New Orleans-based
The decision was made in response to a debris flow that has blocked access to areas of higher-grade ore. The flow, involving some 150,000 tonnes of loose material, occurred in the same area of the open pit as a previous, larger slippage; that accident, which occurred in early October, left eight people dead. No one was injured in the latest incident, and there was little in the way of property damage.
Open-pit operations at Grasberg only recently resumed after Indonesia’s Department of Energy and Mineral Resources gave the nod following cleanup of the Oct. 9 slippage. The department’s review of the slide concluded that the accident was due to a natural occurrence rather than negligence.
The company is stabilizing the pit wall and removing waste in an effort to regain access to the high-grade areas. In the meantime, mining will focus on lower-grade areas.
As a result, Freeport has trimmed its fourth-quarter copper sales estimates by 35 million lbs. to 165 million lbs. Estimated fourth-quarter copper sales had already been reduced by about 10% to 200 million lbs. after the October slippage. On the other hand, Freeport now pegs gold sales at 260,000 oz. — 10,000 oz. better than previous estimates.
In all, full-year sales estimates for 2003 have been adjusted to 1.3 billion lbs. copper (70,000 tonnes behind previous estimates) and 2.5 million oz. gold (off 150,000 oz.).
Freeport intends to defer certain metal sales from 2004 until 2005; its previous plan for 2004 included the sale of 1.4 billion lbs. copper and 2.2 million oz. gold.
Grasberg’s 40,000-tonne-per-day underground operations are unaffected, and the company says the revised mine sequencing does not affect long-term mine plans or recoverable ore reserves.
Grasberg is no stranger to accidents. In November, two workers suffocated in a tunnel while transporting surface ore to the mill. The workers were overcome when ore sourced from an area containing previously unencountered concentrations of elemental sulphur released fumes in the tunnel. In 2000, unusually heavy rainfalls washed overburden into Lake Wanagon, sending a wave of rocks, sludge and water into the valley below. Four construction workers died.
News of the latest accident sent shares in Freeport down US$1.21, or 2.7%, to US$43.69 in mid-afternoon trading in New York on Dec. 18. Three-month copper prices, already up on higher demand and lower production, ended the day’s trading session on the London Metals Exchange at US$2,225 per tonne, a level not seen in more than six years.
Be the first to comment on "Grasberg suffers second slide (December 29, 2003)"