* Says to take a month to hit full capacity
* Says has not yet lifted force majeure
* Company in talks to renegotiate mining contract
By Fergus Jensen
JAKARTA, July 9 Freeport McMoRan Copper and Gold
Inc has resumed copper concentrate shipments from its
mine in Grasberg, Indonesia, but expects output this year to
drop by a fifth following a near two-month stoppage.
A tunnel cave-in killed 28 people at the world's
second-biggest copper mine in May, shutting operations while
safety investigations were carried out.
Freeport Indonesia President Director Rozik Soetjipto told
Bloomberg shipments had resumed but were yet to reach normal
Soetjipto told reporters earlier it would take one month for
underground mining operations to return to full capacity, adding
the mine would only produce 80 percent of its targeted output of
copper, gold and silver concentrate this year.
Before the accident, Freeport had expected sales of about
500,000 tonnes of copper from its Indonesia unit in 2013, along
with 1.25 million ounces of gold.
The government, which gave the go-ahead for open pit mining
to resume last month, said earlier that its decision to allow
underground mining to restart followed the completion of an
independent investigation into the accident.
"From everything that has been done, that has been taken
into consideration, including pressure from the community and
local government, (we) have decided OK, it's safe," Deputy
Energy and Mineral Resources Minister Susilo Siswoutomo told a
joint news conference with Freeport.
The deputy minister said that to improve safety in future
detectors had to be installed to monitor rock conditions,
stronger tunnel supports needed to be installed and increased
maintenance of training areas was needed in the mine.
The Grasberg mine ships around 35 percent of its production
for further processing in Indonesia, while the remainder goes to
Japan, Korea, China and Spain, according to the deputy minister.
Freeport was forced to declare force majeure - an inability
to fulfil its contractual obligations due to circumstances
beyond its control - on copper shipments after the accident.
This had yet to be lifted, Soetjipto said, adding Freeport
would prioritise meeting its supply commitments for its Gresik
smelter in Indonesia.
Open-pit mining has been running at full capacity since July
4. The Grasberg operation was currently producing around
160,000-170,000 tonnes of copper ore a day compared to 220,000
tonnes before the accident, Soetjipto said.
The open-pit mine normally produces between 140,000 tonnes
and 150,000 tonnes of ore per day, while output from the
underground operations is 80,000 tonnes.
Freeport is in talks with the government to renegotiate a
new mining contract to replace its current 30-year contract,
which expires in 2021.
A member of the government team negotiating with Freeport
said last week the accident should not delay those talks.