JAKARTA (TheInsiderStories) – PT Freeport Indonesia (PTFI) ore production capacity at the Grasberg Block Cave and Deep Mill Level Zone (DMLZ) underground mines reached 54,800 metric tons per day during the second quarter (2Q) of this year, its parent Freeport McMoran Inc., (NYSE: FCX) reported on Thursday (07/24). This realization is above 9 percent of the projection and up 46 percent compared to the first quarter of 2020.
The subsidiary operates one of the world’ largest copper and gold mines at the mines in West Papua. Freeport Mcmoran has a 48.76 percent ownership interest in PTFI and manages its mining operations. Under the shareholders agreement, the company’ economic interest in the Indonesian unit approximates 81 percent through 2022.
it said, the ramp-up of underground production at the Grasberg continues to advance on schedule. During 2Q of 2020, a total of 46 new drawbells were added at the Block Cave and DMLZ underground mines, bringing cumulative open drawbells to 261.
The company expects its 2021 copper and gold production to approximate 1.4 billion pounds of copper and 1.4 million ounces of gold, nearly double projected 2020 levels. The successful completion of this ramp up is expected to enable the miner to generate average annual production for the next several years of 1.55 billion pounds of copper and 1.6 million ounces of gold.
The average unit net cash cost is estimating around $0.20 per pound of copper assuming an average price of $1,400 per ounce of gold and achievement of projected sales volumes and cost estimates. Freeport Indonesia‘ estimated annual capital spending on underground mine development projects is expected to average approximately $900 million per year for the three-year period until 2022.
The investment fund came from FCX and its partner PT Indonesia Asahan Aluminium (MIND ID). Beside digging the underground mines, their unit targeting the build smelter site in Gresik, East Java. But due to the COVID-19 outbreak, the completion of the project delays to December 2023. PTFI continues to discuss with the Indonesian government a deferred schedule for the project as well as other alternatives in light of the pandemic and global economic conditions.
The parent reported, PTFI consolidated copper sales reached 172 million pounds in the 2Q of 2020 were higher than previous year of 151 million pounds. But gold sales lowered to 180 thousand ounces in 2Q of 2020 than 2Q of 2019 of 185 thousand ounces, primarily reflecting timing of shipments.
Consolidated sales volumes from the unit are expected to approximate 770 million pounds of copper and 800,000 ounces of gold in 2020. As PTFI continues to ramp-up production from its underground ore bodies, metal production is expected to improve significantly by 2021.
Richard C. Adkerson, President and CEO reported, in the 2Q of his year, the global miner reported net loss of US$53 million and during the 1H of 2020 also loss $438 million.
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