BHP plan controversial West Papua nickel mine

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Broadcast: 29/09/2008

Reporter: Geoff Thompson and Tony Jones

BHP Billiton is on the verge of starting one of the most sensitive mining operations it has ever planned.

Transcript

TONY JONES: In West Papua, and after evading questions about the project for years, BHP Billiton is on the verge of starting one of the most sensitive mining operations it has ever planned. Gag Island in West Papua holds one of the world's richest nickel deposits. But it, and the islands around it, are ringed by what UNESCO and many marine scientists believe is the richest and most diverse coral reef system in the world.

Conservationists say BHP's disastrous environmental record at Papua New Guinea’s Ol Tedi mine should rule out any gamble with Gag Island's riches. And it's not just the potential for environmental damage that makes the gag project controversial. The island lies in West Papua, formerly Irian Jaya. The disputed Indonesian province where previous mining concessions like Freeport have become the focus for pro-independence guerrilla attacks and Indonesian human rights abuses.

Indonesia correspondent Geoff Thompson made the difficult journey to Gag Island to file this exclusive report for Lateline.

GEOFF THOMPSON: Off the remote coast of West Papua in eastern Indonesia sprawls the Raja Ampat archipelago. 610 islands spread across 50,000 square kilometres, covering an area 10 times the size of Bali. But its surface beauty simply cannot compete with the untold treasures below.

CHARLIE VERON, MARINE BIOLOGIST: There was once a time when all scientists in fact it was general knowledge, thought that the Great Barrier Reef was the centre of marine diversity. It was a very special place, but it is not the centre of marine diversity. The Raja Ampat islands of eastern Indonesia are.

JAN STEFFEN, UNESCO, JAKARTA OFFICE: If you look at it from the point of view of marine biodiversity it is what people call the bullseye on the planet. There's no richer person in terms of marine biodiversity.

GEOFF THOMPSON: The Raja Ampat archipelago sits atop the planetary short list of marine sites most deserving of World Heritage listing.

JAN STEFFEN: I think now it is basically a technical matter to get everything sorted out and to fulfil all the requirements but personally, I am quite optimistic that will happen.

GEOFF THOMPSON: But marine life isn't the only resource rich in abundance here. The other is nickel. In fact, one of the world's biggest deposits of that crucial stainless steel ingredient is locked inside Gag Island. A 56-square-kilometre land mass smack in the middle of the Raja Ampat archipelago.

And it's here that BHP Billiton has set up base, and is preparing to mine, after signing a 50-50 joint venture agreement in June with the Indonesian-owned company. For years BHP Billiton has been sitting on the controversial concession. Environmental protests saw the island reclassified as protected forest in 1999. Temporarily shelving BHP's mining plans. A regulatory shift in 2004 again cleared the way for Gag's exploitation. BHP's board has not yet approved the deal, but the company is already the best employer in Gag's only village, Gambia.

WAJU HUSEIN, COMMUNITY LEADER (translated): With the company here, even though they're still exploring, there's a huge difference in income already. When the producing starts, the company promises there'll be some sort of share of the production they get out of Gag Island, like in Freeport and such. There'll be money for the village, as well. They promised us that.

GEOFF THOMPSON: Nearly all of Gambia's point are migrants from nearby ma Luku and welcome the economic benefits they think the mine will bring. But Johanes Goram is an activist and among the Papuans disputing traditional ownership of Gag Island. He used to walk for Freeport's giant gold and copper mine, which for decades has been the flashpoint of conflict between pro-independence guerrillas and Indonesia's military.

Johanes Goram thinks stirring up of jealosies will haunt Gag Island, too.

JOHANES GORAM, NAZARETH FOUNDATION PAPUA: I do believe it is a human rights issue, because when the migrant and the local Papuan will fight or will conflict because of the issue, we are afraid that military intervention can be used to stop, to protect the company, to protect the land, to support the government.

GEOFF THOMPSON: It's extremely unlikely that BHP's nickel mine here will somehow sidestep the minefield of Papuan politics. Loud voices on the Papuan Traditional Council are already saying they are happy for the operation to proceed, but only in a Papua independent of Indonesia. But BHP can count on Indonesian Government support says the head of the country's investment board.

MUHAMMAD LUTFI, INVESTMENT BOARD CHIEF: We want to do it responsibly, but my board at least will make sure that it will happen in the near future.

GEOFF THOMPSON: BHP has refused to discuss which options are being considered to minimise the mine's impact on the surrounding reefs. The company first considered pumping hundred of thousands of tonnes of tailings onto the ocean floor, but BHP now says that option has been ruled out.