Freeport-McMoran Copper & Gold Inc. may increase open-pit mining at the Grasberg mine in Indonesia to normal levels this week after restarting operations following a fatal tunnel collapse.
Output from the open-pit mine may reach normal levels in three to four days, Rozik Soetjipto, president director of the Indonesian unit, said in a phone interview. 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, a spokeswoman, said in a text message today.
Freeport’s Indonesian unit lost about 115 million pounds (52,000 metric tons) of copper and 115,000 ounces of gold between May 15 and June 21, the company said in a statement today. The underground stoppage is reducing output by about 1 million pounds and 1,000 ounces of gold a day, it said. Resumption of underground operation is pending a decision by the Energy and Mineral Resources Ministry, Soetjipto said.
Freeport, based in Phoenix, declared force majeure on shipments on June 12, a clause that allows the miner to miss obligations due to situations beyond its control. Production from Grasberg stopped after 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 Barclays Plc analysts Gayle Berry, Nicholas Snowdon and Sijin Cheng. “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 June 21 note.
Copper futures for September delivery fell 2.4 percent to $3.0255 a pound at 8:25 a.m. on the Comex in New York after earlier dropping as low as $2.9935.