Freeport Indonesia Set to Increase Open-Pit Mining After Restart

Freeport-McMoran Copper & Gold Inc. (FCX) may scale up open-pit mining at the Grasberg mine in Indonesia to normal levels this week after restarting operations following a tunnel collapse that forced a shutdown.

PT Freeport Indonesia began production at the world’s second-biggest copper mine on June 22 after the government approved milling and open-pit operations, Daisy Primayanti, the company’s spokeswoman, said in a mobile-phone text message today. Output from the open-pit mine may reach normal levels in three to four days, Rozik Soetjipto, president director at the company, said in a phone interview. Resumption of underground operation is pending a decision by the Energy and Mineral Resources Ministry, Soetjipto said.

Freeport declared force majeure on shipments on June 12, a clause that allows it to miss obligations due to situations beyond its control. Production from Grasberg stopped following the tunnel collapse on May 14 that killed 28 people. The company hasn’t yet lifted the force majeure, Soetjipto said.

Output from the open-pit section of Grasberg accounts for 70 percent to 80 percent of the total mine production, according to Gayle Berry, Nicholas Snowdon and Sijin Cheng, analysts at Barclays Plc. “If the open-pit section is re-opened this week, this would certainly limit the disruptions, versus initial expectations for as long as 2-3 month closure,” they wrote in a research note June 21.

Copper extended a third weekly loss as London Metal Exchange inventories climbed to a 10-year high and operations resumed at the Grasberg mine in Indonesia. The metal for delivery in three months dropped as much as 1.4 percent to $6,723.50 a metric ton and was last at $6,726.

To contact the reporter on this story: Eko Listiyorini in Jakarta at

To contact the editor responsible for this story: James Poole at

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