Freeport keeps Grasberg shut amid rescue operations

[Ben Graham]

Freeport McMoRan Inc. (NYSE: FCX) said operations at its giant Grasberg mine in Indonesia remain suspended as the company continued efforts to rescue seven workers trapped underground earlier this week.

The miner is still trying to reach the contractors at the copper mine in the province of Central Papua after a mud flow incident on Monday, according to a statement. Operations will remain halted to prioritize the safe evacuation of the workers, it added.

Grasberg is the world’s second-biggest copper mine and a prolonged disruption could keep copper prices elevated. Freeport was allowed to resume shipping concentrate from the operation in March under a quota system, following a ban last year by Indonesia to encourage domestic processing.

Freeport was seeking to use 90% of its quota before expiration this month, after earlier exports were disrupted by weather.

The global copper smelting industry has been grappling with a dire shortage of concentrates this year, pushing charges to treat and refine the feedstock into the negative. Freeport’s new smelter in Indonesia has been slowly ramping up after being damaged by a fire last year.

Freeport shares fell 3% Friday morning in New York, giving the company a market capitalization of $64.4 billion.

Grasberg has an annual output of about 1.7 billion lb. of copper and 1.4 million oz. of gold from three mines in the district. Freeport holds a 49% stake in the complex, while Indonesia’s state-owned mining company holds the majority interest.

Freeport Indonesia has previously forecast copper concentrate output of nearly 3 million tonnes in 2025.