Three dead in shootings near Freeport’s Grasberg mine in Indonesia

A 29-year-old Australian and father of a nine-week old infant who worked as an engineer at Freeport-McMoRan Copper & Gold‘s (FCX-N) Grasberg complex was shot dead Saturday while sitting in a car on his way to play golf, the Australian Broadcasting Corp. reported.

The killing took place on the road near MP51, just outside the mining and operations area of Freeport’s massive copper mine in Indonesia’s restive Papua province. The Australian, Drew Grant, was reportedly shot five times in the neck and chest at a range of about 25 metres, according to news reports.

A day later shots were fired at two security vehicles in the same area, killing a contract security officer who also worked at the mine and a police officer, in addition to injuring five others.

In a separate incident, gunmen shot and injured two police officers in a different area near the minesite while they were searching for suspects in the murders.

Police and members of Indonesia’s anti-terrorism unit, Detachment 88, are investigating the killings, Freeport said in a statement emailed in response to questions from The Northern Miner.

Police believe the gunmen could have been part of the separatist Free Papua Movement or OPM, Reuters news agency reported. But armed local guerrillas have allegedly denied responsibility for the killing, according to the Associated Free Press.

Freeport officials declined to comment. “This is a police matter under investigation and we are referring all questions regarding the investigation to them,” Bill Collier, vice president communications at Freeport’s offices in New Orleans, Louisiana, said.

Police have said military or police-issue weapons were used in the shootings, news agencies report. “It could well have been Indonesian security forces or someone who had access to that weaponry,” Matt Gertken, an analyst at Stratfor, a global intelligence company said in an interview.

The Grasberg mine is “a real massive draw of foreign investment and profit and that converts into tax revenues for the Indonesian government,” Gertken adds. “If the Grasberg facility is the number one taxpayer in Indonesia and generates a lot of revenue for the government, any government, no matter who is in charge, is going to try to keep a very, very strong grip on the situation there.”

Indonesia is spread across 17,500 islands. “Maintaining internal integrity has always been a rocky road to say the least,” Gertken noted. “Indonesia has therefore put its security forces into these separatist regions that have popped up all over the place, especially after the fall of President Suharto in 1998; the strongman dictator who kept all the islands and over 300 ethnic groups under his thumb in a way that separatism wasn’t as much of an issue. After he fell you had these groups in Aceh and Papua getting out there and making their voices heard. It’s a nightmare trying to keep the country intact.”

Complicating the situation in Papua is the fact that a lot of military and police operating there are also involved in sideline businesses, Gertken explains. “There is also a high-level of corruption, so that creates the framework for controversy between the different sides in addition to the inherent ethnic tensions.”

Contributing to local tension is that Freeport’s massive copper-gold mine represents inequality to many local Papuans who believe foreign investors are getting rich while they remain in poverty.

Freeport’s Grasberg mine is in the Indonesian territory of Papua, the western half of the island of New Guinea, not to be confused with the nation of Papua New Guinea, which is situated on the eastern half of the same island.

Papua encompasses the Indonesian provinces of West Irian Jaya and Papua. About half of the estimated 2.1 million inhabitants are indigenous Melanesian people (like those living in neighboring Papua New Guinea) and distinct from the Malay people of Indonesia.

A large number of Papuans have fought for independence from Indonesia since the 1960s. The Dutch turned control over their former colony to the United Nations in 1962 and Indonesia assumed control in 1963. A referendum was never held on Indonesian control over Papua. Instead, a group of about 1,000 local officials assembled in 1969 and voted in favor of merging with Indonesia (in what was called The Act of Free Choice).

Many Papuans believe the Act of Free Choice was a sham and claim delegates were hand-picked to vote in favor of Indonesian rule.

“Declassified documents released in July 2004 indicate that the United States supported Indonesia’s take over of Papua in the lead up to the 1969 Act of Free Choice even as it was understood that such a move was likely unpopular with Papuans,” Bruce Vaughn, an analyst in Southeast Asian and South Asian affairs, wrote in a 2006 report for the Congressional Research Service.

“The documents reportedly indicate that the United States estimated that between 85% and 90% of Papuans were opposed to Indonesian rule and that as a result the Indonesians were incapable of winning an open referendum at the time … Such steps were evidently considered necessary to maintain the support of Suharto’s Indonesia during the Cold War. A similar view was taken towards East Timor.”

In May 2005, Papuan People’s Civil Rights Coalition protested the U.N.’s decision to give Indonesia administrative control over Papua and rejected the Act of Free Choice.

Since the 1990s violence has mounted between Indonesian soldiers and pro-Papuan independence groups.

In 2002, two American teachers and an Indonesian companion who worked for Freeport were killed in an ambush near Timika, a city near the Freeport mine. The outcome of the investigation remains unclear.

In 2006, Anthonius Wamang, allegedly a commander of the Free Papua Movement, was sentenced to life in prison for the murders. But according to AFP, “local human rights activists have accused the Indonesian military of orchestrating the violence in order to gain greater protection payments from the mining company.

Freeport owns 90.6% of the Grasberg mine through an Indonesian subsidiary and the Indonesian government owns the remaining 9%.

The mine has the world’s largest recoverable reserves of copper and the largest gold reserves, with 35.6 billion pounds of copper and 38.5 million ounces of gold, according to Freeport’s 2008 annual report.

Last year sales reached 1.1 billion pounds of copper and 1.2 million ounces of gold at an average realized price of US$2.36 per lb. copper and US$861 per oz. gold. Freeport forecasts Indonesia sales of 1.3 billion lbs. copper and 2.1 million oz. gold for 2009.

Open-pit mining at Grasberg began in 1990 and is expected to continue until the middle of 2015, when underground operations are slated to begin.

At presstime in New York Freeport was trading at US$45.09 per share. The company has a 52-week trading range of US$15.70-$111.95 per share.