West Papua had for many years produced significant amounts of oil for Anglo/Dutch firm Shell amongst others. However it was not until 1967 that the massive reserve of copper at Mt Carstenz was first exploited by the Freeport McMoRan company of Louisiana, which had been granted mining rights by General Soeharto shortly after coming to office.
The huge Freeport mine holds copper and gold reserves worth at least US $40 billion. Yet with political control and a twenty per cent share held in Jakarta, and USA-based Freeport and the giant RTZ company of the UK owning the dominant eighty per cent share in the mine, very little of the mineral revenue returns to West Papua and only a small proportion directly benefits the native Papuans.
There appears to be little planning given to long term sustainable economic development, with a rapid increase more recently in new mining and logging projects.
Of the 41.5 million hectares of forest in Irian Jaya, over 27.6 million hectares have been designated as production forest. Indonesian law enables the Government to act virtually as it pleases with respect to the resource rights of the West Papuan tribal people. Transmigration, comrnercial logging, mining and other government-sponsored programs are considered to be in the interests of the nation, and take priority over any local land claims.
The forcible removal from traditional lands, coupled with the inherent differences between traditional and industrial culture, often causes indigenous communities to react with open hostility. "Enclave" type developments in the timber, mineral and oil sector, provide the Indonesian Government with the bulk of its foreign exchange earnings in eastern Indonesia. There is a close association of military personnel with such projects.