Freeport Indonesia suspends mine operations after tunnel collapse: source

JAKARTA Wed May 15, 2013 6:06am EDT

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JAKARTA (Reuters) - The Indonesian unit of Freeport-McMoRan Copper & Gold Inc suspended operations at the world's second-largest copper mine on Wednesday, a source with knowledge of the matter said, after a training tunnel collapsed the previous day.

Four mine workers have been killed and 25 are still trapped after the tunnel collapsed near the Grasberg mine on Tuesday, the Arizona-based firm said earlier on Wednesday.

Operations were suspended out of respect for the workers killed and those still trapped in the collapsed tunnel, the source said, adding that Rozik Soetjipto, chief executive of the Indonesian unit would fly to the mine on Wednesday evening.

Rescue efforts are continuing at the remote mine in West Papua province, which has the world's largest gold reserves and employs more than 24,000 contract and non-contract workers.

The unit, Freeport Indonesia, said on Tuesday that production was not expected to be significantly affected.

"This is a very sad day for us," Soetjipto said in a statement. "Our thoughts and prayers go out to all the victims and their families and we will continue to do our best to evacuate the remaining workers."

Thirty-nine workers had been in an underground training facility when it collapsed early on Tuesday, the statement said, and ten survivors were given medical treatment.

The site of the accident is outside mining areas, and around 500 meters from the entrance of the Big Gossan Mine, it added.

Freeport Indonesia says its sales are expected to reach 1.1 billion pounds of copper and 1.2 million ounces of gold in 2013, up 54 percent and 31 percent over 2012 figures, respectively, as mining moves into higher ore grades.

(Reporting by Randy Fabi; Writing by Michael Taylor; Editing by Clarence Fernandez)

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