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Kelly's thoughts of the move, the place, and more...
Gold Mine On The Cloud Forest Mountain
by Kelly Coburn, 2001-12-16
I am sitting on my balcony watching the clouds roll in below me as the forest's waterfalls pour off the steep surrounding mountainsides, not quite drowning out the mush olla's wailing call to prayer. You might wonder where I am and what I'm doing here. You and me both.
Divine Calling
I was sitting in the Denver airport, returning from a Montana fly fishing trip to retired life on my little Florida barrier island home. I was minding my own business, not looking for trouble, certainly not looking for work, just stranded for seven hours. A classified ad jumped out at me from a discarded Denver Post. Wanted: employee development specialist for a mine in Indonesia. That was exactly my last job six years ago! Needs change management experience. I had run a change management consulting practice for five years! It was with Freeport. They had been one of my clients!
This must be fate, I thought. My family and I were very happy on Fort Myers Beach and would be crazy to leave. But this job was too big a coincidence to ignore. I applied, figuring I had nothing to lose. Fifteen weeks passed with no word. I wrote them to ask why they had rejected me, assuming I'd been out of the workforce so long my resume writing abilities had spoiled. Wrong. They called, talk to me for an hour, then sent two first class plane tickets for my wife Becky and I to come visit. Be careful what you wish for. We went for the interview, mostly out of curiosity and adventure, assuming they probably wouldn't offer me the job, nor that we would want it. They offered. We accepted. We sold everything, grabbed our two little boys and moved to Tembagapura, Irian Jaya, Indonesia. Just like that.
History Of The Grasberg Mine
In the 1930's an explorer found an outcropping of high grade copper ore while climbing a mountain on the island of New Guinea. In the 1960's a geological exploration crew was helicoptered in with drilling equipment and confirmed the presence of a large deposit of high grade copper, gold and silver ore inside this still-active five million year old volcano. The ore body was a mile across, started at the 14,000 foot top of the volcano and continued down for 8000 feet. It was 100 years worth of glory hole. There were no roads, towns or even a port on the coast where you could land a boat. Just impenetrable jungle, miles of swamp between the ocean and mainland and a huge cliff forming a barricade between the ocean and the mountain.
Freeport, a New Orleans mining company, obtained the investors, struck a deal with the Indonesian government and began to build the eighth wonder of the world. They built a port on a barrier island as an equipment staging area. Then they started the road. At first, they had to suspend men with chainsaws from ropes below helicopters to chop their way down through the jungle canopy and clear a site. Then they dropped in bulldozers. The bulldozers built a road from the swampy coast to the barrier cliff. Then they blasted a tunnel through the cliff and built a road up the mountain. They built two towns to house over 20,000 workers and their families, one near the edge of the swamp and one half-way up the volcano. They built a mill near the mountaintop to grind the ore into concentrate, and a pipeline to carry the concentrate to the shipping port. The infrastructure took years and cost billions.
In 1972 they commenced attacking the ore body from the top (strip or surface mining) and simultaneously below (underground mining). Today Freeport McMoran Copper And Gold is probably the world's largest mine, with nearly billion annual sales. They are profitable although hugely in debt. They have 15,000 employees and contractors at the mine site, all but 300 of them Indonesians. NYSE symbol FCX.
Irian Jaya New Guinea, off the northeast Australia coast, is one of the world's largest islands and one of the world's last wild places. The western half is the Indonesian province of Irian Jaya, population two million. Indonesia is the world's fourth most populous country, with 230 million people on 13,000 islands. It is the world's largest Muslim country. Irian is 75% impenetrable virgin rainforest. It is home to 16,000 foot peaks, thanks to the collision of the Asian and Australian tectonic plates. It is home to the world's only equatorial glaciers. There are virtually no roads. It rains every day, hundreds of inches a year.
We're about five degrees south of the equator. It stays at around 85 degrees at sea level. It stays between 62 and 72 degrees at the 6500 foot elevation of our home. Yesterday I walked through snow in an ice storm at 15,683 feet on top of one of the glaciers. Both the lowland and highland jungles are so thick that you cannot walk where there isn't a road. In the highlands there are almost no insects or animals and what few animals exist here are marsupials like the tree kangaroo. The lowlands are home to many poisonous snakes, pythons, malarial mosquitoes, saltwater crocodiles a variety of other nasty creatures and the beautiful Bird Of Paradise. There are no beaches, the island being surrounded by mangrove swamps. There are 14 foot tides and tremendous sportfishing for fish like the barramundi.
The local people, called Papuans, are Australian aboriginal in origin and appear more like Africans than Asians with their black skin and frizzy hair. They are probably Indonesia's most primitive and least educated people and are looked down upon by the class-conscious, race-conscious Javanese majority. Assimilating them into business is a particular challenge because their society was flung from the Stone Age to the Technology Age without the benefit of passing through the Industrial Revolution. We have employees attending computer-based training who were hunter-gatherers before they found work at the mine. While they dress normally at work, it is accepted for them to wear nothing but sandals and a hollowed-out gourd over their penis back at the village.
Only 200 miles from the mine is a village called Baliem. It was discovered in the 1940's when a plane flew over their valley during a rare lifting of the clouds, revealing a society of over 10,000 people who had never seen a white man and who had not yet discovered metal. The Papuans are physically strong and believe in eye-for-an-eye. As an example, if they think you are not giving them equal opportunity to progress in the company, they might show up at your desk with an arrow strung in their bow and pointed at you. This is actually refreshing compared to the Javanese who never say what they really think and have about twelve words that almost but not quite mean "no" . The Papuans practiced cannibalism upon their enemies until quite recently, and some say the practice continues. A young Rockefeller disappeared here in the 1930's and rumor has it he was delicious. This is their country and they are free to travel around the mine even if they do not work here, so you never know quite who you will meet on the street. All in all they are friendly people who often work hard and add a very interesting twist to the culture at the mine.
Irian is also a major transmigration site. Indonesia's central island of Java, population 100 million, is overpopulated. The Indonesian government uproots poor people from Java and relocates them here, giving them about 20 acres of land to farm in transmigration camps. So there are a lot of poor people here. Malaria affects up to 40% of the population in the camps. Many have flocked to the only nearby city, Timika, which has grown from 10,000 to 100,000 people in the last ten years. It is rife with AIDS, prostitution, smuggling and government corruption. But it is the only escape from the mine to the real Indonesia so we go there to shop and get away.
Irian is also in the middle of a guerrilla fight for independence. Some Papuans would like to break away from the Indonesian government and reap all of the benefits of the mine. In the past, white tourists have been kidnapped by the guerrillas, so we are a little careful about venturing off the beaten paths. Thousands of Indonesian soldiers are stationed here to protect against the guerrillas, and unfortunately probably do more harm than good. I see poor teenage soldiers with automatic rifles every day.
Mining The Mountain
Imagine this giant column of ore running down the center of the volcano. The easiest mining is at the very top, where you dig down, harvesting the ore until you begin to run the risk of the sides of the hole falling in on you. So you must widen the hole and make its sides slope down gradually. This extra worthless rock you have to move is called overburden. The deeper you dig down from the surface, the more overburden you have to move. It is similar to trying to dig a deep hole in soft sand: you deeper you try to go, the wider the hole must be made to keep the sides from caving in. Because operations today are still at the top of the mountain, Freeport only needs to remove about two and a half tons of overburden for every ton of ore it can take from the surface mine. Fortunately, the ore gets richer the deeper you go to justify the overburden expense. Eventually, 20 tons of overburden will have to be removed for every ton of surface ore mined, at which point the economics of surface mining cease. Economics aside, the overburden is also an environmental risk. Freeport removes 550,000 tons of overburden daily to produce 250,000 tons of ore. At that rate, the overburden could fill a nearby 20 mile long valley in a decade. As further perspective, it would take Freeport a day and a half to remove the equivalent of the World Trade Center debris.
Most of the Grasberg deposit is deep and will be removed by underground mining, which has begun in tandem with the surface mine. Simply stated, this involves tunneling throughout the deposit, drilling holes in it, planting explosives and smashing the rock into removable pieces. Freeport is actually more ingenious about it, not only using explosives to break up the rock but also using the domino effect of the rock as it falls to cause the collapse of rock below that has been weakened by tunneling. Once again the World trade Center serves as an analogy, similar in the way that the collapse of the upper floors was used to destroy the floors beneath in a cascading effect.
Freeport also uses gravity to its advantage in two ways. They built the grinding mill 3000 feet below the surface mine. When ore is removed from the top, a conveyor belt takes it out over a 2000 foot sheer cliff and drops it. When the rock hits the ground at 150 plus miles per hour, the impact alone does half the crushing. The partially crushed rock is then placed in large tumblers where steel balls finish grinding it to powder. The powder is then placed in water-based chemical concentrator tanks, where about 80% of the copper, gold and silver is removed. Still at a high altitude, the concentrate slurry is put in a pipeline. The 9000 foot drop over the 70 miles to the ocean sends the concentrate flying down the pipe to the port. The concentrate is then dried, loaded onto ships and sent to Freeport smelters in Indonesia and Spain, and to concentrate customers around the world.
The ugly part is what we do with the ground-up rock after removing the metals. Because the ore is about 2% metal, that means that of the 250,000 tons of rock we grind everyday, we have 245,000 tons of almost useless rock powder (tailings) left over. What was once a beautiful whitewater river has been transformed into a tailings canal. The tailings are dumped into the river, flow down almost to the sea and then are routed into ponds where they are allowed to settle out. Fortunately the tailings aren't poisonous. Where there was once swamp, tailing are now making land as high as 20 feet above sea level. Crops and trees are being grown in the tailings. Someday, when the technology advances, Freeport will be able to return to the tailings and extract the other 20% of gold and copper left in the tailings.
The infrastructure in place here is staggering. There are 110 of the world's largest dump trucks, whose tires stand over 12 feet tall and can each carry a load of nearly a million pounds of rock. The electric scoop shovels can fill a truck in three and a half scoops. We use so much dynamite we manufacture it here, which is also much safer than trying to transport ready-made explosives. We build and repair so many buildings and roads we have our own cement plant. We burn the local limestone (of which the volcano partially consists) to make cement. We mine gravel and sand from the rivers and hillsides and from the mine itself to make concrete. There are literally thousands of mechanics who live and work here to keep all the machinery going 24 hours a day seven days a week. About 400 people work solely as trainers to educate this third world workforce on how to operate all of this 21st century equipment.
The company must providing housing for all employees and, for a privileged few, housing for their families also. Most Freeport workers leave their wives and children back at the village on their home islands and only travel home two or three times per year to see them. There are two hospitals and over a dozen mess halls for the employees. There are four schools for the children of the family status workers. There are about 1500 white Toyota turbo diesel Landcruisers that are the company cars, and about 100 buses to navigate the mine's 200 miles of private roads and tunnels. There is also one of the world's largest trams, a cable car that can carry 90 men or equipment up the mountain.
The economics are equally gigantic. Freeport is Indonesia's largest taxpayer. It produces 47% of Irian's gross domestic product. Additionally, one percent of all profits are donated annually to community development projects. Without the mine, Irian would probably fall back into the Stone Age.
My Job
As a Business Improvement specialist, my job is to act as an internal consultant on projects throughout the mine. All of the work has an emphasis on sustainable change, meaning don't just fix problems but try to put in place whatever is necessary to keep the problems from recurring. Usually this means training people. The primary justification Freeport gives the Indonesian government for bringing in Americans is that we will train our Indonesian replacements so that we can be sent back home in three years or so. I am authorized to hire three Indonesians to work under me and eventually replace me. In addition to developing them, I'll be working on the following specifics: a) managing driller training programs in the underground, b) writing curriculum and training the trainers for a company wide leadership workshop for managers and c) developing and delivering whatever management or functional training I deem necessary to improve the quality of the people in the Human Resources department. I will also be looking for ways throughout my work to hire or promote Papuan locals as a form of affirmative action.
All of the above would be quite simple if it wasn't for the working culture here. You can give an assignment with a due date to someone, then have him repeat back to you what he is going to do and when he is going to do it, and it doesn't get done. They will never tell you no. When they get ideas on how to do things better they do not act upon them or even tell you about their ideas, either because it is not their job or they don't wish to insult you. Harmony is more important than business objectives, so peace is usually chosen at the risk of getting little done. Form is cherished over substance, so completed products like a procedure manual might be beautifully packaged and bound but contain little valuable information. Maximum employment is also cherished in a place where so many people are unemployed, so one tries to come up with ways to involve more people in each task rather than fewer. And they are reactive rather than proactive, preferring to solve problems rather than prevent them. With all of this, one must be quite patient in attempting to accomplish anything.
Life
This is a company town. You fly in on the company jet, land on the company airport, get in your company car and go home to your company house where you sit on company furniture, eat food from the company store or go to the company restaurant. You need to trust and be happy with your employer here because they control every aspect of your life.
Your neighbors are mostly Javanese but also Papuan, Australian, New Zealanders and Americans. Everyone is very friendly toward one another, and the expatriates do a great job of taking care of and entertaining each other. There is a bit of uneasiness between the expats and the Indonesians because we make about 40 times as much money as they do, and they know it. Ironically, expats rarely learn to speak Indonesian because the company language is English. Wives are not allowed to drive here, so they lead a second class life in some ways. However, a full time maid and cook or babysitter can be had for as little as a month, so they have a lot of free time for shopping, traveling, sewing, gardening, etc. There are tennis courts, squash courts, basketball courts, indoor arenas for kids to ride bikes and scooters, two health clubs, three restaurants, a shopping center, a bar and beautiful scenery. The travel allowances and vacation days are extremely generous so all the expats go on glamorous world trips. Bali is only four hours away and a world class vacation spot. Darwin, Australia is only a two hour flight
Most people live in apartments. Flat ground is at such a premium in these steep mountains that there is very little room for single family homes. With half of the population Muslim, the call to prayer wakes everyone up at 5am, so most people go to work early and are home by 5pm. Most people do not work the weekends.
The international schools here are superior to US public schools, with small class sizes and sometimes two grades to a class. There are a lot of kids here in this small town and they seem to have a lot of fun.
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In summary, this is a wild jungle with spectacular scenery, an engineering marvel and a very diverse yet close knit community with only a little bit of political tension. If you can do without a lot of shopping variety, live entertainment and other little things we take for granted in the States, you can be happy here and make and save a lot of money while seeing the world.
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