Freeport to cut output by 30,000 tons a day

JAKARTA (JP): Minister of Mines and Energy Susilo Bambang Yudhoyono said on Wednesday that U.S.-based cooper and gold mining company PT Freeport Indonesia has agreed to cut its daily output by about 30,000 tons of ore from 230,000 tons at present.

"This morning I received the news that Freeport has committed to reduce its output. The amount is not confirmed yet, but it is likely to be around 30,000 tons of ore a day," he told journalists before a cabinet meeting.

He said Freeport had promised that it would immediately reduce its production.

Freeport Indonesia confirmed Tuesday that the Indonesian government requested it consider reducing production at its Grasberg open pit mine pending completion of technical studies in response to a May 4 landslide.

However, the press release did not report the size of the planned cut in daily production.

Freeport was ordered to reduce output after a large pile of waste material collapsed into its dumping site, Lake Wanagon, causing a massive wave that swept away four workers. The men, employed by contractors PT Petrosea and PT Graha Buana Jaya, are feared dead.

Freeport has blamed the collapse of the overburden pile on heavy rainfall, which reached on average of 40 millimeters last week.

The incident prompted the government to bar Freeport from dumping its waste material into Lake Wanagon until it can improve safety measures at the site.

Minister of Environment Sonny Keraf said on Wednesday he welcomed Freeport's commitment to cut output.

"By cutting the output, half of the problems the company face now can be solved," he said.

PT Freeport Indonesia is owned by U.S. mining company Freeport McMoran Copper & Gold, 81.28 percent; the Indonesian government, 9.36 percent; and PT Indocopper Investama Corporation, which is partly owned by Nusamba Mineral Industries, a company linked to former president Soeharto, 9.36 percent. (cst)