Minerals, Wealth and Progress - Mining and the Environment: From Ore to Metal - page 22

price over US$ 540 an ounce, government payments in
form of dividends, royalties, and taxes amount to US $
1 billion per annum (The Jakarta Post, April 20, 2006).
The Freeport mines contributed about 70% to the GDP
of the Province of Papua in 2006, and close to 100% of
the Timika' regency in which the mine is located. The com-
pany provides additional funds for community development
programmes to the amount of US$ 50 m per year.
The original legal agreement between Freeport and
the Indonesian Government, signed in 1967, served as a
model for all subsequent contract of work agreements.
In spite of the enormous economic benefi ts, however, the
mine continues to be the focus of environmental and

social controversy. Constrained by unsuitable topography
from developing conventional tailings disposal systems, the
mine disposes of its tailings into the natural river system.
The tailings are contained by a system of levees in the
lowlands forming a tailings deposition area covering more
than 100 km 2 . Fine tailings are also carried into the
Arafura Sea.
Many of the decisions during mine development were
made by the central government without consultation with
local government and local tribes. The central government
still holds a 10% share in the mine, while the local gov-
ernment has no share. Freeport has been accused of killing
local people, violating the rights of Indigenous Peoples and

polluting the environment. Mining, and signifi cant com-
munity funds resulting from the mining operation, have
attracted large numbers of people, and the population of
the town of Timika grew from a few thousand to more
than 60,000 over less than a decade.

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