Rio Tinto: Grasberg Mine, Indonesia

Rio Tinto participated in the 1995-96 expansion of Freeport-McMoran Copper & Gold Inc. subsidiary, PT Freeport Indonesia’s, Grasberg mine in Papua Indonesia. Since then, the company has been entitled to 40% share of production revenues when the mine performs above 118,000 tons per day until 2021 and 40% of the mine’s total earnings after 2021. Under this agreement, Rio Tinto is also entitled to engage in and influence the mine’s operations. In 2008, Norway’s Government Pension Fund – Global excluded Rio Tinto from its investment portfolio for its participation in the Grasberg mine joint venture concluding that the company was contributing to the severe environmental damages caused by the operation.[1]

Rio Tinto reported two worker fatalities at the mine in 2012. They also reported instances of extreme violence in 2012 tied to the mine’s operations, including a series of shooting incidents that resulted in seven injuries and three fatalities in 2012. In response to these shootings, Rio Tinto vamped up the mine’s security. Both Rio Tinto and Freeport-McMoRan claim to support the Voluntary Principles on Security and Human Rights and claim to have molded the mine’s security operations around these principles. Rio Tinto further admitted to the Grasberg mine’s employment of “controlled riverine tailings disposal,” a method that is not endorsed by the World Bank as it is known to cause extreme environmental devastation. [2]

The Big Gossan Mine is located within the Grasberg Gold and Copper Mining Complex in Indonesia. Following a May 2013 collapse that reportedly killed 28 people, the Indonesian government suspended production pending an investigation. Critics claim that the parent companies, Freeport-McMoRan and Rio Tinto, should be held accountable for the accident.[3]

[1] The Government Pension Fund – Global Council on Ethics: Recommendation of 15 February 2008 (accessed 20.01.2014).

[2] Rio Tinto (2013): Non-managed operations and joint ventures: Grasberg (accessed 20.01.2014).

[3] Reprisk (2013): Top Ten Currently Most Controversial Projects, p. 4 (accessed 05.09.2013).

also visit: West Papua Daily (2014): Komnas Ham: Big Gossan Tradegy at Freeport is a serious human rights violation, 16 February, accessed on 10.04.2014

Case location
Irian Jaya Tengah
Indonesia


Affected topics
  • Environmental and Climate protection
Affected norms and standards Directly and indirectly (through shareholding) involved companies Indirect investors through shareholding

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