The granting of three year temporary protection visas for the 42 West
Papuan activists who arrived by boat earlier this year has severely
strained Australia’s relationship with Indonesia and also refocused
attention on the giant Grasberg gold and copper mine, which is operated
by controversial New Orleans-based mining company Freeport McMoran
Copper and Gold.
London-based Rio Tinto sold its 13 per cent stake in Freeport for $US882 million in
March 2004 but has a 40 per cent interest in Grasberg’s copper and gold reserves discovered
after 1994. The SMH quoted Macquarie Equities predicting the mine would produce $US155 million in revenue for Rio last year.
The Rio Tinto AGM is usually a volatile affair and the dual-listed
company will be fronting its Australian shareholders at the Sofitel in Melbourne
on the morning of 4 May. And guess where the West Papuan activists have
decided to settle? Yep, Melbourne. The odds must be shortening that Rio
will face plenty of curly
questions about its continuing involvement in West Papua, including from some of the activists in question.
The Rio Tinto board is used to facing lively AGMs with
environmentalists, unionists and activists lining up to have a
swing at its sprawling global empire through the first, second and
third worlds. However, the stars are really lining up this time as
the Grasberg mine remains at the heart of the West Papuan independence fight.
As Michael Pascoe pointed out
last week, BHP did the decent thing at Ok
Tedi in PNG when environmental concerns boiled over and land owners
the Victorian Supreme Court. The same can’t be said for Rio in West
Papua and it is not a good look that the CEO and CFO of Freeport have
just helped themselves
to $116 million for their fine work in creating a one-mine company
worth $US10 billion after reporting a record profit of $US995 million
Compare that with the $60 million annual community development
contribution which Freeport, Indonesia’s biggest taxpayer, makes to the
local West Papuan people. No wonder Rio snaffled former DFAT secretary
Ashton Calvert for its board as it weighs up this volatile situation.
Given the complete failure of Calvert’s DFAT to stop Saddam Hussein
pocketing $280 million from the AWB, you’d hope a few Rio shareholders
would vote against his election on 4 May.
Rio Tinto is not exactly struggling to get by with its latest $7
billion profit and market capitalisation of almost $90 billion, so it
will be interesting to hear from the board about Freeport’s on-going
negotiations with the long-suffering people of West Papua who face an
appalling environmental disaster courtesy of the Grasberg mine.
Rio will probably say that they did the decent thing in selling out of
Freeport and lament that they left plenty on the table given the 13%
stake is now worth $US1.3 billion. Sounds like a familiar tale to the
highly pressured $500 million exit from its Indonesian coal ventures in
2003 which has proved an absolute bonanza
for Aburazil Bakrie, the appropriately titled minister for social
welfare in Indonesia, who has just sold his Bumi Resources empire for
Perhaps Bakrie could redirect some of his newfound wealth to the
welfare of the people of West Papua, who still resent the way Indonesia
installed itself as the new colonial power in 1963 and then handed over
mining rights to Freeport just a couple of weeks after a corrupt fellow
called Suharto became President on March 12, 1963.