Indonesia tells Freeport to halt copper-gold mine for 3 months

The government of Indonesia ordered US-based Freeport-McMoRan Copper & Gold (NYSE: FCX) Monday to shut all operations in Papua province for three months, while it completes a probe into a series of recent fatal incidents at the firm’s mines in the country.

RELATED: Grasberg could stay shut for two months after Indonesia minister calls for halt

The company halted operations at its flagship copper and gold Grasberg mine on May 14 after 28 workers died in a tunnel collapse.

The mine remained closed at a cost estimated at about $15 million a day in lost production until last week, when Freeport restarted limited production. However a worker was killed on Friday in another mine after a truck was covered in wet muck from an overflowing storage bin, triggering today’s closure.

Grasberg alone generates about 220,000 tonnes of concentrated ore a day, with close to 140,000 tonnes coming from open-pit mining and 80,000 tonnes from underground operations.

Analyst believe May’s incident, one of the country's worst mining disasters, could further strain relations between Freeport — the largest taxpayer to the Indonesian government— and nationalist politicians who have called on it to pay higher royalties.

The miner has also had a series of labour disputes in recent years, including a three-month strike in late 2011 and smaller problems since.

Image: Rescue workers at Grasberg in May/Screenshot from WLN News.