Rio Tinto backgrounder 8

The RIO TINTO Campaign site

BACKGROUNDER No. 8

March 1998

RIO TINTO - KELIAN MINE, KALIMANTAN, INDONESIA

Rio Tinto owns 90% of the Kelian gold mine, which is the largest of the eight gold mines owned by the company. Before moves were made to establish a major mine in the region, small scale indigenous miners worked the gold desposits in the region. By the early 1980s some 2,000 people were working in the area. However, in 1989 many areas were closed to small-scale mining and the para-military Mobile (Police) Brigades were bought in to force people to leave. Promised compensation was never fully paid to the miners who lost their livelihood. ^[1]

More substantial land acquisitions began in 1990 and a number of settlements were razed in order to construct the mine and processing plant. A total of 440 families were displaced from their homes. Fifty kilometres away, another 24 families lost their land to make way for the port to service the mine. Although some compensation was paid, there was widespread dissatisfaction because the amounts were not adequate to cover losses.

Many of the people evicted have been forced to live in shanty houses, dwellings far inferior to the houses they once lived in. Some people not only their lost their homes, but also their land, gardens, fruit trees - even the graves of their relatives. Many also lost the right to mine for gold, even in those parts of the river outside the mine area and have thus lost their livlihood. Local people report that anyone now found mining too close to the mine site risks being arrested. Small scale mining is restricted to areas where the gold deposits are very poor. Of the 800 landowners who protested against what they considered unfair compensation pay-outs, only 200 received an additional payment. Force is regularly used by the military, the Mobile Brigades and the company security forces, to `quell' community unrest over the mining operations.

Apart from the social injustices which flow from the eviction and loss of livelihood, the mine has also caused severe pollution in the area. The water in the river is unfit to drink or bathe in. People in the area have complained of severe skin rashes and eye infections after going in the river downstream from the mine. Villagers have also reported that there are no longer fish in the river. The company has admitted there is a problem with `acid mine drainage' at the site. Rio Tinto have also admitted that some areas of the mine site may not be rehabilitated due to problems associated with the disposal of the cyanide used to leach the gold from the ore body.

Rio Tinto has indicated it will close the mine in 2003. Environment and social justice groups in Indonesia have reported that the company has not set aside a bond for rehabilitating the mine site. Such a bond is standard practice for mining operations in Australia. There are very real concerns that the mine will be left with no remediation to address environmental problems - leaving a massive problem for the local people to deal with.

Footnotes

^[1] For a full report on Rio Tinto, and other Australian mining companies in Indonesia, see `Undermined' by Community Aid Abroad (Oxfam in Australia), 1998. Contact CAA on 03-9289 9444