Freeport Indonesia resumes underground mining, shipments

Wed Jul 10, 2013 1:30am EDT
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By Fergus Jensen

JAKARTA (Reuters) - Freeport McMoRan Copper and Gold Inc (FCX.N: Quote) has resumed copper shipments from its Grasberg mine in Indonesia as it restarts open-pit and underground mining, but expects output this year to drop by a fifth following a near two-month stoppage.

A training tunnel cave-in killed 28 people at the world's second-biggest copper mine in May, shutting operations across the mine site while safety investigations were carried out.

Freeport had sent two shipments of copper concentrate to refineries in Indonesia and China since June, well below its normal 10 shipments a month, the company said [ID:nL4N0FG0MX].

"We will have a better outlook once we actually start underground mine production, maybe in a couple more days," Freeport spokeswoman Daisy Primayanti said.

Earlier, Freeport Indonesia President Director Rozik Soetjipto told reporters it would take one month for underground mining operations to return to full capacity, and that the mine was expected to produce only 80 percent of its targeted output of copper, gold and silver this year.

Before the accident, Freeport had expected sales of about 500,000 metric tons (1 metric ton = 1.1023 tons) 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 on Tuesday 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.   Continued...