Indonesia judge to mediate over Freeport lawsuit

JAKARTA, Aug 7 (Reuters) - An Indonesian court has appointed a judge to seek a mediated settlement in a $30 billion lawsuit filed by a Papuan tribe against a unit of Freeport McMoRan Copper & Gold FCX.N over alleged damage from mining, a court official said.

The lawsuit, which was filed on behalf of 92 members of the Amungme tribe, alleges that indigenous land rights were not respected by Freeport at its majority-owned Grasberg mine, which has the world’s largest recoverable reserves of copper.

Land had been irrecoverably damaged and the tribe had not received pledged funds, the suit claimed. A third of the damages sought are for alleged human rights violations due to the mining.

PT Freeport Indonesia denied any wrong doing and said that previous lawsuits against Freeport making similar allegations had been dismissed in both local and U.S. courts.

A clerk at the South Jakarta court handling the case said by telephone that a judge had been appointed a day earlier in an effort to reach settlement between the different sides.

Titus Natkime, a lawyer for the tribe, said there would be a hearing on the mediation efforts on Aug. 20.

“The plaintiffs have agreed to attend the mediation. The bargaining started yesterday after they asked whether or not we could reduce our demand but we said no,” he added.

If mediation fails then the lawsuit would be heard in court.

The Grasberg mine operated by Freeport has been a frequent source of friction over its environmental impact, the share of revenue going to Papuans and the legality of payments to Indonesian security forces who help guard the site.

Freeport said in a statement that millions of dollars had been provided to the community and the firm had contributed $27 million by the end of 2008 to trust funds for the Amungme and Kamoro tribes, and planned to continue making contributions of $1 million annually.

It also said that nearly $329 million had been provided to a community fund for health and education since its inception.

In addition to its copper, the Grasberg mine has the world’s largest reserves of gold.

Freeport said that nearly all its employees were Indonesian, while it said it had raised the number of Papuans employed to 29 percent by 2008, a number that it aimed to lift further.

The lawsuit, a copy of which was seen by Reuters, was also filed against the Indonesian government and PT Indocopper Investama, both of which hold 9.36 percent stakes in the project, as well as the heads of the Mimika district and Papua province.

Separately, authorities have also been investigating a series of recent shootings near the mine in which an Australian technical expert working at Freeport and a security guard died.

Eight men have been detained as suspects, including several workers from Freeport, police have said.

The province has suffered a low-level separatist insurgency for decades, but many analysts say the recent violence is most likely due to conflicts between the police and the military over security arrangements and related business ventures linked to the mine. [ID:nJAK204756] (Reporting by Telly Nathalia; Writing by Ed Davies; Editing by Lincoln Feast)