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Freeport declares force majeure on concentrate

Keywords: Tags  Freeport, Grasberg, force majeure, copper concentrates, sales, Atlantic Copper, PT Smelting

NEW YORK — Freeport McMoRan Copper & Gold Inc.’s Indonesian subsidiary has declared force majeure on concentrate shipments from its Grasberg mine after an accident at the site forced it to temporarily suspend operations.

"Because of the temporary disruption, (PT Freeport Indonesia) has notified its customers of a force majeure event under its concentrate sales agreements," Freeport said June 12.

Grasberg is part of PT Freeport Indonesia, a majority owned joint venture with the Government of Indonesia.

Approximately 50 percent of PT Freeport Indonesia concentrates are sold to affiliated smelters Atlantic Copper SA, located in Spain, and PT Smelting, located in Indonesia.

The balance of the concentrate produced at the complex is sold primarily under long-term sales agreements mostly to major smelting companies in Asia.

Around three million pounds of copper and 3,000 ounces of gold is being impacted per day as a result of the collapse of a tunnel last month, which killed 28 people and injured ten more (, May 15). A truck driver was also killed June 1 in a separate incident.

For the period between May 15 and June 11, the estimated impact on production was around 80 million pounds of copper and 80,000 ounces of gold, the company said.

"PT Freeport Indonesia is working with government authorities on a phased restart of operations and will update its production outlook as additional information becomes available," the company said.

The disruption comes at the same time that Rio Tinto Plc’s Kennecott Utah Copper subsidiary has declared force majeure on copper cathode shipments (, April 16) from its Bingham Canyon mine following a wall slide in April.

Kennecott is buying concentrates and using stockpiled ore to produce as much cathode as it can, while traders say Kennecott is also seeking to buy metal to make up any shortfalls.

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