Freeport Declares Force Majeure

Freeport-McMoRan Copper & Gold Inc. reported on June 12 that PT Freeport Indonesia had notified its customers of a force majeure event under its concentrate sales agreements for production from its Grasberg operations in Papua, Indonesia. Grasberg production was shut down following a roof collapse at a PT-FI underground training classroom and tunnel on May 14 that killed 28 people (E&MJ, June 2013, p. 9). That incident was some distance away from mine operations, and PT-FI was working toward returning to production at the Grasberg open pit on May 31 when a second incident at the underground DOZ mine resulted in another fatality.

That death resulted from overflow of wet muck from an ore pass onto a truck, covering the truck and fatally injuring the driver, who died in a hospital the next day.

All activity related to Grasberg mine production was then suspended pending conclusion of ongoing investigations by the Indonesian Department of Energy and Mineral Resources and by PT-FI into the causes of the accidents.

PT-FI is owned 90.64% by FreeportMcMoRan and 9.36% by the government of Indonesia. At full production, the Grasberg mines produce about 220,000 mt/d of ore, 140,000 from an open pit and 80,000 mt/d from underground.

Freeport-McMoRan’s June 12 statement estimated the daily impact of the suspension of operations at about 3 million lb of copper and 3,000 oz of gold in concentrates. “For the period between May 15, 2013, and June 11, 2013, the estimated impact on PT-FI production approximated 80 million lb of copper and 80,000 oz of gold. PT-FI is actively working with government authorities on a phased restart of operations and will update its production outlook as additional information becomes available,” the statement said.

As of June 20, news reports indicated that the investigations of the accidents might be nearing conclusions and that activity to restart mine production might begin within a week or two.

As featured in Womp 2013 Vol 07 -