Freeport-McMoRan Copper & Gold yesterday provided an update on the status of PT Freeport Indonesia’s (PT-FI) Grasberg operations in Papua, Indonesia following the May 14, 2013 accident at an underground training facility. Although the tragic accident occurred outside the area of mining operations, PT-FI temporarily suspended mining and processing activities at the Grasberg complex “out of respect for and in sympathy of the deceased and injured workers and their families, and to devote full attention to the rescue and recovery effort.” The rescue and recovery effort was completed on May 21, 2013. Most regrettably, there were 28 fatalities and 10 injuries associated with the accident.
The incident is being thoroughly investigated by PT‐FI, international experts, the Indonesian Department of Energy and Mineral Resources (DEMR) and other government authorities with PT‐FI’s full cooperation.
Representatives of the DEMR have completed a preliminary review of the incident and have issued several recommendations, which PT-FI is addressing.
James R. Moffett, Chairman of the Board of FCX, and Richard C. Adkerson, Vice Chairman, President and Chief Executive Officer, said: “We again offer our deepest condolences to the families of our deceased and injured workers. We are deeply committed to the safety of our workforce and to the highest international standards in ensuring safety for our workforce. This was an unprecedented event in our more than 40-year history of operations in Papua. We are taking all actions required to prevent future incidents and to assure the safety of our workforce.”
PT-FI has conducted safety inspections throughout its operations and is working with the DEMR to resume operations in a phased approach. Pending approval from the DEMR, open pit and concentrating operations would commence initially followed by a ramp-up in underground operations upon completion of inspections and any corrective actions in coordination with government authorities.
The estimated daily impact of the temporary suspension of operations approximates to 3 Mlb of copper and 3,000 oz of gold. For the period between May 15, 2013 and June 11, 2013, the estimated impact on PT-FI production is about 80 Mlb of copper and 80,000 oz of gold. PT-FI is working with government authorities on a phased restart of operations and will update its production outlook as additional information becomes available.
Because of the temporary disruption, PT-FI has notified its customers of a Force Majeure event under its concentrate sales agreements.
