Copper soars after Freeport McMoRan declares force majeure on Grasberg mine
Copper futures rallied Wednesday after Freeport McMoRan Copper & Gold Inc. (NYSE:FCX) declared force majeure at its Indonesia's Grasberg mine, the world's second largest copper operation, heightening concerns about low supplies this year.
The company had to halt operations last month, after a tunnel collapsed at the mine and killed 28 workers. Now it is waiting for approval from Indonesian authorities to restart operations in phases, starting with open-pit mining and processing activity.
Freeport's Indonesian subsidiary restarted some operations after around two weeks, but the government ordered a halt in all production days later when a worker was killed in a new accident.
The stoppage is reducing output by about 3 million pounds of copper (1,361 metric tons) and 3,000 ounces of gold a day, the company said today.
For the period between May 15 and Tuesday, the company said the estimated impact on PT Freeport Indonesia's production was about 80 million pounds of copper and 80,000 ounces of gold.
Metal for delivery in three months went up 1.1% to $7,144.75 a metric ton this morning on the London Metal Exchange. Copper rose as much as 1.4%, the main intraday gain since June 4, after hitting a low of $7,032 Tuesday. Futures for delivery in July increased 0.9% to $3.223 a pound on the Comex in New York.