When OTML continued dumping tailings and other mine wastes into the river system, Slater and Gordon filed a class action lawsuit against the mine in 200015. The class action was settled out of court on January the 16th 200416 after BHP Billiton divested its 52% majority shares in OTML by transfer to the Papua New Guinea Sustainable Development Program Limited (PNGSDPL). The mine’s management now pays additional compensation to the affected communities through the Mine Continuation Agreement, but continues to discharge more than 100,000 tonnes of tailings and other mine wastes into local rivers daily, although a dredge in the lower Ok Tedi River removes slightly less than half of the tailings for on-land storage17.
BORNEO: Exploiting mining rights in the Heart of Borneo
BHP Billiton holds seven mining concessions covering 355,000 hectares in Central Kalimantan18. The company is also exclusive marketing agent for PT Arutmin Indonesia, which operates six mining locations in South Kalimantan.
The company announced it would sell off the Central Kalimantan project in late 2009, but reversed the decision earlier this year. Then, in March 2010, BHP Billiton announced an agreement to create a new joint venture for its Indonesian Coal Project with a subsidiary of PT Adaro Energy TBK. Adaro will hold a 25% interest in the joint venture with BHP Billiton retaining 75%19.
According to press reports, the project is expected to start commercial production in 2014, with output reaching six million tonnes of both thermal and coking coal within five years20. Allegedly high proportions of metallurgical grade coal could well be a major attraction for BHP Billiton.
What will be the impact of the project? There is scant public information about the Indigenous and local communities living in and around the concession area. Instead, the attention has been on the biodiversity impacts.
In 2007, the UK’s Sunday Times newspaper reported that BHP Billiton planned to exploit mining rights in the Heart of Borneo conservation area and that it had lobbied for the protected status of some of its concession areas to be lifted21. Previously, a study for WWF confirmed that BHP Billiton’s concessions overlapped with the Heart of Borneo area22. Meanwhile, the company’s Sustainability Report for 2008 painted a benign picture of BHP Billiton, working to protect biodiversity in its concessions areas, (without referring to the Heart of Borneo).
The company estimates that the total ‘disturbed area’ within its concessions will be around 15,000 hectares, from the total concession area of 355,000 hectares. The report states the area had been
15 Mines and Communities Online, Latest legal news on Ok Tedi, Published
1.5.2001, In Focus
Pacific Archive 19.2.2002. Accessed online December 2008 http://www.minesandcommunities.org/
16 Fitzgerald Barry, Ok Tedi class action dismissed, The Age, January 17 2004. Accessed online December 11 2008, http://www.theage.com.au/articles/2004/01/16/1073878028901.html 2004.
17 Additional sources: OTML, UNEP online, Ore Production and waste generation at Ok Tedi Mine,
accessed online 10 December 2008 http://maps.grida.no/go/graphic/ore-production-and-wastegeneration-
at-ok-tedi-mine; Reuters. 2009. Inmet Mining Announces Understanding to Exchange 18 Percent Interest in Ok; Tedi for 5 Percent Net Smelter Return Royalty. http://www.reuters.com/article/pressRelease/idUS217744+02-Jun-2009+PRN20090602
18 Kontan 24/Nov/2009
19 BHP Billiton Press Release 31/Mar/20: http://www.bhpbilliton.com/bb/investorsMedia/news/2010/
bhpBillitonEntersIntoAJointVentureForItsIndonesianCoalProjectmaruwai.jsp, accessed 24/Jun/10.
20 Reuters 27/Jan/2010
21 Sunday Times 17/Jul/07: seehttp://www.orangutan.org.uk/latest-news/154-mining-giant-to-razeapes-