BHP Billiton holds seven mining concessions covering 355,000 hectares in Central Kalimantan. 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%.
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 years. 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 lifted. Previously, a study for WWF confirmed that BHP Billiton’s concessions overlapped with the Heart of Borneo area. 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 under ‘considerable threat from changes in land use, such as forestry and the rapid growth of palm oil plantations, plus ‘poorly managed mining practices and illegal mining’. BHP Billiton does not appear to include itself as one of these threats.
The report also says that, should the project proceed, the plan is to start by creating ‘small mines’. “By starting small, our aim is to develop further understanding of and experience in how to manage the environmental and biodiversity impacts within the region before large scale operations commence.”
From ‘UK – Indonesia coal connections’, Carolyn Marr, DOWN TO EARTH No. 85-86, August 2010, http://dte.gn.apc.org/85-86.pdf
. Kontan 24/Nov/2009 . BHP Billiton Press Release 31/Mar/20: http://www.bhpbilliton.com/bb/ investorsMedia/news/2010bhpBillitonEntersIntoAJointVentureForItsIndonesian CoalProjectmaruwai.jsp, accessed 24/Jun/10. . Reuters 27/Jan/2010 . Sunday Times 17/Jul/07: see http://www.orangutan.org.uk/latest-news/154- mining-giant-to-razeapes-forest-home %5B5%5D. http://www-personal.umich.edu/~thoumi/Research/Carbon/…/heartofborneo.pdf %5B6%5D. http://www.bhpbilliton.com/bb/sustainableDevelopment/caseStudies/2008/ turningChallengesIntoOpportunitiesMaruwaiCoalProjectsBiodiversityStrategy.jsp, accessed 24/Jun/10. The company is also involved in a controversial Australian government REDD scheme in Indonesia. See http://dte.gn.apc.org/82acl.htm