Landslide kills 12 near Freeport mine in Indonesia

TIMIKA, Indonesia (Reuters) - Twelve people died in a landslide near a massive copper mine operated by Freeport-McMoran Copper & Gold in Indonesia's Papua province, but the firm's mining operations were unaffected, officials said on Tuesday.

A torrent of mud fell into a river, burying local miners who were working on Monday night, Godhelp Cornelis Mansnembra, the police chief in the nearest main town of Mimika, said.

"They are not Freeport's workers. They're community miners who often mine in Freeport's area. Thousands of people often dig gold there," he said.

The police had so far found 12 bodies, while nine miners were still missing.

Mindo Pangaribuan, spokesman for PT Freeport Indonesia, said the landslide did not disrupt the company's operations.

"The landslide happened outside the mining areas," Pangaribuan said.

Freeport will also work with the local government to discuss the community miners working in the company's area, he said.

Freeport's Indonesian unit expects copper output at the Grasberg mine to rise 6 percent this year to 1.2 billion lbs (544,316 tonnes).

But its gold output is expected to fall 45 percent to 1.2 million ounces this year from nearly 2.2 million ounces in 2007 due to lower-grade ore at Grasberg.

The Grasberg mine, believed to be the world's third-largest copper reserve, accounts for 40 percent of Freeport's total copper reserves of 93 billion lbs, according to the company's website. Freeport is the world's largest publicly traded copper miner.

The Grasberg mine has long been controversial because of its environmental impact, the share of revenue going to Papuans and the legality of payments to Indonesian security forces who helped guard the site.

(Reporting by Fitri Wulandari and John Pakage; Editing by Alex Richardson)