Copper products don't meet quality expectations

Copper products don't meet quality expectations

SYDNEY (Dow Jones): Indonesia's pioneer copper smelter, PT. Smelting Copper Co., has delayed its commercial production of copper cathodes as the initial batch of production hasn't met design quality, an official with Mitsubishi Corp. in Tokyo told Dow Jones Newswires on Thursday.

Mitsubishi Corp. has a 9.5 percent stake in the company and is responsible for the marketing of the PT. Smelting production.

Mitsubishi Materials Corp. has a 60.5 percent stake in the company; PT Freeport Indonesia has 25 percent; and Nippon Mining & Metals Corp. owns the balance.

"Some cathodes are coming out from the smelter, but the quality is not good enough; not according to design quality," the official said.

Depending on test results, commercial production is now seen starting in late March. "There shouldn't be a problem to ship in April," he said.

A batch of copper cathodes was sent to Tokyo to test its suitability for making rods and wires. The batch of cathodes, he said, had a high level of impurities.

The official stressed that project-wise, PT. Smelting remained on schedule.

PT Smelting's customers, he said, have expressed willingness to wait for the cathodes.

The company has commitments to ship 30,000 metric tons to customers in Asia during the first quarter of 1999. Shipments will be in tranches of 10,000 tons.

PT. Smelting Copper located in Gresik, East Java, began operations in October last year amid political and economic uncertainties in Indonesia. It has an installed production capacity of 200,000 tons.