392 grams of gold; and 174,458,971 grams of silver.
geologist
Jean-Jacquez Dozy was a member of an expedition that scaled Mount Carstensz, the highest mountain in the Dutch East Indies
. While there, he made notes of a peculiar black rock with greenish coloring, and spent several weeks estimating the extent of the gold
and copper
deposits. In 1939, he filed a report about the Ertsberg (Dutch for "ore mountain"). He was working for Nederlandsche Nieuw Guinea Petroleum Maatschappij (NNGPM), an exploration company formed by Shell
in 1935, with 40% Standard Vacuum Oil (Mobil
) interest and 20% Far Pacific investments (Chevron
subsidiary).
In March 1959 the New York Times published an article revealing the Dutch were searching for the mountain source of alluvial gold which had been flowing into the Arafura Sea
. Geologist Forbes Wilson, working for the Freeport mining company in August 1959 after reading Dozy's 1936 report, immediately prepared to explore the Ertsberg site. In 1960 the expedition, led by Forbes Wilson and Del Flint, confirmed the huge copper deposits at the Ertsberg. It was financed by Freeport Sulphur
, whose directors included Godfrey Rockefeller, Texaco chairman Augustus Long, and Robert Lovett
.
The mine was the first under the new Suharto administration's (see New Order) 1967 foreign investment laws intended to attract foreign investment to Indonesia's then ruined economy. Built at 4,100 metres (14,000 ft) above sea level in one of West Papua's most remote areas, it involved a capital and technology input well beyond Indonesia's resources at the time. Construction cost was $US175 million, $US55 million above the original budget. A 116 km road and pipeline, port, airstrip, power plant and a new town called "Tembagapura
" (literally: copper town) were built. It officially opened in 1973 (although the first ore shipment was in December 1972), and was expanded by Ertsberg East, which opened in 1981. Steep aerial tramway
s are used to transport equipment and people. Ore is dropped 600 metres (2,000 ft) from the mine, concentrated and mixed with water to form a 60:40 slurry
. The slurry is then pumped through a 166 km pipeline through mountains, jungle and swamp to the port at Amamapare, dried and shipped. Each tonne of dry concentrate contains 317 kilograms of copper, 30 grams of gold and 30 grams of silver.
In 1977 the rebel group Free Papua Movement
attacked the mine. The group dynamited the main slurry pipe, which caused tens of millions of dollars in damage, and attacked the mine facilities. The Indonesian military reacted harshly, killing at least 800 people.
By the mid-1980s, the original mine had been largely depleted. Freeport explored for other deposits in the area. In 1988, Freeport identified reserves valued at $40 billion at Grasberg (Dutch, "Grass Mountain"), just 3 kilometres (1.9 mi) from the Ertsberg mine. The winding road to Grasberg, the H.E.A.T. (Heavy Equipment Access Trail), was estimated to require $12 million to $15 million to be built. An Indonesian road-builder who had contributed to the Ertsberg road took a bulldozer
and drove it downhill sketching the path. The road cost just $2 million when completed.
The 2003–2006 boom in copper prices increased the profitability of the mine. The extra consumption of copper for Asian electrical infrastructure overwhelmed copper supply and caused prices to increase from around $1500/ton to $8100/ton ($0.70/lb to $4.00/lb).
The workings include a very large open pit mine, an underground mine and four concentrators. The open pit mine – which forms a mile-wide crater at the surface – is a high-volume, low-cost operation, producing more than 67 million tonnes of ore and providing over 75% of the mill feed in 2006.
Ore undergoes primary crushing at the mine, before being delivered by ore passes to the mill complex for further crushing, grinding and flotation. Grasberg’s milling and concentrating complex is the largest in the world, with four crushers and two giant semi-autogenous grinding (SAG) units processing a daily average of 240,000 metric tonnes of ore in 2006.
A flotation reagent is used to separate a copper-gold concentrate from the ore. Slurry containing the copper-gold concentrate is delivered by three pipelines to the seaport of Amamapare
, over 70 miles away, where it is dewatered. Once filtered and dried, the concentrate – containing copper, gold and silver – is shipped to smelters around the world.
The facilities at the port also include a coal-fired power station, which supplies the Grasberg operations.
The concentrator's tailings
, generated at a rate of 230,000 tonnes per day, are the subject of considerable environmental concern, as they wash into the Aikwa riverine system and Arafura Sea. Some 130 square kilometres (50 sq mi) (eventually 230 square kilometres (89 sq mi)) of lowland areas along the Aikwa River, are covered by braided sedimentary channels indicative of high sediment load (similar to glacial runoff). Native fish have nearly disappeared from now-turgid waters of the Aikwa River. The overburden (700 kt/d) remains in the highlands, up to 480 m deep and covering 8 square kilometres (3 sq mi). Its acidic runoff, dissolved copper, and the finer material gets washed into the headwaters of the Wanagon River. It settles out along the river course and then into the ocean, and will continue to do so indefinitely. Freeport's official response is that overburden
is placed in the highlands as part of its Overburden Management Plan, at "sites capped with limestone
and constantly monitored. Tailings are transported to the lowlands in a designated river system. Once reaching the lowlands, they are captured in an engineered system of levees built for that purpose." Freeport states that its discharges meet regulatory requirements.
In 1995, the Overseas Private Investment Corporation
(OPIC) revoked Freeport's insurance policy for environmental violations of a sort that would not be allowed in the US. It was the first action of this sort by OPIC, and Freeport responded with a lawsuit against them. Freeport states that this revocation was based on a misunderstanding, the result of a single 1994 visit to Grasberg; the company later underwent an independent environmental audit by Dames & Moore, and passed. In April 1996, Freeport canceled its policy with the OPIC, stating that their corporate activities had outgrown the policy's limits. However, the OPIC report was later publicly released and exposed gross misrepresentations by Freeport.
. Steepening of slopes related to mining activities, as well as earthquake
s and frequent heavy rainfall, have resulted in landslide
s within the open pit mine.
While landscape reclamation projects have begun at the mine, environmental groups and local citizens are concerned with the potential for copper contamination and acid rock drainage into surrounding river systems, land surfaces, and groundwater
. Freeport argues that its actions meet industry standards, and have been approved by the requisite authorities.
Both Freeport and its partner Rio Tinto
have been excluded from the investment portfolio of The Government Pension Fund of Norway
, the world's second-largest pension fund, due to criticism over the environmental damages caused by the Grasberg mine. Stocks at a value of ca. US$ 870 million were divested from the fund as a result of the decisions.
Starting from 11 July 2009, a string of attacks commenced and lasted more than five days. A Freeport employee, Drew Grant, was one of the fatal casualties of this incident. The 29-year-old Australian Drew Grant was shot and killed while sitting in the back of a car on the way to a game of golf. Indonesian police indicated that Grant was fatally wounded due to the five shots he sustained to the neck, chest and stomach by unknown assailants using military-issue weapons. The attack also killed Freeport security guard named Markus Ratealo and a string of police officers.
On 7 April 2011, two Freeport employees were killed when the company car they were traveling in caught fire. Bullets were found inside the car, giving weight to the suspicion that the car was fired on by unknown gunmen. This incident sparked a protest by hundreds of Freeport employees concerned about the security along the jungle road leading up to the mine.
The Grasberg mine has been a frequent source of friction in Papua. Possible causes of friction are the mine's environmental impact on Papua, the perceived low share of profits going to local Papuans (Freeport's annual report shows it made $4.1billion in operating profit on revenue of $6.4billion in 2010) and the questionable legality of the payments made to Indonesian security forces for their services to guard the site.
Papua is also the home of Free Papua Movement
, a militant organisation whose purpose is to overthrow the current government of Papua and West Papua. The organisation has been blamed for some of the attacks that have happened near the mine.
Indonesia
Indonesia , officially the Republic of Indonesia , is a country in Southeast Asia and Oceania. Indonesia is an archipelago comprising approximately 13,000 islands. It has 33 provinces with over 238 million people, and is the world's fourth most populous country. Indonesia is a republic, with an...
near Puncak Jaya
Puncak Jaya
Puncak Jaya or Carstensz Pyramid is the highest summit of Mount Carstensz in the Sudirman Range of the western central highlands of Papua province, Indonesia . Other summits are East Carstensz Peak and Ngga Pulu...
, the highest mountain in Papua, and it has 19,500 employees. It is majority owned through a subsidiary by Freeport-McMoRan
Freeport-McMoRan
Freeport-McMoRan Copper & Gold Inc., often called simply Freeport, is the world's lowest-cost copper producer and one of the world's largest producers of gold...
, own 90.64% of PT Freeport Indonesia, the principal operating subsidiary in Indonesia, including 9.36% owned through its wholly owned subsidiary, PT Indocopper Investama. The Government of Indonesia owns the remaining 9.36% of PT Freeport Indonesia. FCX operates under an agreement with the Government of Indonesia, which allows Freeport to conduct exploration, mining and production activities in a 24,700-acre area (Block A). It also conducts exploration activities in an approximate 500,000-acre area (Block B). All of Freeport's proven and probable mineral reserves and current mining operations are located in Block A. The 2006 production was 610,800 tonnes of copper; 58,474,392 grams of gold; and 174,458,971 grams of silver.
History
In 1936, DutchNetherlands
The Netherlands is a constituent country of the Kingdom of the Netherlands, located mainly in North-West Europe and with several islands in the Caribbean. Mainland Netherlands borders the North Sea to the north and west, Belgium to the south, and Germany to the east, and shares maritime borders...
geologist
Geologist
A geologist is a scientist who studies the solid and liquid matter that constitutes the Earth as well as the processes and history that has shaped it. Geologists usually engage in studying geology. Geologists, studying more of an applied science than a theoretical one, must approach Geology using...
Jean-Jacquez Dozy was a member of an expedition that scaled Mount Carstensz, the highest mountain in the Dutch East Indies
Dutch East Indies
The Dutch East Indies was a Dutch colony that became modern Indonesia following World War II. It was formed from the nationalised colonies of the Dutch East India Company, which came under the administration of the Netherlands government in 1800....
. While there, he made notes of a peculiar black rock with greenish coloring, and spent several weeks estimating the extent of the gold
Gold
Gold is a chemical element with the symbol Au and an atomic number of 79. Gold is a dense, soft, shiny, malleable and ductile metal. Pure gold has a bright yellow color and luster traditionally considered attractive, which it maintains without oxidizing in air or water. Chemically, gold is a...
and copper
Copper
Copper is a chemical element with the symbol Cu and atomic number 29. It is a ductile metal with very high thermal and electrical conductivity. Pure copper is soft and malleable; an exposed surface has a reddish-orange tarnish...
deposits. In 1939, he filed a report about the Ertsberg (Dutch for "ore mountain"). He was working for Nederlandsche Nieuw Guinea Petroleum Maatschappij (NNGPM), an exploration company formed by Shell
Royal Dutch Shell
Royal Dutch Shell plc , commonly known as Shell, is a global oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the fifth-largest company in the world according to a composite measure by Forbes magazine and one of the six...
in 1935, with 40% Standard Vacuum Oil (Mobil
Mobil
Mobil, previously known as the Socony-Vacuum Oil Company, was a major American oil company which merged with Exxon in 1999 to form ExxonMobil. Today Mobil continues as a major brand name within the combined company, as well as still being a gas station sometimes paired with their own store or On...
) interest and 20% Far Pacific investments (Chevron
Chevron Corporation
Chevron Corporation is an American multinational energy corporation headquartered in San Ramon, California, United States and active in more than 180 countries. It is engaged in every aspect of the oil, gas, and geothermal energy industries, including exploration and production; refining,...
subsidiary).
In March 1959 the New York Times published an article revealing the Dutch were searching for the mountain source of alluvial gold which had been flowing into the Arafura Sea
Arafura Sea
The Arafura Sea lies west of the Pacific Ocean overlying the continental shelf between Australia and New Guinea.-Geography:The Arafura Sea is bordered by Torres Strait and through that the Coral Sea to the east, the Gulf of Carpentaria to the south, the Timor Sea to the west and the Banda and Ceram...
. Geologist Forbes Wilson, working for the Freeport mining company in August 1959 after reading Dozy's 1936 report, immediately prepared to explore the Ertsberg site. In 1960 the expedition, led by Forbes Wilson and Del Flint, confirmed the huge copper deposits at the Ertsberg. It was financed by Freeport Sulphur
Freeport-McMoRan
Freeport-McMoRan Copper & Gold Inc., often called simply Freeport, is the world's lowest-cost copper producer and one of the world's largest producers of gold...
, whose directors included Godfrey Rockefeller, Texaco chairman Augustus Long, and Robert Lovett
Robert A. Lovett
Robert Abercrombie Lovett was the fourth United States Secretary of Defense, serving in the cabinet of President Harry S. Truman from 1951 to 1953 and in this capacity, directed the Korean War. Promoted to the position from deputy secretary of defense Domhoff described Lovett as a "Cold War...
.
The mine was the first under the new Suharto administration's (see New Order) 1967 foreign investment laws intended to attract foreign investment to Indonesia's then ruined economy. Built at 4,100 metres (14,000 ft) above sea level in one of West Papua's most remote areas, it involved a capital and technology input well beyond Indonesia's resources at the time. Construction cost was $US175 million, $US55 million above the original budget. A 116 km road and pipeline, port, airstrip, power plant and a new town called "Tembagapura
Tembagapura
Tembagapura is a town built to support the Grasberg Mine in the Indonesian province of Papua. Construction of the mine and its infrastructure including the town, commenced in the late-1960s....
" (literally: copper town) were built. It officially opened in 1973 (although the first ore shipment was in December 1972), and was expanded by Ertsberg East, which opened in 1981. Steep aerial tramway
Aerial tramway
An aerial tramway , cable car , ropeway or aerial tram is a type of aerial lift which uses one or two stationary ropes for support while a third moving rope provides propulsion...
s are used to transport equipment and people. Ore is dropped 600 metres (2,000 ft) from the mine, concentrated and mixed with water to form a 60:40 slurry
Slurry
A slurry is, in general, a thick suspension of solids in a liquid.-Examples of slurries:Examples of slurries include:* Lahars* A mixture of water and cement to form concrete* A mixture of water, gelling agent, and oxidizers used as an explosive...
. The slurry is then pumped through a 166 km pipeline through mountains, jungle and swamp to the port at Amamapare, dried and shipped. Each tonne of dry concentrate contains 317 kilograms of copper, 30 grams of gold and 30 grams of silver.
In 1977 the rebel group Free Papua Movement
Free Papua Movement
The Free Papua Movement is a militant organisation established in 1965 to encourage and effect the violent overthrow of the current governments in the Papua and West Papua provinces of Indonesia, formerly known as Irian Jaya to secede from Indonesia, and to reject economic development and...
attacked the mine. The group dynamited the main slurry pipe, which caused tens of millions of dollars in damage, and attacked the mine facilities. The Indonesian military reacted harshly, killing at least 800 people.
By the mid-1980s, the original mine had been largely depleted. Freeport explored for other deposits in the area. In 1988, Freeport identified reserves valued at $40 billion at Grasberg (Dutch, "Grass Mountain"), just 3 kilometres (1.9 mi) from the Ertsberg mine. The winding road to Grasberg, the H.E.A.T. (Heavy Equipment Access Trail), was estimated to require $12 million to $15 million to be built. An Indonesian road-builder who had contributed to the Ertsberg road took a bulldozer
Bulldozer
A bulldozer is a crawler equipped with a substantial metal plate used to push large quantities of soil, sand, rubble, etc., during construction work and typically equipped at the rear with a claw-like device to loosen densely-compacted materials.Bulldozers can be found on a wide range of sites,...
and drove it downhill sketching the path. The road cost just $2 million when completed.
The 2003–2006 boom in copper prices increased the profitability of the mine. The extra consumption of copper for Asian electrical infrastructure overwhelmed copper supply and caused prices to increase from around $1500/ton to $8100/ton ($0.70/lb to $4.00/lb).
Mine workings
Ore undergoes primary crushing at the mine, before being delivered by ore passes to the mill complex for further crushing, grinding and flotation. Grasberg’s milling and concentrating complex is the largest in the world, with four crushers and two giant semi-autogenous grinding (SAG) units processing a daily average of 240,000 metric tonnes of ore in 2006.
A flotation reagent is used to separate a copper-gold concentrate from the ore. Slurry containing the copper-gold concentrate is delivered by three pipelines to the seaport of Amamapare
Amamapare
Amamapare is a port town in Papua, Indonesia.It is an important industrial centre and slurry containing copper-gold concentrate is delivered by three pipelines from Grasberg mine over 70 miles away. In Amamapare it is dewatered, filtered and dried and then shipped to smelters around the world...
, over 70 miles away, where it is dewatered. Once filtered and dried, the concentrate – containing copper, gold and silver – is shipped to smelters around the world.
The facilities at the port also include a coal-fired power station, which supplies the Grasberg operations.
Environment
Tailings
Tailings, also called mine dumps, slimes, tails, leach residue, or slickens, are the materials left over after the process of separating the valuable fraction from the uneconomic fraction of an ore...
, generated at a rate of 230,000 tonnes per day, are the subject of considerable environmental concern, as they wash into the Aikwa riverine system and Arafura Sea. Some 130 square kilometres (50 sq mi) (eventually 230 square kilometres (89 sq mi)) of lowland areas along the Aikwa River, are covered by braided sedimentary channels indicative of high sediment load (similar to glacial runoff). Native fish have nearly disappeared from now-turgid waters of the Aikwa River. The overburden (700 kt/d) remains in the highlands, up to 480 m deep and covering 8 square kilometres (3 sq mi). Its acidic runoff, dissolved copper, and the finer material gets washed into the headwaters of the Wanagon River. It settles out along the river course and then into the ocean, and will continue to do so indefinitely. Freeport's official response is that overburden
Overburden
Overburden is the material that lies above an area of economic or scientific interest in mining and archaeology; most commonly the rock, soil, and ecosystem that lies above a coal seam or ore body. It is also known as 'waste' or 'spoil'...
is placed in the highlands as part of its Overburden Management Plan, at "sites capped with limestone
Limestone
Limestone is a sedimentary rock composed largely of the minerals calcite and aragonite, which are different crystal forms of calcium carbonate . Many limestones are composed from skeletal fragments of marine organisms such as coral or foraminifera....
and constantly monitored. Tailings are transported to the lowlands in a designated river system. Once reaching the lowlands, they are captured in an engineered system of levees built for that purpose." Freeport states that its discharges meet regulatory requirements.
In 1995, the Overseas Private Investment Corporation
Overseas Private Investment Corporation
The Overseas Private Investment Corporation is an independent agency of the United States Government that mobilizes U.S. private sector investment in new and emerging markets overseas in order to support both the sustainable economic development of those markets and the creation of American jobs...
(OPIC) revoked Freeport's insurance policy for environmental violations of a sort that would not be allowed in the US. It was the first action of this sort by OPIC, and Freeport responded with a lawsuit against them. Freeport states that this revocation was based on a misunderstanding, the result of a single 1994 visit to Grasberg; the company later underwent an independent environmental audit by Dames & Moore, and passed. In April 1996, Freeport canceled its policy with the OPIC, stating that their corporate activities had outgrown the policy's limits. However, the OPIC report was later publicly released and exposed gross misrepresentations by Freeport.
Environmental damage
The mine is located within what used to be a small equatorial mountain glacierGlacier
A glacier is a large persistent body of ice that forms where the accumulation of snow exceeds its ablation over many years, often centuries. At least 0.1 km² in area and 50 m thick, but often much larger, a glacier slowly deforms and flows due to stresses induced by its weight...
. Steepening of slopes related to mining activities, as well as earthquake
Earthquake
An earthquake is the result of a sudden release of energy in the Earth's crust that creates seismic waves. The seismicity, seismism or seismic activity of an area refers to the frequency, type and size of earthquakes experienced over a period of time...
s and frequent heavy rainfall, have resulted in landslide
Landslide
A landslide or landslip is a geological phenomenon which includes a wide range of ground movement, such as rockfalls, deep failure of slopes and shallow debris flows, which can occur in offshore, coastal and onshore environments...
s within the open pit mine.
While landscape reclamation projects have begun at the mine, environmental groups and local citizens are concerned with the potential for copper contamination and acid rock drainage into surrounding river systems, land surfaces, and groundwater
Groundwater
Groundwater is water located beneath the ground surface in soil pore spaces and in the fractures of rock formations. A unit of rock or an unconsolidated deposit is called an aquifer when it can yield a usable quantity of water. The depth at which soil pore spaces or fractures and voids in rock...
. Freeport argues that its actions meet industry standards, and have been approved by the requisite authorities.
Both Freeport and its partner Rio Tinto
Rio Tinto Group
The Rio Tinto Group is a diversified, British-Australian, multinational mining and resources group with headquarters in London and Melbourne. The company was founded in 1873, when a multinational consortium of investors purchased a mine complex on the Rio Tinto river, in Huelva, Spain from the...
have been excluded from the investment portfolio of The Government Pension Fund of Norway
The Government Pension Fund of Norway
The Government Pension Fund of Norway comprises two entirely separate sovereign wealth funds owned by the Government of Norway:* The Government Pension Fund - Global...
, the world's second-largest pension fund, due to criticism over the environmental damages caused by the Grasberg mine. Stocks at a value of ca. US$ 870 million were divested from the fund as a result of the decisions.
Community Friction
Violent ambushes near the Grasberg mine have occurred as early as 2002, when three contract school teachers were killed in August 2002. Kopassus, the Indonesian Special Forces, allegedly instigated the incident.Starting from 11 July 2009, a string of attacks commenced and lasted more than five days. A Freeport employee, Drew Grant, was one of the fatal casualties of this incident. The 29-year-old Australian Drew Grant was shot and killed while sitting in the back of a car on the way to a game of golf. Indonesian police indicated that Grant was fatally wounded due to the five shots he sustained to the neck, chest and stomach by unknown assailants using military-issue weapons. The attack also killed Freeport security guard named Markus Ratealo and a string of police officers.
On 7 April 2011, two Freeport employees were killed when the company car they were traveling in caught fire. Bullets were found inside the car, giving weight to the suspicion that the car was fired on by unknown gunmen. This incident sparked a protest by hundreds of Freeport employees concerned about the security along the jungle road leading up to the mine.
The Grasberg mine has been a frequent source of friction in Papua. Possible causes of friction are the mine's environmental impact on Papua, the perceived low share of profits going to local Papuans (Freeport's annual report shows it made $4.1billion in operating profit on revenue of $6.4billion in 2010) and the questionable legality of the payments made to Indonesian security forces for their services to guard the site.
Papua is also the home of Free Papua Movement
Free Papua Movement
The Free Papua Movement is a militant organisation established in 1965 to encourage and effect the violent overthrow of the current governments in the Papua and West Papua provinces of Indonesia, formerly known as Irian Jaya to secede from Indonesia, and to reject economic development and...
, a militant organisation whose purpose is to overthrow the current government of Papua and West Papua. The organisation has been blamed for some of the attacks that have happened near the mine.
Strike
In July 2011, Papuan copper miners went on strike in support of increasing their wages up from their current rate of about $1.50 an hour. As a result of the industrial action, production at the mine halted for a week.External links
- Detailed mine information
- Photos and comments from a visit to the mine, by geology professor Kurt Friehauf
- Grasberg Open Pit, Indonesia, geology and mining technology
- Mine history
- Mine diagram dead link
- SEC 10-K Report
- "Gold Mine in the Clouds", documentary at smh.tv, Sydney Morning Herald
- Detailed 2006 report on environmental effects of mine; includes discussion of related violations of Indonesian law, POV article
- Grasberg Riverine Disposal Case Study
- Lengthy NY Times report on the mine, December 27, 2005
- "US-run mine warned by Indonesia", 23 March 2006 at BBC News
- JFK, Indonesia, CIA & Freeport Sulphur
- New York Times 1959 article