Rio Tinto in Southeast Sulawesi

Down to Earth No. 43, November 1999

Rio Tinto, the UK-based mining giant is exploring the possibility of opening a nickel mine in Kendari district, Southeast Sulawesi. Joordan Hutagalung, an executive of PT Rio Tinto Exploration Indonesia said in July that the company had been issued a licence for survey preparations. Satellite imagery showed that the area contained nickel, copper and gold. Governor La Ode Kaimoeddin welcomed the plan, saying the provincial administration would help Rio Tinto by providing various facilities, as long as the company also paid attention to conserving the environment.

In August the environmental NGO WALHI warned that nickel mining should not destroy protected forest in the province. "We need to mine nickel deposits to increase foreign exchange reserves, but we should also preserve forests," said Alimaturahim of the WALHI's Kendari office, quoted by state news agency Antara. This report said the company was exploring around 30,000 hectares of land, but quoted the head of the local mining office as saying the nickel deposit was not inside protected forest areas. (Antara 2/7/99; 29/8/99)

Whether officially protected or not, natural forests are dwindling too fast already in the province as a result of logging, fire and conversion to plantations. The livelihoods of indigenous communities who hold customary land and resource rights are being destroyed. Along with the Canadian mining company INCO, which already holds mining contract areas in Southeast, Central and South Sulawesi (see DTE 31 & 36.) Rio Tinto, as a well-established presence in Indonesia, may feel it has the necessary influence to persuade the Indonesian government to give priority to the interests of commercial mining over community and environmental concerns.

Once again, Rio Tinto failed to meet its promise to release its Social and Environmental Report in time for the May annual general meeting in London. Several months later, shareholders were still kept in the dark about some of the giant mining company's operations in Indonesia. The 1998 Social and Environmental Report makes no mention of environmental monitoring or community relations at the Sangatta coal mine in East Kalimantan (in which Rio Tinto was a 50% partner and operator in 1998) or the Grasberg gold mine in Irian Jaya/West Papua (in which Rio Tinto has a 13% interest and funded 40% of an expansion programme intended to double production). Although Freeport McMoRan are the operators at Grasberg, Rio Tinto made much of its investment and profits in its promotional video and at the shareholders' meeting.

Rio Tinto continues to court UK-based NGOs through public relations events like the 'Environment and Social Forum' held in London in September. This was boycotted by Down to Earth and most major environment and development NGOs as there has been little evidence of improvements in Rio Tinto's behaviour towards local communities and their environments since a similar NGO consultation last year. The Kelian gold mine in East Kalimantan, (90% owned by Rio Tinto) is a case in point: pollution levels are even higher this year than last.

Figures in this year's Social and Environment Report show that water pollution from the Kelian mine doubled in 1998 compared with 1997 - when levels were already the highest of all Rio Tinto's gold mining operations world-wide. Cyanide emissions for 1998 were 914 kg, while 2.3 million tonnes of suspended solids (tailings) were dumped in the Kelian river. Rio Tinto claims that cyanide breaks down naturally in sunlight but, the more turbid the water, the less likely this is to occur. The number of incidents when manganese levels exceeded the 10gm/l environmental limit increased from 9 in 1997 to 28 in 1998, indicating that measures to tackle the serious acid drainage problem are still inadequate. The mine also used more clean river water in 1998.

Negotiations between Rio Tinto and the Kelian community over demands for compensation for land rights and human rights violations, in additional to environmental damage are continuing.

(Source: Rio Tinto 1998 Social and Environmental Report)