Freeport to resume open-pit operation

The Jakarta Post, Jakarta | Headlines | Mon, June 24 2013, 9:31 AM

Mining giant PT Freeport Indonesia will resume operations in its open-pit with government permission after being idle for more than a month following a fatal tunnel collapse.

The Energy and Mineral Resources Ministry has allowed the United States-based gold and copper producer to resume production only in the open-pit and to commence milling in Papua.

“[Freeport] expresses its appreciation to the government for the approval and thoroughness of its ongoing investigations and recommendations related to the underground accident,” the company, a subsidiary of Arizona-based Freeport-
McMoRan Copper and Gold Inc., said in a press statement released on Saturday.

“It will continue to support the government’s special investigation team in its investigation and is working cooperatively with government authorities to resume underground operations as soon as practicable.”

Minister Jero Wacik said earlier on Tuesday that the Grasberg opencast mine, 2.7 kilometers from the scene of the tragedy, was “safe” based on a report by the ministry’s investigators.

The investigators, however, are yet to allow the company to restart underground operations.

A number of investigations, including one by the Papua Police and one by the ministry, have been carried out since the May 14 collapse killed 28 workers and injured 10 others at an underground training facility.

The ministry ordered the company to shut down its entire activities following the collapse.

The investigation team has found that ground movement resulting from erosion was the cause of the cave-in. The team is led by Ridho Wattimena, head of the mining engineering graduate program at Bandung Institute of Technology in Bandung, West Java.

“The sudden and unexpected ground failure in such a long-standing excavated area is highly unusual,” said Freeport Indonesia president director Rozik Soetjipto. The company claims it will “renew the commitment to take all actions required for our workers’ safety”.

The Grasberg open-pit contributes 140,000 tons of ore per day, or 64 percent of Freeport’s daily production, while the Deep Ore Zone mine, an underground block a few kilometers from Grasberg, which remains closed, contributes the rest.

Freeport has lost an estimated US$18 million from the shutdown, and will probably not reach its production target of 1.3 million troy ounces of gold by the end of the year, 44 percent up on last year.

The government has lost $1.82 million every day from one of the country’s biggest taxpayers during the suspension of operations.

Freeport planned to invest $15 billion to develop another mine at the Grasberg site, the world’s largest gold mine, before the incident.

The company planned to start operating the new site, called the Grasberg block cave mine, in 2017, as operations at the open-pit mine are due to end in 2016.

Freeport estimated that the new site would produce 160,000 tons of ore per day at full capacity. The DOZ mine and the planned Grasberg block cave mine could produce up to 240,000 tons of ore per day.

There has been no further explanation about that plan after the incident, however. (nai)


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