When creating this series on great deposits there are various criteria that can be used to evaluate whether a deposit should be included; is it big (Escondida/Muruntau)? Is it rich (Porgera, Bellekeno)? Or is there something else, a role in mining history (Rio Tinto) or a certain something that sets the deposit apart from its peers. The Grasberg mine complex is one of the latter. It is certainly large clocking in at 3.094 Billion tonnes of 0.55 % Copper and 0.49 g/t Gold (2007, Measured and Indicated and Inferred), the location next to the highest peak in Australasia the 5030 m Puncak Jaya is one of the most striking in the industry- but there is more. It is the human story; found, lost and found again, plagued by rapacious governments, desperate insurgencies, mining tragedies, massive engineering challenges, even WW2 ghosts this is a deposit that does not just sit idly by on the tides of history but one that bends the affairs of humans to it’s own will and hits the observer with one striking fact after another.
Grasberg is a porphyry copper deposit located on the eastern portion of the island of New Guinea, high up in the Owen-Stanley range, the rugged backbone of New Guinea, 100 kilometres inland. It is located in the Indonesian province of Irian Jaya and the mining complex is owned by PT Freeport 60% (91% Owned by Freeport Mcmoran, 9% Indonesia Government) and 40% by Rio Tinto
The story of the deposit
The human side of the story is told in several stages:
The deposit was brought to the attention of the western world by a Dutch mountaineering expedition in 1936. The geologist Jean – Jacques Dozy recognized a 140 metre high mini pyramid of rich Chalcopyrite (iron-copper sulfide) mineralized rock, but remarked that “it might as well have been on the moon” for the difficulty of getting to it and developing it. He wrote up his findings and then World War 2 intervened and his report languished.
During World War 2 New Guinea was on the front lines between the Allies and the Japanese and though the Grasberg area did not see any fighting numerous plane wrecks attest to the difficulty in crossing the mountain range. The area’s isolation played a fatal role as survivors slowly died of their injuries and starved to death in the high mountains. In one case a Dutch nurse left a journal describing her slow starvation on the minesite, and she is said to haunt the lower levels of the mine.
The original report was re discovered in 1960 and the geologist Forbes Wilson, head of exploration for Freeport minerals, launched an expedition to reach the Copper monolith. He did and he brought back 300 kg of samples through the brutal jungle on the backs of porters. Though high grade (3.5% Cu), the isolation was thought to be too great and it wasn’t until 1967 that Freeport began to develop the district. This development had the side effect of bringing what was an essentially a stone age cultural complex directly into the modern industrial age, in what was probably the most rapid technological shift on record.
Of course this was also during the start
of the Suharto dictatorship in Indonesia, and the western half of the Island of New Guinea had been granted to Indonesia only in 1963, as a reward for not going communist. This sparked the Papuan independence movement, which rapidly became a full guerilla insurgency. The Grasberg mine, as the single most important resource on the Indonesian part of the island rapidly became a flashpoint, and sustained repeated attacks since the 1970’s. Their grievances boil down to the simple fact that while Papuans bear the brunt of the effects of the mine, the Indonesian government has reaped the benefits, and people from the indonesian heartland from Java get the best positions at the mine.
However the Papuans were not the only group who had their eye on Grasberg, and since the transition to democracy the arrangements between Freeport and Suharto have come under increased scrutiny, and the Indonesian government has started to demand a greater stake in ownership. First in 2009 it was a 20% stake, then it became a 51% stake. Finally in 2014 the mine was shut for 6 months when the Indonesian government demanded that Freeport build a smelter, rather than shipping concentrate. Eventually a deal was done where a 20% stake was divested, a smelter was agreed upon and the royalty on copper and gold was increased. Through it all Freeport has hung tough “playing a multidimensional chess game with the Indonesian Government”. It has every reason to with the deposit account for 45% of the company’s total revenue and cash costs for copper production hovering around $0.65 per pound net of by-product credits.
Finally, mining such as vast deposit, in such a remote area, with such complex tensions has come at a human cost as well. Sadly there have been numerous deaths at the minesite, and this has lead to numerous work stoppages as strikes, blockades and union demands for better pay to compensate for the workers risks.
From the above it should be apparent just how significant the deposit is and how it has been wrapped in human drama since inception. In my next article I will focus on the geology and engineering that makes this deposit so great.
In the Knowledge Base
- Porphyry Deposits: The World’s Largest Source of Copper
- Copper: Commodity Overview
- Minerals on the Edge – Plate Boundaries and Minerals