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UPDATE 2-Freeport able to restart Indonesia open-pit mining soon - minister
May 27, 2013 / 8:36 AM / 4 years ago

UPDATE 2-Freeport able to restart Indonesia open-pit mining soon - minister

* Junior minister says no reason why open-pit mining at Grasberg can’t resume

* Open-pit mining accounts for about 140,000 T of ore a day

* Union official says no mining activity until all probes completed

By Fergus Jensen

JAKARTA, May 27 (Reuters) - Freeport McMoRan Copper & Gold Inc’s Indonesian unit should be able to restart open-pit mining operations at its remote Papua copper mine soon, a junior mining minister said, after a tunnel collapse that killed 28 people.

Despite the government assurance, it was not clear when operations will begin. While maintenance activities at the open-pit mine have resumed, the Freeport workers’ union has called for continued suspension of production until all investigations into the disaster are complete.

Arizona-based Freeport suspended operations at the world’s No. 2 copper mine on May 15 a day after a training area in a tunnel, away from its main operations, caved in on 38 workers, in one of Indonesia’s worst mining disasters.

Deputy Energy and Mineral Resources Minister Susilo Siswo Utomo told reporters on Monday the Grasberg mine complex’s open-pit operations, accounting for about two-thirds of its copper output, would be able to restart in the immediate future once a safety audit had been completed.

A separate government investigation into the collapse should end in one or two months, Susilo said, adding that the probe should not interfere with a resumption of production at the Freeport mine since the two were in different areas.

“This is a stoppage for several days in solidarity, and to carry out an inspection. Once it’s cleared by the monitoring inspectors, they can operate again,” he added.

Freeport Indonesia is conducting its own probe into the collapse using international experts. It is estimated that the closure is costing the company about $15 million a day in lost production.

STRAINED LABOUR RELATIONS?

The labour union, though, has been vocal about not rushing into production.

“The union welcomes the management’s decision to resume maintenance activities in Grasberg open-pit mining, but not for production activities,” Papua-based union leader Virgo Solossa told Reuters on Monday, pointing out that the open-pit mine also used underground tunnels to transport ore.

Some industry analysts say the mine could face a prolonged closure and further strain relations between Freeport and trade unions after a three-month strike there in late 2011.

Freeport itself has said any restarting of operations would depend on the outcome of underground safety inspections being carried out by the energy and mineral resources ministry.

Late last week, Freeport Chief Executive Richard Adkerson said the company was prepared to restart production relatively quickly and had taken the first steps of getting workers back and having training briefings.

The company was not immediately able to comment on the matter when contacted on Monday.

The Grasberg mine normally produces around 220,000 tonnes of concentrated ore a day, with around 140,000 tonnes coming from open-pit mining and 80,000 tonnes from underground operations.

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