Grasberg is up and running again
Freeport McMoRan Copper and Gold (NYSE: FCX) has restarted production at its Grasberg copper-gold mine in Indonesia after an almost two months stoppage following the completion of a government probe into recent accidents at the mine.
Reuters reports Freeport Indonesia President Director Rozik Soetjipto said while shipments have restarted, it would take a month for underground operations to return to full capacity.
It is now expected that Grasberg, the world’s largest gold and third-largest copper mine with a history that dates back to the 1930s, would only produce 80% of its 2013 targeted output of 500,000 tonnes of copper, and 1.25 million ounces of gold. The mine also produces silver.
Freeport halted most operations at the mine in the remote Indonesian province of West Papua on May 15 after a tunnel collapse killed 28 workers which was followed by another fatal accidents weeks later.
The stoppage has raised questions about expansion plans for an underground mine given the tunnel collapse and ongoing contract extension negotiations between the Indonesian government and Freeport, which wants to operate past 2021.
The storied mine has been the jewel in the crown of Freeport for decades and the $26 billion company keeps a tight grip on the project despite frequent worker strikes, occasional outbreaks of sectarian violence and political interference.
The copper price reacted badly to the news of fresh supply with the red metal losing as much as 2% to touch a day low of $3.03 a pound, a near 3-year low.