The Kamoro indigenous people living near Poumako port, Timika have had to live with the effects of toxic tailings from the Freeport mine for decades. Now that a plan has emerged to build a smelter to process the copper and gold the mine produces, they have stated that enough is enough, and have held a sasi ritual so that no company can take any more of their ancestral land. This week, members of the Kamoro Indigenous Consultative Organisation (Lemasko) have been in Jakarta to talk about their opposition to the plans.
What exactly are the plans for the smelter and accompanying industrial zone? Here’s a background of what’s been talked about over the last few months:
A smelter is being built because of regulations issued in 2012 implementing provisions in the 2009 mining law that prohibit the export of unprocessed ore or other mine products. That meant that Freeport couldn’t export copper concentrate as it had previously been doing, but would have to process it on Indonesian soil. Freeport’s preference was to build the smelter in Gresik in East Java, adjacent to the country’s only existing copper smelter, presumably because the better infrastructure in Java would reduce costs.
However, there was a swift response from others, notably the Papua provincial government, who believed that the new development should be in Papua instead, ostensibly to contribute to the Papuan local economy. In March this year a delegation including the provincial governor went to China to meet potential investors who might build a smelter in Timika, on land near the village of Poumako, need PT Freeport Indonesia’s current export port.
However, in their enthusiasm, they forgot to ask the local Kamoro people, who hold indigenous land rights in the area. It turns out that they weren’t interested in any more industrial development that would further destroy the forest, mangroves, rivers and sea that their livelihood depends on. So on 21st March local people in the area held a sasi ritual, using their customary law to prevent anyone from using their land for industrial development.
Investors have shown interest; several names were mentioned in a government focus group discussion into accelerating the development of an industrial zone in Mimika in February 2015, as reported on the Coordinating ministry for the economy’s website:
Plans for smelter development in Papua would use SKS technology from Canada which has been developed by ENFI, a subsidiary of the Non Ferrous China Company. NFC has already built smelters in various countries and this technology is a “continuous process” system, so the heat generated can be used to generate electricity. The copper cathode produced will be sold for export, but if there is domestic demand that will be the priority.
…Aside from that, the Papua smelter company would be supported by the Investment Bank of America ((Indonesian original: Bank Investasi dari Amerika Serikat. It is unclear whether the author is referring to the Bank of America Merrill Lynch, which is the investment banking arm of the Bank of America, or some other unspecified US-based investment bank. )) , and the process of building the smelter and refinery by NFC would be financed by the Bank of China.
Source: http://www.ekon.go.id/berita/view/focus-group-discussion.1198.html#.VXgROOpXbec
Other media reports in April and May claim that the Provincial Governor Lukas Enembe has signed a cooperation agreement with a different Chinese company, Felix Gold (in some reports Golden Felix) which operates a smelter in Anhui province, China. ((Neither ‘Felix Gold’ nor ‘Golden Felix’ come up in internet searches, indicating that there are unlikely to be current operations on the ground under those names. It may be that the namesare connected with the Tongling Non-Ferrous Metals Group. Reports indicate that the delegation from Papua which visited China went to Tongling Prefecture where the TNMG is based, however it must be stressed that this is only speculation. ))
These reports are not necessarily contradictory, as the two Chinese companies have different interests – Felix Gold would want to operate the smelter whilst NFC is principally engaged in the technical and engineering aspects of smelter design. It appears that no formal contracts have been signed with either company.
Not just a smelter.
It is not only a smelter which is planned for the Kamoro people’s land, but other industrial development as well. In the report of the focus group discussion held in late February into accelerating the development of an industrial zone in Mimika, the Co-ordinating ministry for the economy notes the following:
There is a plan to develop an industrial zone in Timika, Papua, to include a smelter for PT Freeport Indonesia (fertilizer industry, cement industry), industry based on plantation products, fish-processing industry and forest products industry. In the meantime, the government needs to prepare facilities for the industrial zone development, to include:
(a) adequate infrastructure with all facilities integrated (internal roads, electricity, clean water, telecommunications, waste management, and logistics such as a dry port, seaport, airport, access road network);
(b) supporting the growth of priority industries (commercial areas, research and development, vocational training centres);
(c) supporting a quality working life (housing, education, healthcare, social, sport and recreation).Source: http://www.ekon.go.id/berita/view/focus-group-discussion.1198.html#.VXgROOpXbec
Big plans indeed.
Much of this industry is connected with the mine in some way. For many years, there has been talk of using the tailings from Freeport’s mine to make cement. The rationale for a fertilizer plant is to make use of the sulphuric acid which is a waste product from the smelter. A power station would be needed to provide electricity for the smelter.
The other proposed industrial developments are concerned with processing products of other resource industries in the area: A large oil palm plantation, PT Pusaka Agro Lestari ((Although this plantation was closed down by the Bupati in December 2014 because of the flooding it was causing and other adverse impacts for the Kamoro people, the local government’s legal position was not strong enough and the company was able to restart operations )) is operating nearby, and there are at least two more oil palm companies in Mimika Regency that are trying to obtain permits (PT Tunas Agung Sejahtera and PT Prima Sarana Graha). The Arafura Sea is also one of the richest fishing grounds in Indonesia, with several industrial fishing operations at other ports in the area.
Joko Widodo’s government is on a mission to develop Eastern Indonesia. They have issued a National Medium Term Development Plan which outlines their ambitions in the period to 2019. That plan defines a number of strategic development zones. The industrial plan for Timika is one of three new industrial areas, the others being at Bongrang on the shores of Lake Sentani near Jayapura, and Arar near Sorong in West Papua province, connected with the petrochemical and mineral processing industries. An integrated economic development zone (KAPET) in Biak (originally established in 1996) and an Economic Development Zone (KPE) in Wamena are also mentioned, as well, of course, as MIFEE, the huge industrial agriculture project in Merauke.
Powering Development
If the Timika industrial zone is actually built, the smelter, refinery, cement works and so on are all power-hungry industries. There is talk of a gas or coal fired power station being built in the industrial zone to meet those power needs. However, it is likely that this further industrialisation would be a key incentive for pushing through with the planned Urumuka hydro-power plant, which is also mentioned in the medium term development plan as part of the infrastructure needed to support the industrial zones.
This hydro-power plant, which would be on the Urumuka River as it flowed down from the highlands in Deiyai regency to the West of Timika, would generate 300MW of energy. Currently it is not planned as a dam but as a run-of-river hydro-power plant, which means there would be no storage reservoir. Nevertheless construction work could have severe impacts on Mee indigenous communities in the area and is almost certain to cause problems between the military and the Papuan population, as the Papuan conflict is particularly accentuated in the highland areas. Theproject has been planned for years, and one of the reasons it hasn’t gone ahead is because of corruption. In May the head of the Energy and Mineral Resources Board for Papua, Bangun Manurung, suggested that another reason was down to a lack of demand for the energy, but the smelter plan would solve that. Also, in February, Freeport reportedly promised $100,000 towards the costs of the hydro-power project.
Joko Widodo’s government appears to be pushing full steam ahead to bring industrial development to Papua. On 21st May this year, he signed Presidential Decision 16/2015 which created a team to study natural resource management policy to develop the Papuan economy consisting of nine ministers, the two provincial governors and heads of relevant bodies.
When he first took office, Jokowi seemed receptive to engaging with the Papuan people to try to address some of the underlying problems in Papua. In recent months he has appeared unwilling or unable to commit even to the process of dialogue which parts of the movement in Papua has been pushing for, and has instead repeatedly claimed that economic development will sort out all the problems.
However, the totally understandable opposition of the Kamoro people to a development that will further pollute their environment and make their means of livelihood even more difficult, in the same way as the Marind people opposing MIFEE plantations further down the coast, shows that this development approach, as it is currently framed, is actually just bringing new problems to Papua, rather than solving the old ones.
[This article was amended on 19.05.2015 to correct the section about the Urumuka hydro-power project. It is actually not planned as a dam, but as a run-of-river hydro-power station, which means there would be no storage reservoir]