20 Jan 2006

Share value of world's largest gold mine drops on reports of US scrutiny

9:25 am on 20 January 2006

Share prices in US mining company Freeport McMoran have taken a drop following news that it's under government scrutiny over payments to the Indonesian military to secure its operations in Papua.

The International Herald Tribune reports that shares in the company fell more than two per cent, to US$60.26 yesterday with news of the inquiry.

Freeport McMoran this week admitted it has "received informal inquiries from governmental agencies" in the US related to its support of Indonesian security institutions.

The government scrutiny follows a report by The New York Times last month that from 1998 through 2004, Freeport paid individual military and police officers and military units nearly 20 million US dollars to secure its operations in Papua province, where it runs the world's largest gold mine.

The company publicly reported paying military units in 2001 and 2002, but has not acknowledged that the money went to individual officers over seven years.

In Jakarta, the vice chairman of Indonesia's corruption commission said that if Freeport had made payments to individual officers, "that's corruption."