Gov't to Settle Freeport Environment Issues in Weeks: Ministry Official

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Gov't to Settle Freeport Environment Issues in Weeks: Ministry Official

By : Bernadette Christina Munthe | on 7:25 PM November 23, 2018

The Ministry of Environment and Forestry aims to resolve within two weeks environmental issues that have been holding up the government's plans to acquire a majority stake in Freeport McMoRan's Grasberg copper mine in Papua. (Antara Photo/M. Agung Rajasa)

Jakarta. The Ministry of Environment and Forestry aims to resolve within two weeks environmental issues that have been holding up the government's plans to acquire a majority stake in Freeport McMoRan's Grasberg copper mine in Papua.

The deal in which state-owned miner Inalum will acquire a 51.23 percent stake in Freeport Indonesia is expected to end years of wrangling over ownership rights to Grasberg, the world's second-biggest copper mine.

But the planned $3.85 billion series of transactions are still subject to environmental clearances and a special mining permit by the government after a 2017 audit found the mine to be in breach of environmental rules.

The environmental report said Freeport had allowed tailings from the mine to extend beyond previously agreed limits, polluting coastal areas, and that the Arizona-based company had operated in areas of Papuan forest without a permit.

Freeport has said it complies with environmental rules.

Ilyas Asaad, inspector general of the environment ministry, said on Thursday that his office had issued preliminary documents for Grasberg's environmental clearance.

The government and Freeport would finalize a tailings management "roadmap" in the coming weeks, he said.

"We are taking steps on how to manage total suspended solids, and how to use the tailings more," Ilyas told the House of Representatives.

"It's impossible to transport all the tailings, so it's best to use them to make bricks, roads [and] bridges," he said.

The government is also calculating a fine for Freeport for using forests without a proper permit, Environment Minister Siti Nurbaya Bakar said. Siti also said she had asked her office to resolve their calculations within two weeks.

There were still on three or four issues left to resolve, Siti said.

Inalum raised $4 billion in its first US dollar bond offer earlier this month to fund the Grasberg deal.

The transaction is expected to close in late 2018 or early 2019, but Freeport is "not popping champagne bottles yet," chief executive Richard Adkerson said on a conference call last month.

Reuters

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