Freeport’s Grasberg Mine Ore Production at 5% of Capacity

Nov. 3 (Bloomberg) — Freeport-McMoRan Copper & Gold Inc.’s Grasberg mine in Indonesia is producing 5 percent of its capacity of 230,000 tons of ore per day, a mining official said.

“Their milling operations have been suspended because pipelines were cut,” Thamrin Sihite, director general of mineral resources and coal at the Energy Ministry, said.

Ramdani Sirait, Freeport’s spokesman in Indonesia, didn’t answer telephone calls or reply to mobile-phone text messages seeking confirmation.

Phoenix-based Freeport said in a statement Nov. 1 it stopped milling operations at Grasberg since Oct. 22 because of damaged pipelines. Its Indonesian unit processed an average of about 120,000 metric tons of ore a day in October, 31 percent less than the daily rate planned for the fourth quarter, according to the statement.

Milling, the processing of ore to prepare it for shipment to smelters, was suspended at Grasberg after concentrate pipelines were damaged during protests related to a labor strike at the mine. While the company had started repairs, it wasn’t able to fully access the affected areas because of road blockages by striking workers, the company said.

About 8,000 workers at Grasberg, which has the world’s largest recoverable reserves of copper, have been on strike since Sept. 15 demanding an increase in pay.

Freeport said on Oct. 26 it had declared force majeure on some sales agreements because of the work stoppage.

http://www.businessweek.com/news/2011-11-03/freeport-s-grasberg-mine-ore-production-at-5-of-capacity.html

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