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Freeport Indonesia mine grinds to complete halt: Union

Reuters - February 16, 2017

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Fergus Jensen, Jakarta – All work has stopped at Freeport-McMoRan Inc's giant copper mine in Indonesia, a worker union said on Thursday, just over a month after the country halted exports of copper concentrate to boost domestic industries.

Freeport had said the suspension would require the Grasberg copper mine to slash output by 60 percent to approximately 70 million pounds of metal per month if it did not get an export permit by mid-February, due to limited storage.

But a strike at Freeport's sole domestic offtaker of copper concentrate, PT Smelting, expected to last at least until March, has limited Freeport's output options, and Grasberg's storage sites are now full.

"Everything has stopped completely. It's just maintenance now," Freeport Indonesia worker union chief Virgo Solossa told Reuters, stopping short of saying how many of an estimated 33,000 workers had been sent home.

A spokesman for Freeport Indonesia could not immediately be reached for comment on the matter.

Freeport estimated in January that sales of copper from Grasberg, the world's second-biggest copper mine, would reach 1.3 billion pounds in 2017, up from 1.05 billion pounds in 2016, assuming operations were normal.

Thousands of workers planned to stage a demonstration on Friday in Papua, the province where the mine is located, to demand that the government "make a wise decision" regarding their situation, Solossa said.

"If they aren't careful, this has and will impact (Freeport operations), both for workers as immediate beneficiaries and the broader community as recipients of benefits from Freeport's presence." Solossa added that further action would be considered following the demonstration on Friday.

Indonesia introduced rules earlier this year requiring Freeport and some other miners to shift from their current 'contracts of work' to so-called 'special mining permits', before being allowed to resume exports of semi-processed ores and concentrates.

Phoenix, Arizona-based Freeport has said it would only agree to a new mining permit with the same fiscal and legal protection in its current contract.

Mining ministry officials did not immediately respond to requests for comment on the matter.

[Reporting by Fergus Jensen; Editing by Joseph Radford.]

Source: http://www.reuters.com/article/us-indonesia-freeport-output-idUSKBN15V0RO.