Freeport Indonesia says open-pit mine at full capacity

JAKARTA, July 4 Thu Jul 4, 2013 1:56am EDT

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JAKARTA, July 4 (Reuters) - Open-pit mining at Freeport McMoRan Copper and Gold's Indonesian unit, the world's second-largest copper mine, is now running at full capacity after a prolonged closure due to an accident at the site, the firm said on Thursday.

Freeport halted production at the huge Grasberg mine in remote West Papua on May 15, a day after a training area in a tunnel caved in, killing 28 people.

Late last month, the Arizona-based company said open-pit production had been ramped up to 60 percent capacity, just days after receiving approval from the Indonesian government to resume some mining activities.

"Yes it is," Freeport Indonesia President Director Rozik Soetjipto said by telephone, when asked whether open-pit mining was running at full capacity.

The open-pit mine normally produces between 140,000 tonnes and 150,000 tonnes of copper ore per day, while output from the underground operations is 80,000 tonnes. Freeport was forced to declare force majeure on shipments after the accident.

Underground mining was yet to resume, Soetjipto added, without elaborating.

The company has previously said that it is working closely with the government investigation team and mine inspectors with a view to eventually resuming underground operations.

Earlier this week, a member of the government team negotiating with Freeport on its mining contract, said the accident should not delay the talks.

Benchmark three-month copper on the London Metal Exchange traded at $6,961 a tonne on Thursday, or $454 lower than the day before the accident.

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