Freeport to cut copper output
JAKARTA (JP): Mining giant PT Freeport Indonesia, a subsidiary of the U.S. mining firm Freeport McMoRan Copper & Gold, is planning to reduce its copper production at its Grasberg mine in Irian Jaya by 14 percent to 1.5 billion pounds this year from 1.75 billion pounds last year.
Freeport McMoRan's chief executive officer (CEO) James Moffett said on Saturday the company estimated that its gold production for this year would be approximately the same as last year's which reached three million ounces.
Moffett, however, refused to explain the reason behind the planned decrease in copper output.
"The production will go up and down as we move around," Moffett told journalists after meeting President B.J. Habibie here.
Freeport has been applying for the government's approval to boost its daily ore output to 300,000 tons from 160,000 tons at present.
But, the Ministry of Mines and Energy has not yet approved the expansion plan despite the fact that Freeport had received an environmental impact analysis certificate from the Ministry of Environment and had invested a lot of money for the expansion plan.
According to Moffett, Freeport's copper output from Grasberg rose by 51 percent to 1.74 billion pounds last year from 1.16 billion pounds in 1997.
Gold production from the mine jumped by 66 percent to three million ounces last year from 1.8 million ounces in 1997.
The Grasberg mine is believed to contain one of the world's largest copper and gold reserves.
Freeport Indonesia estimated in 1997 its mine to contain recoverable copper reserves of 37.8 billion pounds and those of gold of 51.3 million ounces.
Freeport Indonesia is 81.28 percent owned by Freeport McMoRan, which is listed on the New York Stock Exchange, 9.26 percent by the Indonesian government and 9.36 percent by PT Indocopper Investama Corporation.
Indocopper, which is listed on the Surabaya Stock Exchange, is 50.48 percent owned by Nusamba Mineral Industries, 49 percent by Freeport McMoRan and 0.52 percent by public minority shareholders.
Nusamba Mineral is owned by the Nusamba group controlled by Mohamad "Bob" Hasan, a golfing buddy of former President Soeharto. (jsk/prb)