The Indiana Jones of Indonesian mining
Award-winning Australian geologist Mansur Geiger has worked hand-in-hand for decades with Dayak tribe communities to prospect for gold and other lucrative minerals
Thirty-five years ago Australian geologist Mansur Geiger set off into the heart of Indonesian Borneo, where he spent the next month with Dayak tribesmen prospecting for gold and other minerals in a rugged jungle wilderness populated by orangutans, nine-meter-long pythons and Malaysian sun bears.
On foot and by canoe, it would be one of many expeditions undertaken by the modern-day Indiana Jones into the upper reaches of the Kahayan River, which over time would lead to the discovery of Beruang Kanan, a deposit containing an estimated 200,000 tons of copper cathode.
This isn’t the end of the story, however. About 30 kilometers to the west lies Baroi, where preliminary drilling some years ago revealed long near-surface veins of high-grade ore and the promise of a major porphyry copper deposit beneath.
Dayak children Geiger met on that first trip up the Kahayan subsequently became part of the 100-strong work-force of PT Kalimantan Surya Kencana, (KSK), then a subsidiary of Indonesian-owned Kalimantan Gold when it was first formed in 1997.
Under his guidance, former subsistence farmers, hunter-gatherers and gold panners turned their hand to geology, drilling, engineering and carpentry as KSK expanded the search for promising copper and gold deposits in uncharted territory.
Geiger’s growing bond with the Dayaks also led to the birth of the Tambuhak Sinta Foundation, one of Indonesia’s earliest corporate social responsibility programs aimed at community empowerment, environmental protection and providing education for under-privileged children.
“I think we’ve shown that the earlier you engage with the local community, the better it is for you,” he says of the Dayak people known for their head-hunting tradition. “We’ve had nothing but success and commitment from them. It’s not a big secret, all you have to do is treat them as equals.”
This month, as KSK’s managing director, Geiger received the United Nations-sponsored Susila Dharma International Association’s 2018 Danke Award for the company’s social work, which until recently was in danger of collapsing under the weight of Indonesia’s own restrictive mining policies.
KSK’s deposit doesn’t rank as a major discovery, but it does have one great advantage: it can be processed into copper plate by simple leaching, without the need for a smelter required under restrictive value-added regulations introduced in 2014.
That’s the good news. The bad news is that those same rules which helped to kill mining exploration in much of Indonesia also made it difficult for Asiamet Resources, KSK’s new Australian owners, to raise the money for a bankable feasibility study.
A recent breakthrough in talks over divestment and other issues between the government and small contract holders has broken that years-long logjam and will allow Asiamet to complete its study next month.
Other small mining firms faced the same regulatory predicament as Asiamet. Some still do because there is little sense in building a smelter that makes a venture uneconomic or costs more than the deposit itself.
In 2007, getting to KSK’s base camp involved a six-hour boat ride up the Kahayan, then another four-hour drive over logging trails into the shadow of the rugged Schwaner Range, marking the Central-West Kalimantan border.
Now, it’s a four-hour ride on an excellent paved road from the provincial capital of Palangkaraya, and another two hours over a good logging road, testament to the clear-felling that has devastated the once-virgin jungle across large swathes of Kalimantan.
The 65-year-old Geiger has mixed feelings about the march of progress. “During those early days, I couldn’t help thinking ‘what are we going to do if we did find something,’” he says. “I couldn’t believe there would ever be a road in there.”
On that first journey of discovery, the Perth-born geologist was, in fact, following the vision of Muhammad Subuh Sumohadiwidjojo (1901-1987), the Javanese founder of Subud, a tiny multi-religious, multi-cultural spiritual brotherhood.
In the best traditions of a Hollywood adventure epic, Geiger remembers Subuh planting a large thumb on a map of Central Kalimantan and declaring: “Out there contains great wealth.” His thumb covered one million hectares of jungle.
It was that vision which kept the seat-of-the-pants firm searching long after the infamous US$6 billion Bre-X Minerals gold scam and the 1997-98 Asian financial crisis sent scores of other junior explorers scurrying for the exits. They have never returned.
In fact, Kalimantan Gold was the last company to go public, raising US$8 million on the back of the stock market frenzy created by Bre-X, whose share price soared to US$285 before its claimed 200 million-ounce bonanza was found to be a hoax.
Geiger says the Bre-X fever reached such a pitch that Canadian financiers and gold analysts weren’t interested in the rock samples, maps and geological reports he carried in his briefcase. The fact that the operation was in Kalimantan was good enough.
That remote wilderness is all part of the so-called Kalimantan mineralization arc, but when Kalimantan Gold was first established in the early 1980s, Geiger says “no-one knew what we were getting into” – least of all the geologist-devotee himself.
Until the Vancouver Stock Exchange listing allowed KSK to drill its first hole in 1998, it had survived on piecemeal investments from Subud’s core of wealthy businessmen and ordinary citizens, who either individually or through foundations controlled most of the firm’s stock.
Subuh founded the Subud sect in 1924 after an unusual bright light fell on him during an evening stroll. Over time, and through other enlightenments, he became convinced that what he was receiving was a gift of divine power which brings individuals into contact with their inner being.
Subud, however, has no dogma, teaching or creed. “You simply blank yourself,” explains one follower. “For me it’s an experience that has changed me profoundly and made me a very different person. It’s a technique of worship that cuts across all religions.”
It also seems to have imbued its 20,000 followers with infinite patience. One of the keys to the firm’s survival was the way Geiger and the other early pioneers integrated with the local community, employing the Dayaks as guides and living out of canoes.
The early 2000s were hard, so bringing ambitious Australian miner Oxiana Resources on board in 2007 was a major coup, particularly at a time when the Indonesian mining industry was showing few signs of recovery from the earlier financial crisis.
After 32,000 meters of drill holes covering five separate prospects over the previous two decades, Geiger had few doubts what would be found in a vast 940-square-kilometer concession, where the rocks date back 130 million years.
But Oxiana’s involvement proved to be short-lived, diverted by its acquisition of a new gold mine in northern Sumatra – one of only three small mineral deposits to come into production over the past two decades.
It was to be five more years before Kalimantan Gold’s fortunes took another promising turn when Freeport McMoRan Copper & Gold, owner of Papua’s fabulously-rich Grasberg mine, joined the search.
Until Freeport came along, KSK had no helicopters or other modern equipment to lighten the load. As with the other small explorers who make the biggest discoveries, pumps, generators and portable drills had to be hauled up rivers and through the jungle by hand.
Now, thanks to a US$36 million injection from the cashed-up American mining giant, it had all that and more. The 52 holes it drilled told Geiger most of what he needed to know about the main prospect, a surface deposit known as BKM.
But Freeport was after something bigger. Indeed, the last two deeper holes at BKM, punched 200 meters apart, revealed such exceptionally high copper grades that its geologists began showing more than passing interest.
Then everything fell apart. On Christmas Eve 2013, just as Freeport had signed up for a conclusive US$14 million drilling program, the Indonesian government announced it was imposing a total ban on the export of unprocessed and semi-processed ore.
Freeport soon thereafter cancelled its exploration activities in Kalimantan and Aceh and the mining industry, already smothered in a forest of new regulations ushered in by the controversial 2009 Mining Law, slipped into virtual oblivion.
Like several other small explorers sitting on prospective mines, Asiamet has stuck to the task of trying to define a commercial deposit. But it was also forced into playing a waiting game, hoping a government obsessed with resource nationalism would finally see the light.
Now that it has had a change of mind, at least up to a point, the end of a long tunnel may at last be in sight. Says Asiamet chief executive Peter Bird: “I see BKM as a starter project, a catalyst, because there is a whole suite of other things that need to be followed up.”
For Geiger and his much-loved Dayaks, that can’t come soon enough after years of uncertainty and dashed hopes. ”I’m still waiting for my happy ending,” he says. “I never had a plan B. This is my retirement plan.”