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Freeport says to stay in Indonesia despite riots

JAKARTA: Freeport Indonesia remains committed to its mining operations in Indonesia's remote Irian Jaya province despite rioting that forced the mine to close temporarily last month, a Freeport executive said on Tuesday.

"Absolutely not," Freeport executive vice-president Paul Murphy told Reuters when asked if rioting had unnerved the firm.

"We remain committed to our operations in Irian Jaya," he said. "The March disturbances will not affect our long-term commitment in Irian Jaya."

Freeport is 82-percent owned by Freeport-McMoRan Copper and Gold of the United States. The Indonesian government and PT Indocopper Investama own nine percent each.

Irian Jaya tribesmen rampaged through the copper mining towns of Timika and Tembagapura last month attacking buildings and a petrol dump and forcing the local airport to close.

Freeport closed its mine in Tembagapura, one of the world's largest, some 3,000 km (1,870 miles) east of Jakarta, for 2-1/2 days as a precaution as tensions ran high.

The riots were apparently sparked by a road accident in which a local man was injured by a Freeport vehicle.

Activists said the riots underlined the resentment of tribespeople towards settlers from other parts of Indonesia and a clash of Stone Age-type existence with modern cultures.

When calm returned, tribespeople submitted a list of demands to Freeport calling for the scrapping of the company's security department, more jobs for Irianese and better living conditions.

A Freeport source said the company was evaluating the dismantling of its 300-strong security unit."We are in the process of studying the possibility of restructuring or eliminating the security unit," the source said.

The source said senior Indonesian government officials planned to meet Irianese this week to outline an "integrated development programme" aimed at improving their living conditions.

He said the programme would aim to ensure Irianese enjoyed the benefits of Irian's development, for instance through more scholarships for their children.

Earlier, Environment Minister Sarwono Kusumaatmadja was quoted by the official Antara news agency as saying the government planned to verify the results of Freeport's environmental audit.

The U.S. government agency, the Overseas Private Investment Corp (OPIC), cancelled Freeport's $100 million political risk insurance policy in November 1995. OPIC said in a letter to Freeport that its mining operations were causing "substantial adverse environmental impacts".

OPIC was concerned about tailings from the mine being channelled into a river, causing silt to build up downstream.

Sarwono said results of the verification would be made public this month.-Reuter