After work stoppage pending a government inquest into a cave-in that killed 28 miners, Freeport-McMoRan Copper & Gold has declared force majeure for indefinite obligations to deliver copper concentrate from its massive Grasberg mine in Indonesia’s West Papua province this week.
Arizona-based company officials said they are reviewing recommendations by Jakarta’s Energy and Mineral Resources Ministry. “This was an unprecedented event in our more than 40-year history of operations in Papua,” Chairman James Moffett and CEO Richard Adkerson said in a joint statement. “We are taking all actions to prevent future incidents and to assure the safety of our workforce.”
The news contrasts with comments made earlier this week by Indonesian investigators. “We do not need months to investigate it,” Ridho Wattimena Wattimena, head of mining engineering at the Bandung Institute of Technology who is involved in the investigation, told Reuters.
To date, PT Freeport Indonesia said the suspension impacted 36,000 metric tons (mt) of copper output at the massive complex—or 7% of the 500,000 mt of copper sales the company had expected in 2013. Gold output has similarly been curbed by 80,000 oz—6% of 2013’s planned output of 1.25 million oz of gold.
Operations were halted at the remote complex May 15 after a training tunnel collapsed, killing 28 in one of Indonesia’s worst mining disasters in recent memory; 11 were injured. PT Freeport temporarily resumed open-pit work, but Jakarta officials requested a full suspension after another miner was killed in a separate unrelated incident 13 days later.
It remains unclear when operations at Grasberg, the world’s No. 2 copper mine and the world’s top gold reserves, will resume. Company representatives have said they are cooperating with government authorities to resume work in phases and that they would update production forecasts as information becomes available. Resumption, however, may not be imminent, with more recommendations expected.
Under normal circumstances, Grasberg produces around 220,000 mt of ore concentrate daily, with some 140,000 mt from open-pit operations and 80,000 mt from underground mining. PT Freeport Indonesia contributed some $1 billion to the Indonesian economy last year in taxes, royalties and dividends to the government.