3 February 2025, Global Legal Action Network (GLAN) and the London Mining Network (LMN) issue letters of complaint to the Financial Conduct Authority (FCA) and the London Metal Exchange regarding the trade of ‘dirty copper’.
• London Metal Exchange (LME) was warned over a year ago of the risks caused by facilitating the trading of copper products from the Grasberg Mine.
• GLAN and the LMN are challenging harmful extractive mining activities under the Proceeds of Crime Act.
• If successful, the challenge could have huge implications for the international sale of metals and other raw materials that are causing environmental harm through their production.
The Financial Conduct Authority (FCA) has been alerted to the risk that copper produced at the Grasberg Mine, West Papua, Indonesia, and used in copper products traded on the London Metal Exchange, could constitute “criminal property” under the Proceeds of Crime Act. Both the London Metal Exchange and the FCA must act against the potential laundering of proceeds of crime on the world's biggest metal trading exchange.
The Grasberg Mine, situated in the rainforests of New Guinea, currently uses ‘riverine tailings disposal’ – discarding its mining waste (known as ‘tailings’) directly into nearby rivers, polluting the local area and water systems. This would qualify as a serious criminal offence if it was to occur in the UK under the Environmental Protection Act (EPA). GLAN and the LMN argue that the copper produced at Grasberg could amount to “criminal property”.
The letter sent by GLAN and the LMN reminds the London Metal Exchange of its duty under UK criminal law that as a business operating in the regulated sector, it has an obligation to report to the National Crime Agency any knowledge or suspicion of laundering of proceeds of environmental crime happening on its Exchange. Failure by the London Metal Exchange to exclude these illicit commodities could trigger liability under the Financial Services and Market Act 2000 and the Proceeds of Crime Act 2002 (POCA) and could require the Exchange to immediately identify and halt the trade of these metals.
In January 2024, GLAN and the LMN alerted the London Metal Exchange of the likelihood that the Exchange was being used to trade the proceeds of environmental crime. Despite having been aware of the risks around ‘dirty copper’ for over a year, the Exchange has resisted delisting Grasberg copper products, which are still being offered on the Exchange.
The action could have significant implications for other companies whose mining operations are linked to environmental crimes overseas, preventing them from trading on the Exchange.
GLAN lawyer Stéphanie Caligara said, "The London Metal Exchange is the world centre for metals and critical minerals trading. As humanity's reliance on metals like copper intensifies in the pursuit of the ‘Green Transition’, the Exchange has a legal duty to ensure that the metals traded on its Exchange are not produced on the backs of environmental crimes. It also has a critical role in safeguarding the integrity of global supply chains. As the Exchange’s regulator, the FCA must investigate any suspicion of laundering of proceeds of crime trading on the Exchange."
“Copper produced through severe environmental harm at the Grasberg Mine, West Papua is emblematic of this issue and the harm highlighted in this case are symptomatic of deeper systemic problems across the world. GLAN has identified similar patterns with mining corporations operating in Brazil, Peru, Guinea and the Russian Federation to name only a few, who trade their products on the London Metal Exchange. If successful, GLAN and LMN’s action might force these companies to revisit too the way they produce metals in these countries. This in turn could lead to reduced environmental harm linked to mining and drastic improvement of the livelihood of communities affected by these operations.”
Andrew Hickman, from the London Mining Network said, "For over 50 years, the Grasberg mine has extracted copper from the mountains of West Papua to the detriment of the lands and livelihoods of the people of West Papua. It is estimated that the mine dumps more than 200,000 tonnes of toxic tailings waste every day directly into the river Ajkwa. For the indigenous people living and farming nearby and for a hundred kilometres along the river and out to sea, the mine has caused untold destruction, bringing pollution, conflict and corruption into their everyday lives. The vast profits that have been made from this mine have not benefitted the West Papuans themselves. By facilitating and benefitting from these profits, the London Metal Exchange is trading in the misery and destruction of West Papua. It is time for this criminal activity to stop.”
ENDS
Global Legal Action Network (GLAN) is a U.K.-based legal non-profit organisation with offices in the U.K. and Ireland. GLAN works with affected communities to pursue innovative legal actions across borders to challenge powerful actors involved in human rights violations and systemic injustice.
Contact: Joey Greene jgreene@glanlaw.org 07349310879 for more information or media interviews with the GLAN legal team
London Mining Network (LMN) is an alliance of human rights, development, environmental and solidarity groups. We work for human rights, including the rights of Indigenous Peoples and workers; and sustainable development (development which meets the needs of the present without compromising the ability of future generations to meet their own needs) in communities around the world affected by the activities of mining companies based in or funded from London. londonminingnetwork.org
Contact: Mirko Nikolic press@londonminingnetwork.org for interviews with the LMN team
Where is the Grasberg Mine? The Grasberg Mineral District (‘GMD’) is the world’s largest proven gold reserve and the second largest proven copper reserve. The GMD is located the Mimika Regency, in West Papua, Indonesia on the Western half of the island of New Guinea. The mine sits within part of the New Guinea rainforest, the largest rainforest in the Asia-Pacific region and the third largest in the world after the Amazon and Congo, spanning 32 million hectares of old growth tropical rainforest and mangroves.
Who owns the Grasberg Mine? Opened in the 1960’s, the mine is controlled by PT Freeport Indonesia (‘PT-FI’), a mining company owned by American company Freeport McMoRan and the Indonesian Government.
What is the Proceeds of Crime Act? According to the Proceeds of Crime Act (‘POCA’), criminal conduct is conduct which either constitutes an offence in any part of the United Kingdom or would constitute such an offence if it occurred there. The Proceeds of Crime Act 2002 (Money Laundering: Exceptions to Overseas Conduct Defence) Order 2006 (‘Overseas Conduct Order 2006’) specifies that it is no defence for this conduct to be lawful overseas if it “would constitute an offence punishable by imprisonment for a maximum term in excess of 12 months in any part of the United Kingdom if it occurred there”: Article 2(2) Overseas Conduct Order 2006.
TEMPO.CO, Jakarta - Indonesia's investment minister said on Tuesday French miner Eramet (ERMT.PA) is exploring new mining areas in the South Sulawesi and Papua regions.
Rosan Roeslani on his Instagram account said he met with Eramet's Group CEO, Christel Bories, on Monday and he was updated on Eramet's investment plans.
"Eramet outlined its investment plans, including exploration of new areas in South Sulawesi and Papua as well as the development of the Responsible Green Electric Vehicle project involving various strategic partners," Rosan said.
Eramet could not immediately be reached for comment.
Eramet's main operation in Indonesia is its Weda Bay Nickel mine, located in Halmahera, North Maluku.
REUTERS
