Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

CORRECTED-UPDATE 1-Freeport to reduce Indonesian mining activities -smelter official

Published 08/02/2017, 10:55 pm
© Reuters.  CORRECTED-UPDATE 1-Freeport to reduce Indonesian mining activities -smelter official
HG
-
5711
-

(Corrects to clarify in 1st, 5th paragraphs that worker strike was at smelter, not mine.)

By Wilda Asmarini

JAKARTA, Feb 8 (Reuters) - Freeport-McMoRan Inc FCX.N has warned it will scale back activities at its Indonesian copper mine, an official at Indonesia's main copper smelter, PT Smelting, said on Wednesday, amid a worker strike at the metals processor and other issues.

Freeport's Grasberg mine in Papua, Indonesia, is the world's second-largest copper mine, and recent disruptions there have helped support a jump in copper prices.

Grasberg had aimed to produce around one-third of the Freeport's total copper output this year, up from less than a quarter in 2016, as it digs into higher-grade ores.

"Freeport has just issued a notice this morning that they will reduce (mining) activities in stages," Smelting director Prihadi Santoso told reporters.

"We are trying to meet our commitments to our clients," he said, declining to comment on what had sparked the strike at the smelter or how many people were involved.

PT Smelting is 60.5 percent owned by Mitsubishi Materials Corporation 5711.T , while Freeport Indonesia holds 25 percent.

Lower output from Grasberg would affect Smelting, which processes around 40 percent of the mine's copper concentrate production, Santoso said, noting he did not know how much the volumes would be cut.

A spokesman for Freeport Indonesia confirmed by text message that it had sent out a notice on output cuts at Grasberg.

Last week, Phoenix-based Freeport warned it could be forced to cut staff, spending and production in Indonesia if it did not get a new export permit by mid-February. CEO Richard Adkerson said in late January that labour issues were also hampering production as Grasberg targets to wind up its open pit mining in late 2018.

"As we've approached the completion of the pit, workers have been raising complaints, grievances, and have simply not been meeting productivity standards," he said.

A spokesman for Freeport workers union did not respond to requests for comment.

Indonesia's Coal and Minerals Director General Bambang Gatot said on Wednesday that Freeport had not been issued with a new permit yet and there had been no reports of layoffs.

Freeport said on Friday last week it was still working with the Indonesian government to resolve issues after exports of its copper concentrate were halted Jan. 12. The Southeast Asian country banned export shipments of semi-processed ore to boost its local smelter industry.

Copper prices on the London Metal Exchange CMCU3 have climbed 6 percent on supply concerns since Indonesia stopped Freeport's concentrate shipments and as a strike looms at top copper mine Escondida.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.