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Tuesday August 14, 6:36 PMFreeport confident over Indonesia mine auditJAKARTA, Aug 14 (Reuters) - Freeport-McMoran Copper & Gold does not expect a recent Indonesian audit on its massive mine in Papua to mean it has to alter its work contract, a company official said on Tuesday.The audit on Freeport's operations in Indonesia, which started in April 2006, has called on the firm to limit output to around 250,000 tonnes a day to minimise environmental damage. The company is allowed to produce up to 300,000 tonnes of ore a day under its work contract. The government auditors also recommended that Freeport process more copper within the country. At present, Freeport processes 30 percent of its total ore output in Indonesia, partly due to limited smelting capacity within the country. "Freeport has been operating according to a working contract. After working for three decades, we believe the government will respect the current contract," Mindo Pangaribuan, a spokesman at PT Freeport Indonesia, told Reuters. "We will discuss with the government the recent findings by the government team," Pangaribuan added. He did not give timeframe when the meeting would take place. Pangaribuan said the firm expected to produce 229,000-230,000 tonnes of ore a day this year, unchanged from 2006. PT Smelting Gresik in East Java is currently the only company in Indonesia to process Freeport's copper output. Freeport has a 25 percent stake in the smelter while Mitsubishi Materials Corp. owns a 60.5 percent stake. Freeport was awarded a mining working contract in 1967. The contract was extended for 30 years in 1991 after geologists found massive mineral reserves at the Grasberg mine in 1988, according to the company's Web site. The Grasberg mine has long been controversial because of its environmental impact, the share of revenue going to Papuans and the legality of payments to Indonesian security forces who helped guard the site. In April, native Papuan workers at the mine went into a four-day strike, demanding better welfare. The strike helped pushed copper prices at the London Metal Exchange to above $8,000 a tonne, the highest since September last year. |
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