Gold Inc. Protests by locals and environmental groups have dogged the mine, and last week the government threatened to suspend production after an accident killed four workers. In the end, authorities allowed production to continue but banned the dumping of waste at the accident site. Analysts said that while the risk of Freeport's closure was low, the tussle was symptomatic of the increasing tendency of Jakarta and regional governments to try to wring more concessions from foreign mining firms operating in the country. They said new laws devolving more control over mining contracts with the provinces, due to come into force in the coming year, would create further uncertainty for miners. The autocratic leader was ousted in May 1998 after a 32-year rule.
Most producing mines are under criticism due to environmental and social dissatisfaction.
President Abdurrahman Wahid has pledged to honour all international contracts, but urged foreign firms to renegotiate any deals that resulted from corruption under Suharto's regime. And his government's efforts to promote regional autonomy, in a bid to calm separatist tensions, have given provinces the ammunition to demand more from mining firms. Rubin said one problem was that royalties from mining were still channeled to the central government, leaving provinces unhappy. Indonesia says foreign investors have nothing to fear from the new climate, but must do their bit for the community. The government will try very hard to secure foreign investment here.