1. I
n the second quarter of 2009 Freeport produced
403 Mlb of copper and 778,000 oz of gold,
compared with 222 Mlb and 221,000 oz in the
same period of 2008. Six months copper output
was 807 Mlb, compared with 422 Mlb the
previous year. Six months gold figures were
1,348,000 oz, compared with 467,000 oz.
This significantly better quarter was a result of
mining in a higher ore grade section of the
Grasberg open pit, including accelerated mining of
a higher grade section previously scheduled for
future periods. At the Grasberg mine, the
sequencing in mining areas with varying ore
grades causes fluctuations in the timing of ore
production, resulting in varying quarterly and
annual sales of copper and gold.
Further on up the road
The section of the road between MP 39 and MP
50 was, at the beginning, expected to be the
easiest to build. It was not to be! This was the level
area, above the swamps and not yet into the
mountains. George Mealey1 explains: “A man
could usually walk on this ground, but beneath
the superficially solid surface was a 3 m layer of
peat, dead vegetation and clay.” Forbes Wilson
(President of Freeport Minerals by the time
Ertsberg mine was commissioned) described this
ground as having “the consistency of grease.” It
could swallow bulldozers! The road crew used a
long pole to take depth soundings and built the
road where the ‘grease’ was thinnest.
Training, continuing education and
development are critical components to ensuring
long-term operating efficiency in any business.
These human resource goals become even more
important when operating in a developing region
without a long history of advanced educational
programs. Job training programs in Papua must
offer more than technical skills development.
Freeport offers more classroom and on-the-job
training hours than many universities. Training
programs range from basic literacy and
mathematics to “pre-apprenticeship” programs for
individuals with no prior career training, advanced
technical apprenticeships, career and leadership
development, and business management
programs that provide worldclass skills.
The Kuala Kencana industrial park lies north of
MP 32 (51.5 km) and one of its facilities is the
Nemangkawi Mining Institute (NMI), one of
Freeport’s many initiatives to develop indigenous
skills. It provides pre-apprentice, apprenticeship,
and advanced career development opportunities,
primarily for Papuans.
The NMI developed from a Freeport
commitment made in 1996 to the government to
double the number of Papuans in the workforce
by the year 2001 and again by 2006. Part of this
was to establish a training institute, the concept
for which was approved in mid-2003. The
program began using existing facilities and taking
From will
to skill
Continuing the series of articles on Freeport,
John Chadwick examines initiatives to
develop local people and their skills and
supply logistics for this vast operation
46 International Mining OCTOBER 2009
GREAT MINES – Grasberg, Papua Province, Indonesia
Logistics assembly area at MP38 where there are also
maintenance and construction offices and dormitories
●
INDONESIA
GRASBERG

2. apprentices in three major jobs: Heavy Duty
Mechanics, Operators and Underground Miners.
By the end of 2003, there were some 170
apprentices enrolled.
Phase 1 Nemangkawi building renovation
began in 2004, extending the existing workshop
at Nemangkawi for job training of Heavy
Equipment, Millwright, and Welding apprentices.
Freeport management also approved a further
$2.7 million to build additional facilities that
included a resource centre, classroom block, large
workshop and social facilities. Enrolment of
apprentices increased to 550. The number of job
training options offered in apprenticeship
programs was also significantly increased from
three major jobs during the first year to 18 jobs,
out of the total 33 different jobs for entry level
positions. The Adult Education Program was
established during 2004 as well.
Starting in 2004, apprentices were offered to
supporting companies
such as Trakindo
(Caterpillar’s Indonesian
dealer), Kuala Pelabuhan
Indonesia (marine
operation, road
maintenance,
transportation and
engineering
maintenance) and
Sandvik. A number of
Freeport partner
companies offer on-job
training placements to
assist with the
development of
apprentices to help gain
valuable work experience
with guidance from
competent field
supervisors.
2007 saw many
achievements and
initiatives started:
■ Underground
simulation
construction project
gets underway, part
of a $8.6 million
project including
underground equipment and expansion of the
QMS (Quality Management Services)
Underground Training school in the Highlands
■ Proceed with RTO Accreditation application.
Developing training aid to support the Heavy
Duty Mechanic competency chart – ‘Caterpillar
Five Streams’
■ Set up Caterpillar multimedia interactive
learning facilities (Freeport owns and operates
more than 600 Caterpillar machines)
■ Partnering with the prestigious Institut Teknologi
Bandung (ITB) an MBA program for senior
employees commences to offer a Business
Administration MBA for Freeport and contractor
employees
■ NMI enters into a commercial agreement to
train 19 Dayak apprentices from Kalimantan in
seven trades for BHP Billiton
■ Apprentice intake is increased to 1,350 in
support of underground expansion.
Significant achievements in 2008 saw
apprentice numbers increase to 1,500 in support
of underground expansion, while BHP Billiton
increased the number of apprentices it put
through the facilities. The QMS Big Gossan Mine
Training School was established in the Highlands
and a new workshop, third classroom block and
underground simulator were completed. NMI also
won the 2007 Asian Mining Congress award for
Best Community Development Project.
The NMI curriculum consists of 20% theoretical
course work and 80% practical training. During
the off-job training, the apprentices receive various
training, in such areas as safety, communication,
quality outcomes and the basic theories of specific
trades. They keep a log and the off-job instructor
must certify their entry with each module
completed successfully. This data is also logged by
the Training Data Group and recorded into the
Freeport Ellipse system.
Training is carried out in many places within the
complex, as appropriate, and as part of its
commitment to the development of new
employees, as well as to developing the skills of
haul truck and light vehicle operators, QMS
recently built two new facilities at the Grasberg
surface mine. These are the Haul Truck Ground
Simulator located near the Batu Bersih dump and
the LV (light vehicle) Ground Simulator, located
below Pontil Yard close to Manado dump.
“The Batu Bersih area was chosen because it is
a safe area. Training can be done there without
disrupting operational or production activities, as
recommended by Grasberg Operations. Pontil Yard
was selected because it is more time-efficient for
the training to be done at the surface mine area
rather than having to go down to MP68 for the
training. In addition, the surface contours at Pontil
48 International Mining OCTOBER 2009
GREAT MINES – Grasberg, Papua Province, Indonesia
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3. GREAT MINES – Grasberg, Papua Province, Indonesia
OCTOBER 2009 International Mining 49
Yard resembles real road conditions at the surface
mine area,” explained PTFI Senior Instructor - QMS
Surface Mine Wiyono.
The Batu Bersih Haul Truck Ground Simulator
was built in April 2009 as a refresher training
facility with assistance from QMS and aimed to
improve operators’ skills and competency in
operating heavy equipment, especially haul trucks.
The LV Ground Simulator, which was built in early
2009 May, is targeted for employees who are
planning to take their Surface Mine area driver's
license. The area is equipped with traffic lights
used at PTFI and is designed to resemble actual
road conditions, with inclines, descents,
straightaways, and turns, a roundabout, and an
area to practice parking head first and in reverse.
“Since the LV Ground Simulator was opened in
May, the number of accidents has dropped. For
example, five LV accidents occurred from January
to April, while no LV accidents were reported
during the period of May to June,” said Safety
Surface Administrator, Arie Setyawan.
Supply logistics
Major facilities along this section of the road
include the maintenance, construction offices and
dormitories at MP 38 (61.1 km at 218 m asl).
Logistics are based at MP 50, where there is also a
large fuel storage facility.
In 1992, Western Star Trucks won a significant
contract with Freeport and since then has provided
100s of trucks (which carry containers of
consumables, earthmover tyres, earthmover units
broken down into their main modules, fuel and
anything else that has to be hauled up to the
Highlands) and buses that carry personnel up the
hill. All are used as support vehicles to the
operation of the actual mine. They are not used to
haul any mined products. However they are used
in levee earthworks applications
There are many types of truck applications in
the Freeport fleet. Given the cost and constraints
of air transport for supplies, nearly all major
supplies and equipment for the mine and other
locations arrive via sea port and are hauled along
the access road via truck or tractor. The majority of
transport to the highlands is done with Western
Star tractors pulling super single SSB trailers
hauling two containers at a max weight of 35 t.
Flat beds are used for limited, specific loads
requiring special handling. Tractors are limited to a
maximum of 35 t, and lowboys are used to haul
heavier loads up the hill with pusher escorts.
The Western Star 6900XD chassis in a 4x4
configuration were used to build several different
types of bus to transport workers to and from
their jobs.
The Ajkwa Deposition Area is a large project
that is part of the overall tailings management
facility (see previous article). A series of large levees
were constructed to control the deposition of the
tailings in the Ajkwa River floodplain as the river
runs into the Arafura Sea. For this project, Western
Star heavy dump trucks were used. As the project
has proceeded, a number of the trucks have been
converted to heavy tractors to haul dump trailers
to increase payload and to provide a more
economical configuration given the significant
increase in travel distance required daily to
maintain and build up these levee banks.
Various Western Star and Iveco truck chassis
configurations are used for varied applications
such as: airport re-fuelers, water tankers, tyre
handlers, lube trucks, garbage compactors,
garbage roll on-roll off units, fuel trucks, fire
trucks, Altec man lift, boom truck, waste oil
tankers, dump truck, mixer, ANFO trucks and
utility service trucks.
Given the remoteness of this mine site and the
difficulties supporting such a large fleet, and one
that must have a very high availability, simplicity of
specification and also commonality are two of the
biggest key drivers to providing a product that
provides ease of maintenance and is devoid of
complexity to allow the provision of an ample
spare parts backup.
Papuan well being
Lembaga Pengembangan Masyarakat Amungme
Kamoro (LPMAK – the Amungme and Kamoro
Community Development Organisation), is a non-
profit organisation aiming to improve quality of life
and human resources for the seven Tribes
Tractors are limited to a maximum of 35 t, and
lowboys are used to haul heavier loads up the hill
with pusher escorts

4. (Amungme, Kamoro, Nduga, Dani, Damal, Moni,
Mee) of Mimika Regency through development
programs in education, health and economic
development, and also supports activities
implemented by traditional and religious
organisations. A partner of Freeport, LPMAK
manages and monitors the
Freeport community
development partnership fund,
which is used to develop and support the local
community.
The health and wellbeing of the local
community in Papua is a primary concern for
Freeport and a major component of its community
development strategy. One of the most important
positive impacts from the mining operation’s
presence in Papua has been the provision of
medical services and support for health initiatives
carried out through partnerships with the Health
Bureau of LPMAK and the government health
agency. IM
References
1. George A. Mealey, Grasberg: Mining the richest and
most remote deposit of copper and gold in the world, in
the mountains of Irian Jaya, Indonesia. Published by
Freeport-McMoran Copper & Gold.
For more on the great achievements of
Freeport Indonesia, this series of articles
started in August 2009 and there has been an
article on aspects of this operation published
every month since.
50 International Mining OCTOBER 2009
GREAT MINES – Grasberg, Papua Province, Indonesia
Through the partnerships, Freeport
funds two fully operational hospitals
and seven primary health centres,
which provide outpatient care and
consultations totalling between
150,000 and 200,000 patient visits
and inpatient care to more than
10,000 hospital patients each year
PROJECT HISTORY
1936 Colijn expedition, including Jean-Jacques Dozy (credited with the initial discovery), is the first outside group to reach the Jayawijaya mountain glacier and discover Ertsberg.
1960 Freeport expedition, led by Forbes Wilson & Del Flint, explores Ertsberg.
1963 The Dutch transfer Netherlands New Guinea to the United Nations, who in turn delivers it to Indonesia. Mining project plans are shelved due to the policies of the Sukarno
regime.
1966 President Sukarno delegates full powers to General Suharto following an attempted communist coup in September 1965. A new government is formed which encourages
private investments and other economic reform measures. Freeport is invited to Jakarta for initial discussions regarding a mining contract for Ertsberg.
1967 The 30-year Contract of Work (CoW) is signed, making PT Freeport Indonesia (Freeport) the exclusive mining contractor within an Ertsberg-centred 10 km square. Exploration
drilling begins at the Ertsberg.
1969 Long-term sales contracts and project financing agreements negotiated. Feasibility study completed and approved.
1970 Full-scale project construction begins.
1972 The first trial shipment of Ertsberg copper concentrate is exported.
1973 The project is dedicated, and the townsite is named Tembagapura (Coppertown). The Ertsberg project is operational.
1975 Exploration work begins on the underground Gunung Bijih Timur (GBT or Ertsberg East) copper deposit.
1976 Government of Indonesia purchases 8.5% of Freeport’s shares from Freeport Minerals Co and other investors.
1978 The feasibility study for the GBT underground mine project is approved.
1981 GBT underground mine becomes operational.
1985 Additional underground copper deposits discovered under the GBT underground mine.
1987 After a series of small expansions, average production increased to 16,400 t/d, twice that originally planned in 1967. Reserves total 100 Mt.
1988 Grasberg deposit discovered, doubling total reserves to 200 Mt.
1989 The expansion to 32,000 t/d is approved, and the study to expand to 52,000 t/d is completed. Permit to explore an additional 2.47 Mha granted by the Government of
Indonesia.
1990 Construction work continues on expansion to 52,000 t/d.
1991 New CoW with a 30-year term and two 10-year extensions is signed with the Government of Indonesia. By year-end, reserves total almost 770 Mt.
1992 Study to expand to 90,000 t/d is approved. With production averaging 58,000 t/d, work continues to increase capacity to 66,000 t/d.
1993 Freeport privatises certain non-mining assets. Expansion to 115,000 t/d is approved. FCX acquires RTM (smelter in Spain). At year-end, reserves total almost 1,100 Mt.
1994 Freeport’s 160K (160,000 t/d) Environmental Impact Study approved. Gresik copper smelter joint venture, PT Smelting, is announced.
1995 Freeport signs alliance with Rio Tinto. A new lowlands town, Kuala Kencana, is dedicated. With the #3 Concentrator, expansion to a higher-than-planned 125,000 t/d is
completed ahead of schedule and within budget. Exploration identifies new areas of potentially significant mineralisation, the ‘Golden Triangle’. The addition of Grasberg
underground increases reserves to 1,900 Mt by year-end.

5. GREAT MINES – Grasberg, Papua Province, Indonesia
OCTOBER 2009 International Mining 51
1996 Exploration efforts yield excellent results with addition of Kucing Liar reserves; at year-end, reserves total over 2,000 Mt. Freeport begins participating in Government’s Integrated
Timika Development Plan, providing 1% of its annual revenue. Freeport undergoes voluntary social & environmental audits with positive results. Commitment to construct
facilities for Government of Indonesia provides for enhanced security for personnel and operations. #4 Concentrator expansion is approved.
1997 Labat-Anderson Social Audit is submitted to Freeport and Ministry of Environment, and FFIJD administration is revised to be more responsive to developmental needs in the
villages. Freeport receives permits for expansion of up to 300,000 t/d. Work continues on #4 Concentrator expansion. Reserve additions at year-end are 2.6 x copper production
and 3 x gold production in 1997, primarily with additions from Kucing Liar.
1998 PT Smelting, 25%-owned by Freeport, begins operations in East Java, Indonesia. Freeport provides all of its concentrate requirements. #4 Concentrator expansion is completed
and operational. Freeport implements ‘Hunker Down & Go’ operating program in the low commodity price environment, averaging over 196,000 t/d with record metal
production and low net cash production costs. Significant additions to reserves at year-end from DOZ and Kucing Liar increase total reserves to almost 2,500 Mt.
1999 Montgomery-Watson Environmental Audit completed, finding the environmental management systems developed and implemented by Freeport to be “exemplary and a
showcase for the mining industry.” Record metal production and unit cash costs set by the operations. DOZ underground project, 25,000 t/d, is approved and initiated.
2000 MOU on socio-economic resources, human rights, land rights, and environmental rights announced by leaders of LEMASA (Amungme people’s organisation), LEMASKO
(Kamoro people’s organisation) and Freeport. DOZ underground mine development begins. Record copper production of over 1,640 Mlb of copper.
2001 FCX and Freeport sign a special voluntary Trust Fund agreement with the Amungme and Kamoro villagers living near the mining operations, providing an initial $2.5 million and
currently $1 million each year. Record mill rate of almost 238,000 t/d with record annual gold production of nearly 3.5 Moz.
2002 Record copper production of over 1,800 Mlb of copper. DOZ underground mine reaches 25,000 t/d sustainable production. PTFI submits to the Government of Indonesia a
thorough Environmental Risk Assessment of the tailings management system, which determined that the environmental impacts were consistent with those anticipated by the
1997 AMDAL, approved by the Government.
2003 DOZ expansion to 35,000 t/d approved and completed. Net cash productions costs average a record net credit of $0.02/lb of copper.
2004 Clean-up activities in Grasberg open pit completed after slope failure, and normal operations resumed with mining in the higher-grade portions of the Grasberg mine. DOZ
operated at 43,600 t/d, above design-capacity of 35,000 t/d; expansion to 50,000 t/d is approved.
2005 High-grade from the Grasberg resulted in near-record production volumes of 1,600 Mlb of copper and 3.4 Moz of gold. DOZ continued to operate at 42,000 t/d, above design-
capacity. Approved development of Big Gossan deposit. Triennial external environmental audit completed by Montgomery-Watson-Harza concluded that the company’s
“Environmental management practices continue to be based on (and in some cases represent) best management practices for the international copper and gold mining
industry.”
2006 Freeport generated record financial results as copper prices reached new highs and gold prices rose to their highest levels in several years. DOZ operated at 45,000 t/d, above
design capacity. Freeport also sets a quarterly record at the mill with a rate of 246,500 t/d.
2007 Production for the year was 1,151 Mlb of copper and 2.2 Moz of gold. Freeport’s unit net cash costs, including gold and silver credits, averaged $0.29/lb of copper for the year
ended December 31, 2007 and $0.60/lb for the year ended December 31, 2006.
2008 Production for the year was 1,100 Mlb of copper and 1.2 Moz of gold. Freeport’s unit net cash costs for 2008, including gold and silver credits, averaged $0.96/lb of copper.
2009 Freeport expects sales of 1,300 Mlb of copper and 2.2 Moz of gold for the year 2009, compared with 1,100 Mlb of copper and 1.2 Moz of gold for 2008.
MillRate(000’st/d)
Mill Start-up
Sustained 7,500 t/d
9,500 t/d Expansion
12,000 t/d Expansion
20,000 t/d Expansion
66,000 t/d Expansion
(South Concentrator)
115,000 t/d Expansion
(C3 Concentrator)
4th Concentrator ExpansionOpen pit exceeds
Underground
Underground
exceeds open pit
32,000 t/d Expansion
Open pit exceeds
Underground
Unde
exceed
66,000 t/d Expansio
15 000 t/d E
6 0 t E p s
(S th C t tS t C
15,000 t/d E1 011
3 o c(C3 Conce
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on
Expansion
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)
Expansionx
t )ntrator)t
atentrator Expansionn
st/d)MillRate(000’
Sustained 7,500 t/dS t n 0 t
9,500 t/d0 t
12
Expansionp n o
a i
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2,000 t/d Expansion0 d Ex
0 t E20,000 t/d Exp0
0332,00
ansions o
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p n o00 t/d Expansion
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