Freeport returns Grasberg to full capacity

Denver — Freeport-McMoRan Copper & Gold (FCX-N) has returned the Grasberg mine in Indonesia to capacity.

Throughput at the giant copper-gold complex, situated in Irian Jaya, had been limited to 200,000 tonnes per day in the wake of an accident that killed four contract workers. In early May, slippage occurred within the tailings pile in the Wanagon basin, sending a wall of water and tailings downstream for more than 70 km.

Following a review by operating subsidiary P.T. Freeport-Indonesia (PT-FI) and a team of outside consultants, the Indonesian government allowed operations to resume. Prior to the approval, PT-FI had implemented a 6-month stabilization program for the Wanagon stockpile, limiting overburden to 25 million tonnes.

PT-FI expects fourth-quarter operating results to reflect improved grades, with production projected to exceed 500 million lbs. copper and 875,000 oz. gold. Total production for 2000 should reach 1.6 billion lbs. copper and 2.3 million oz. gold.

PT-FI’s 86% share of fourth-quarter sales should beat previous estimates, with a new record of 430 million lbs. copper and 700,000 oz. gold. London’s Rio Tinto (RTP-N), which funded Grasberg’s latest expansion efforts, retains a 40% interest in throughput above 119,000 tonnes of ore per day. At full capacity, Grasberg is capable of processing more than 230,000 tonnes per day.

Freeport estimates Grasberg will remain the world’s lowest-cost copper producer, with net cash production costs of US11 per lb. in the fourth quarter and US24 per lb. for the year.

In 2001, Grasberg is expected to crank out 1.6 billion lbs. copper and more than 3 million oz. gold, of which Freeport’s share would be 1.4 billion lbs. and 2.3 million oz.