Freeport Indonesia Says Output Almost Normal, Plans Stake Sale
Freeport-McMoRan Copper & Gold Inc. (FCX) said production and shipments from Indonesia have almost reached normal levels, after work at the world’s second-largest copper mine was halted following a May accident.
Underground operations at its Grasberg mine may need more time to reach normal, Rozik B. Soetjipto, president director of unit PT Freeport Indonesia, told reporters in Jakarta today, without providing details of output and sales volumes. The underground stoppage was reducing daily output by about 1 million pounds of copper and 1,000 ounces of gold, the company said in a statement on June 24.
Phoenix-based Freeport has yet to lift a force majeure declared on June 12, which allows it to miss deliveries, after resuming some concentrate shipments earlier this month. Indonesia ordered the company to suspend work at the mine after a tunnel collapse on May 14 killed 28 workers.
The suspension of mining at Grasberg affected production by about 125 million pounds of copper and 125,000 ounces of gold in the second quarter, the company said in a statement on July 23.
The open pit mine has a full production rate of 140,000 tons of ore per day, Soetjipto said in May. The deposit, located in Papua province, normally produces 220,000 tons of ore a day.
Freeport Indonesia, which said last year the Papua administration was interested in buying a 9.4 percent stake in the company, will sell that to the government and also another 5 percent stake to investors, Industry Minister Mohamad S. Hidayat told reporters in Jakarta today after a meeting with Soetjipto. Indonesia already owns a 9.4 percent stake in the company.
The planned divestment comes after Indonesia last year limited foreign companies from owning more than 49 percent of some mines after 10 years of production. In a separate ruling last year, the government said it will ban raw mineral exports from 2014 and required miners to process metal ores domestically.
Freeport Indonesia is now in discussions with three companies to supply copper concentrate for local smelting, Soetjipto said. The company, which has a 25 percent stake in Indonesia’s only existing copper smelter PT Smelting, is also conducting a feasibility study on a processing facility, he said. This study should be done within six months, Hidayat said.
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