Freeport to finish Grasberg open pit mining by year end

Diversified miner Freeport-McMoRan is expected to complete mining in the Grasberg open pit by the end of the year, while also ramping up production at its Deep Mine Level Zone (DMLZ) underground mine and Grasberg Block Cave (GBC) mine in Indonesia.

Arizona-based Freeport said copper ore extraction from the DMLZ underground mine, which is located east of the Grasberg ore body, averaged 9,900 t/d in the third quarter, up from 7,800 t/d in the second quarter. Production is expected to ramp up to 11,000 t/d by the end of the year and 28,000 t/d in 2020 before reaching full production of 80,000 t/d in 2022.

Freeport said it exceeded expectations at the DMLZ underground mine and the GBC underground mine in the third quarter. At the GBC underground mine, Freeport extracted 10,600 t/d of ore in the third quarter, up from 7,400 t/d of ore in the second quarter. Freeport expects to ramp up to 16,000 t/d by the end of the year, which is 1,000 t/d higher than the estimates given in the second quarter earnings. Production rates are expected to increase to 130,000 t/d over the next five years.

Freeport is mining the final stages of the Grasberg open pit as it transitions to the underground mines.

Freeport's sales of copper from its Grasberg mine fell to 139mn lbs in the third quarter from 368mn lbs in the same quarter a year earlier.

In South America, Freeport reported sales of copper at 261mn lbs, down from 326mn lbs in the third quarter of 2019. In South America, Freeport has its 54pc-owned Cero Verde copper mine in Peru and 51pc-owned El Abra mine in Chile.

Freeport's sales of copper from its North American mines rose to 395mn lbs from 350mn lbs a year earlier. The company operates seven mines in North America, five in Arizona, including the Morenci and Bagdad mines, and two in New Mexico.

Overall, Freeport reported a 14pc year over year decline in copper production to 864mn lbs in the quarter. Sales fell by 24pc to 795mn lbs.

Its average realized copper price fell to $2.62/lb in the latest quarter from $2.80/lb a year earlier. Unit cash costs rose to $1.59/lb from 93¢/lb.

Molybdenum sales were flat at 22mn lbs in the third quarter, with average realized price rising to $12.89/lb from $12.40/lb a year earlier.

Sales fell to $3.3bn in the third quarter from $4.9bn in the same year earlier period. Freeport reported a loss of $131mn in the third quarter after reporting a profit of $556mn in the same quarter of 2018.

source: Argus Media