Home News Freeport Get Permit to Export 300,000 Tons of Copper

Freeport Get Permit to Export 300,000 Tons of Copper

PT Freeport Indonesia is again able to boost copper concentrate production after get permit to export 300,000 ton of copper - Photo by PTFI

JAKARTA (TheInsiderStories) –  Indonesia’ Energy and Mineral Resources (EMR) ministry rise PT Freeport Indonesia (PTFI)’ quota after approved the revision of the company’ Work Plan and Budget, said the official last week. The addition about 300,000 metric tons (MT) of copper concentrate gave after the directorate general of coal and minerals rated there is an optimization in the Grasberg open pit mine.

This year, the company has pocketed a production quota of 1.3 million tons of copper concentrate. Of this amount, around 1 million tons will be supplied to smelter own by PT Smelting Gresik. During the first half of 2019, PTFI had used export quota around 180,000 MT of copper concentrate from than allowed 198,282 MT of copper concentrate which ended on March 8, 2020.

With this permit, the unit of United States’ Freeport-Mcmoran Inc. (NYSE: FCX) and PT Indonesia Asahan Aluminium (Inalum) be able to boost its exports again. Director at EMR ministry Yunus Saefulhak as quoted by Kontan, the export quota given is in accordance with the amount of production planned by the company.

Last July, PTFI proposed an additional quota of concentrate production up to 300 thousand tons, this is in line with the optimization of the Grasberg mine in Papua. This year, the miner’ production is expected dropped dramatically along with the transition from open pit mine to underground mine.

“So, we submitted an application for export quota renewal. We want to get certainty of space for exports because there is a possibility that production from open mining can be higher than projections, around 40 thousand tons of concentrate,” said FCX’ Executive Vice President & CFO Kathleen Quirk.

PTFI continues to mine the final stages of the Grasberg open pit. During second-quarter (2Q) 2019, the company opened an additional area to extend mining in the Grasberg open pit into third-quarter and potentially longer.

The mine sequencing changes in the open pit delayed access to the high-grade material previously expected to be produced during 2Q, but are expected to meet previous estimates for copper and gold production for the year 2019.

In the 2Q of 2019, the copper production of the Grasberg mine in 1h of 2019 was 270 million pounds or fell 58.97 percent of production in the 1h of 2018 to 658 million pounds. The decline in production also occurred when viewed quarterly, amounting to 63.98 percent from 347 million pounds in the 2Q of 2018 to 125 million pounds in the 2Q of 2019.

The decline in copper production had an impact on sales which fell 48.81 percent to 325 million pounds in the 1H of 2019 compared to the same period last year of 635 million pounds. When compared quarterly, copper sales also decreased by 52.21 percent in the 2Q of 2019 to 151 million pounds compared to the same period last year of 316 million pounds.

Not only on copper but gold production also experienced similar conditions. Gold production in the 1h of 2019 was recorded at 316,000 ounces, down 76.32 percent compared to the same period last year of 1.33 million ounces.

Quarterly calculation also decreased by 79.18 percent in the 2Q of 2019 compared to the same period last year of 740,000 ounces to 154,000 ounces.

In direct proportion to the decline in production, gold sales also declined by 67 percent in 1H of 2019 compared to the same period last year from 1.27 million ounces to 420,000 ounces. Likewise with quarterly calculations where gold sales were recorded at 185,000 ounces in 2Q of 2019 or fell 72.4 percent compared to the same period last year of 671,000 ounces.

PTFI‘ production is estimated to begin to increase significantly in 2021 as the development of underground mines progresses. The companies projected sales volumes and unit net cash costs for the year 2019 are dependent on a number of factors, including operational performance, mine sequencing changes, the timing of shipments and export quotas.

by Linda Silaen, Email: linda.silaen@theinsiderstories.com