Kelian goldsilver mine, Indonesia by gzn12524


									                          Project: Kelian Gold Mine, Indonesia
                                  Company: Rio Tinto
                                 Date: 1999 to Present
The Context

   Kelian Equatorial Mining (KEM) is 90% owned by Rio Tinto and 10% by the Indonesian
    based company, PT Harita Jayaraya. KEM commenced its closure planning with the issuance
    of a closure statement in 1998 – some six years before the scheduled mine closure. It is set to
    close its operations in 2004 in the West Kutai Region of East Kalimantan, Indonesia.

   As closure is timed for 2004, KEM has a finite amount of time to put in place arrangements
    to manage economic diversification and the transfer of public services.

   Increasing the challenge is the fact that KEM is an integral part of the local economy,
    employing 1000 Indonesians with a further 800 people employed by contractors. The
    majority of these people have been employed from the local area. The company is also
    involved in 228 village infrastructure development projects.

Tri-Sector Partnering

   KEM has engaged in a number of consultations and communication processes with all
    stakeholders. BPD/NRC has acted as partner to assist KEM in some of these initiatives.

   KEM’s consultation and communication processes ensure all stakeholders are able to
    contribute to the decision-making processes which are in place for mine closure planning,
    community relations programmes and other support activities provided by KEM for local
    communities. Resolution of compensation and other claims is being achieved through direct
    negotiations with representatives of the various claimants, again with assistance from

   The consultation and communication processes have involved the regional and local
    governments as well as village and traditional leaders and other community representatives.

   A Mine Closure Steering Committee (MCSC) has been set up to bring together diverse
    stakeholders with the goal of providing for responsible mine closure which incorporates
    sustainable solutions.

   The working groups include representatives from all the stakeholders and are responsible for
    developing and evaluating options before making recommendations to the MCSC.

Results To Date

   Although a lengthy process, common ground is beginning to be found between the parties
    with each side starting to use some of their core competencies to contribute to the long-term
    social and environmental sustainability of the region.
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   The MCSC meets quarterly and discusses future direction and recommendations relating to
    mine closure planning. The MCSC operates under a charter, which identifies the criteria,
    which should be applied when assessing recommendations.

   Working groups have been set up, consisting of representatives from central and provincial
    government including the Department of Energy and Mineral Resources; community
    institutions; and KEM. The working groups are developing agreements on key areas:

           The Dams Group has agreed on international standards for dam safety and
           The Environment Group has made progress in identifying and collating a range of
            environmental standards relating to the management of waste and quality of water.
            Environment standards will determine, to a large extent, other possible uses of the
            mine site.
           The Sites Uses and Assets Group is looking at legal ownership and responsibilities;
            potential uses for the site and assets; the evaluation of options and risks associated
            with each option and has identified strong interdependencies with the environmental,
            community and dams working groups.
           The Community Development and Regional Planning Group is ensuring synergy
            and co-ordination with regional planning activities so that the impacts of mine closure
            can be managed in a way that minimises adverse affects on local communities and
            which also develops sustainable solutions.

   KEM and the Rio Tinto Foundation are also involved in a number of other community
    involvement programmes which can contribute to the safety of tailings and waste rock dams;
    the development of local health, education, water supply, roads and other community
    services; the training of farmers in new techniques and the promotion of small-scale

Further Information
Tim Cullen Associates Ltd. (TCA), The Plain, Boars Hill, Oxford OX1 5DD
United Kingdom. Tel: +44-1865-326323; Fax: +44-1865-327459 or +44-1865-326363.

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