Freeport Stops Papua Mining After Tunnel Collapse Kills Five

Freeport-McMoRan Copper & Gold Inc. suspended operations at the world’s second-largest copper mine, where five people were killed and 23 remain trapped after a tunnel collapse at the Grasberg complex in Indonesia.

Mining remained halted for the second day amid rescue and recovery efforts and in sympathy for the victims of the accident, PT Freeport Indonesia said today in an e-mailed statement. The rescue team found the fifth body at 2:50 a.m. local time.

Grasberg in Papua province, about 3,120 kilometers (1,939 miles) east of Jakarta, includes underground and open-pit operations and is the world’s second-biggest by output, Freeport said in a March 14 presentation. The complex generated $3.92 billion of revenue for Freeport last year, or 16 percent of the Phoenix-based company’s sales. Freeport owns 91 percent of the mine, which also produces gold, and Indonesia’s government holds the rest, according to the company’s website.

“The rescuers have been working around the clock for two days now and they continue to strive to reach the rest of our trapped colleagues in the shortest time possible,” Freeport Indonesia President Director Rozik Soetjipto said in the statement today.

No Impact

The incident has had no direct impact on operations and the company has enough stockpiled material to supply shipments for as many as two days, he said yesterday. Freeport is inspecting the structure of the underground mines at Grasberg, he said, declining to comment on the suspension’s potential impact on production.

Thirty-nine workers may have been in a classroom at an underground training facility when a tunnel collapsed March 14, Freeport said yesterday. Eleven survivors have been evacuated and are reported to be in a stable condition, the company said today.

Freeport has suspended the negotiation process for the 2013-2015 Collective Labor Agreement because of the accident, it said in the statement. The company and its labor union had started contract negotiations on May 13.

Before the latest stoppage, output at Grasberg was disrupted in 2011 and 2012 after labor unrest and violence. The company said in a February filing that 15 people died and 57 were injured in 37 shooting incidents in and around the complex between July 2009 and Feb. 15 this year.

Freeport gained 0.6 percent to $31.76 in New York yesterday.

BHP Billiton Ltd.’s Escondida mine in Chile is the largest copper mine.

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