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Home › Dodgy Deals ›
Dodgy Deal
IndoMet Coal ProjectIndonesia

Project – On record

This profile is no longer actively maintained, with the information now possibly out of date
Lead organisation:
BankTrack
Contact:

Alex Scrivener, Program Officer, Global Justice Now

Last update: 2016-07-04 21:26:55

Project – On record

This profile is no longer actively maintained, with the information now possibly out of date
Lead organisation:
BankTrack
Contact:

Alex Scrivener, Program Officer, Global Justice Now

Last update: 2016-07-04 21:26:55
Why this profile?

What must happen

BHP Billiton's IndoMet mine is a disaster in the making. If BHP Billiton is serious about becoming a leader in responsible mining, it should withdraw from IndoMet immediately and seek permanent protection for the area. The Heart of Borneo is simply too precious a place to destroy.    

Similarly, commercial banks should refuse any financial transaction with BHP Billiton as long as they cannot be certain the proceeds will not be used for the development of the IndoMet Coal Project.

About
Sectors Coal Mining
Location
This project has been identified as an Equator Project

BHP Billiton's coal mining concessions for the IndoMet Project span an area of 350,000 hectares, more than twice the size of Greater London. The concessions contain more than 1.2 billion tonnes of mostly metallurgical coal that would be shipped to Asian markets. To transport the coal to a port, a 425 kilometres long railway will be built. The IndoMet Coal Project, which was initially referred to by BHP Billiton as the Maruwai coal project, covers five potential coal deposits in East and Central Kalimantan in Indonesia.

Impacts

Social and human rights impacts

For centuries, the indigenous Dayak people of Indonesian Borneo lived from the abundant forests and rivers that blanketed the region. They depend on the forest for food, medicinal plants, non-timber forest products and water.  Now, BHP Billiton is planning to build a series of massive coal mines that would destroy primary rainforest, deprive indigenous peoples of their customary land and pollute water sources relied on by one million people. The project will directly impact ten villages surrounding the concession areas, affecting an estimated 10,000 people. 

The project has already led to conflict in Maruwei, a village of 700 people near the Haju mine, the first of BHP Billiton’s mining operations in the area. Global Justice Now has documented how Maruwei residents were forced to accept token payments of 100 rupiah, the equivalent of half a UK penny, per square metre for an area of their customary forest in 2006.

The local community did not possess formal deeds to the land. BHP Billiton was able to claim that the paltry amounts given to local people were goodwill payments rather than compensation. BHP Billiton could take possession of the land without the informed consent of the community. This runs contrary to BHP Billiton's commitments to obtaining the free prior and informed consent of indigenous peoples. As a member of the International Council on Metals and Mining, BHP Billiton has committed to obtaining the consent of indigenous peoples for mining operations affecting their land, including for "customary owners or occupants of land or resources."  

Said Yesmaida, wife of the head of the village of Maruwei: "we signed the agreement about the land with BHP but honestly did not understand. The compensation was one million rupiah (about GBP50) per hectare of land. The communities did not agree this price and there was no process of negotiation. They just came and asked us to sign the form and then gave us the cash. Someone who had three hectares of land got three million, two hectares got two million...we do not want BHP to operate along the Beriwit."  

For the construction of the railway, which would be done in a private-public partnership, another 27,000 hectare of land need to be acquired. Yet so far no attempt to consult communities in the rail corridor has been made. 


Environmental and climate impacts

The IndoMet Project is located deep in Central Kalimantan in an area known as the Heart of Borneo. Covering an area the size of England and Scotland combined and spanning three countries, the Heart of Borneo is one of the largest transboundary rainforests remaining in the world. According to WWF, which has been closely involved in managing the Heart of Borneo initiative, the area is home to six percent of the world's biodiversity, contains the headwaters for 14 of Kalimantan's 20 major rivers and provides food, water and livelihoods to 11 million people.    

The seven concessions granted to BHP Billiton contain an estimated 75,000 hectares of primary forest in central Borneo, forests recognised globally for their biodiversity. The area provides habitat for orangutans, pygmy elephants, clouded leopards, rhinoceros, proboscis monkeys and numerous other rare and endangered species. Such is the biological richness of these vast remote forests that new animal and plant species are discovered every year.

The secondary forests inside the concession areas provide a refuge for large numbers of orangutans who are already critically endangered and have already been displaced by rampant land-clearing in the more accessible lowland regions. If IndoMet goes ahead, their habitat will be threatened and they will face displacement once more. The area is also the headwaters for the Barito River, one of the main arteries of Central and South Kalimantan, providing water, transport and sustenance for millions.

Companies

Adaro Energy

Indonesia
Profile
Website
Adaro has a stake of 25% in the IndoMet project.

BHP Billiton

Australia
Profile
Website
BHP has a stake of 75% in the IndoMet project.
No companies
News
BankTrack
Partners
Blog
External
BankTrack news BankTrack blog Partner news Partner blog

Imelda Adhisaputra: Coal is still good business

2016-09-29 | www.en.tempo.co
BankTrack news BankTrack blog Partner news Partner blog

Indigenous Dayaks in a remote Borneo village fight BHP coal mine

2015-08-14 | news.com.au
BankTrack news BankTrack blog Partner news Partner blog

The Hunt For Minerals In The Coaled Heart Of Borneo

2014-11-26 | New Matilda
BankTrack news BankTrack blog Partner news Partner blog

BHP Billiton to face grilling from coal-impacted communities at AGM

2014-10-22 | Global Justice Now
BankTrack news BankTrack blog Partner news Partner blog

Miners confused by Indonesian export ban

2014-01-16 | The Sydney Morning Herald
BankTrack news BankTrack blog Partner news Partner blog

BHP go ahead for IndoMet coalmine

2013-12-01 | The Australian
BankTrack news BankTrack blog Partner news Partner blog

BHP's rainforest-swallowing coal venture

2013-11-27 | Green Left
BankTrack news BankTrack blog Partner news Partner blog

BHP in Indonesian Borneo: the coal disaster waiting to happen

2013-11-19 | ABC
BankTrack news BankTrack blog Partner news Partner blog

Environmentalists urge scrapping of Borneo coal project

2013-11-07 | UPI
BankTrack news BankTrack blog Partner news Partner blog

Fears for orangutans: BHP urged to abandon coalmining in central Borneo

2013-11-07 | The Guardian
BankTrack news BankTrack blog Partner news Partner blog

Swallowed by coal: UK profits from Indonesia's destructive mining industry

2013-10-30 | The Guardian
BankTrack news BankTrack blog Partner news Partner blog

BHP Billiton encroaching into the Heart of Borneo

2013-10-23 | Jakarta Post
BankTrack news BankTrack blog Partner news Partner blog

BHP Billiton to be slammed for Borneo coal mining at AGM

2013-10-22 | London Mining Network
BankTrack news BankTrack blog Partner news Partner blog

What Is BHP Up To In Indonesia?

2013-07-02 | New Matilda
BankTrack news BankTrack blog Partner news Partner blog

What Is BHP Up To In Indonesia?

2013-07-02 | The Sunrise Project
BankTrack news BankTrack blog Partner news Partner blog

IndoMet Coal expected to start production in Q3

2013-05-08 | Jakarta Post
BankTrack news BankTrack blog Partner news Partner blog

Lahai Coal (IndoMet) mine infrastructure & Port handling

2013-02-01 | Thiess Indonesia
BankTrack news BankTrack blog Partner news Partner blog

BHP suspends work at its IndoMet Coal site after worker killed

2013-01-22 | BHP
BankTrack news BankTrack blog Partner news Partner blog

BHP BILLITON EXPLORATION AND DEVELOPMENT REPORT FOR THE QUARTER ENDED 30 SEPTEMBER 2012

2012-10-12 | BHP
BankTrack news BankTrack blog Partner news Partner blog

BHP Billiton to Begin Work on Indonesia Coal Project

2011-11-03 | The Wall Street Journal
BankTrack news BankTrack blog Partner news Partner blog

BHP Billiton enters into a join venture for its Indonesian Coal Project

2010-03-31 | BHP
BankTrack news BankTrack blog Partner news Partner blog

BHP Billiton Approves Maruwai Stage One Coal Development

2008-06-24 | BHP
Resources
Documents
Images
Videos
Links
2014-10-31 00:00:00

BHP Billiton’s IndoMet Project: Digging Deep into the Heart of Borneo

NGO document
2014-10-31 00:00:00 | Down to Earth
2013-09-30 00:00:00

Banking while Borneo burns

How the UK financial sector is bankrolling Indonesia's fossil fuel boom
NGO document
2013-09-30 00:00:00 | World Development Movement
2012-11-06 00:00:00

Deutsche Bank BRICS Metals & Mining Conference

Company document
2012-11-06 00:00:00 | BHP
2008-06-24 00:00:00

BHP Billiton plc

Investor Relations Steelmaking Materials Briefing
Company document
2008-06-24 00:00:00 | BHP

IndoMet

2014-12-01

Video links

http://www.wdm.org.uk/webdoc
online, interactive documentary exploring how UK banks are financing coal mining in Indonesia.

Stop BHP's Destruction in Indonesia

Action Alert by Community Run

IndoMet in the Heart of Borneo

Flickr

SourceWatch IndoMet Coal Project

Profile of the IndoMet Coal Project as part of the Coal Issues portal on SourceWatch, a project of CoalSwarm and the Center for Media and Democracy.
Updates

2016

2016-10-17 00:00:00 | PT Adaro Energy Tbk (ADRO) completed purchase of IndoMet coal mine project worth USD120 million

Jakarta - PT Adaro Energy Tbk (ADRO) completed the share purchase transaction IndoMet Coal coal mine project worth USD120 million. The Company officially took over 75% stake IndoMet Coal of BHP Billiton Ltd. on October 14, 2016. Corporate Secretary of Adaro Energy Mahardika Putranto explained that Adaro PT Alam Tri Abadi and Coaltrade Ltd buy PT Maruwai Coal, PT Juloi Coal, PT Kalimantan Coal, PT Sumber Barito Coal, PT Lahai Coal, PT Ratah Coal and PT Pari Coal. The Coal IndoMet project previously belonged Australian company, BHP Billiton Ltd. IndoMet Coal is a project that consists of seven coal contracts of work, which are located in Central and East Kalimantan.

2015

2015-10-30 00:00:00 | BHP pins future of Indonesian coal mine on new rules

According to Reuters: BHP Billiton said plans to develop a massive mine in Borneo will hinge on a revision of Indonesia's mining rules, including on compulsory divestment and contract extensions. In September 2015, BHP said it had started mining at the Haju mine, part of the first stage of the IndoMet Coal project, in the forested Central Kalimantan province.

2015-08-13 00:00:00 | Legal claim on 1,000 hectare of land by indigenous Dayaks

BHP has hit a roadblock on its coal mine in Indonesian Borneo after finally starting operations. The company begun mobilising the Haju mine, after being delayed by the global financial crisis. But the indigenous Dayak people of the nearby village of Maruwai, in the remote north Central Kalimantan, have launched a legal claim that aims to lock BHP out of 1,000 hectare of land within the project area (source: www.news.com.au).

2014

2014-10-22 00:00:00 | BHP Billiton to face grilling from coal-impacted communities

Representatives from Colombia and Indonesia have arrived in London to tell the BHP Billiton board that coal-mining is detroying communities (source: Global Justice Now).

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