Freeport Says 32 Shootings Eroding Grasberg Copper, Gold Output

Freeport-McMoRan Copper & Gold Inc. (FCX) said 32 shooting incidents in almost as many months have hampered operations at its Indonesian mine, which holds the world’s largest recoverable copper deposit.

Fifteen people were killed and 56 injured in the shootings since July 2009 at Grasberg and along the road leading to Freeport’s mining and milling operations in the district, the Phoenix-based company said today in a statement. The victims included Freeport employees, contractors, members of law enforcement and civilians, it said.

Grasberg is located in Papua province where separatist groups have sought political independence for years, often resorting to violence. Freeport halted production and shipments from Grasberg this month after violence flared up among employees in the aftermath of a strike last year over pay increases.

“The identity of the perpetrators is unknown as is the motivation for the shootings,” Freeport said in the statement. “We have taken precautionary measures, including using secured convoys on the road. The Indonesian government has responded with additional security forces.”

Freeport’s copper production fell 18 percent to 823 million pounds in the fourth quarter from a year earlier, the company said on Jan. 12. Gold output plunged 71 percent to 181,000 ounces.

Freeport will be “reviewing its numbers” for Grasberg for the first quarter and the full year, Chief Financial Officer Kathleen L. Quirk said this week in a presentation at BMO Capital Markets’ Global Metals & Mining Conference in Hollywood, Florida.

“Prolonged limitations on access to the road could adversely affect operations at the mine,” Freeport said. “The safety of our workforce is a critical concern, and PT Freeport Indonesia is working cooperatively with the government of Indonesia to address security issues.”

To contact the reporter on this story: Soraya Permatasari in Melbourne at soraya@bloomberg.net

To contact the editors responsible for this story: Rebecca Keenan at rkeenan5@bloomberg.net; Andrew Hobbs at ahobbs4@bloomberg.net

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