The American gold and copper mining firm, PT Freeport Indonesia, has confirmed press reports it paid the Indonesian Armed Forces or TNI, to provide security.
A Freeport spokesman, Siddharta Moersjid, said that the protection money paid to the TNI to guard the mining operations in Papua province had increased from nearly five million US dollars in 2001 to more than five and a half in 2002.
It has been suspected for some time that Freeport and other mining giants operating in Indonesia have have used Indonesian military personnel to protect their businesses from insurgents and theft.
But the Jakarta Post says the amounts involved have never been disclosed before, nor the institutionalised nature of the payments.
The TNI commander General Endriartono Sutarto told the state run Antara news agency that the matter would be investigated further.
He said as far as he knew the troops received only pocket money and food allowances.
The Australian Associated Press says Freeport's relationship with the TNI came under closer scrutiny after two US citizens and an Indonesian employed by the company were killed in an ambush in August.
The ambush, initially blamed on Papua independence fighters, is being investigated by FBI agents, after there were indications of involvement by TNI members.
Security industry sources in Jakarta have speculated that the killings might have been a response to Freeport's efforts to change their arrangements with the TNI.
