Copper market’s biggest whale fuels speculation of a major shift
The world’s single biggest buyer of copper, State Grid Corp. of China, has slowed its purchases of copper wire this year.
Another accident on Friday at the Grasberg mine in Indonesia threatened to close Freeport McMoRan Copper and Gold Inc’s (NYSE: FCX) largest operation, reports Reuters.
After a truck was covered in wet muck from an overflowing storage bin, the driver was left with critical injuries, which led union reps to call for a work stoppage at the world’s second-largest copper mine.
Freeport said the incident was being investigated and the circumstances were inconsistent with safety protocols.
The strained relations between the company and labour unions casts doubt on whether the mine will be able to supply copper to customers.
Copper traders have raised concern whether the miner will default on shipments, especially since the firm has declined to release data about stockpile sizes. They have also brought up additional questions about the expansion plan for the underground mine given the tunnel collapse on May 14.
Other analysts said the expansion will likely continue as deposits in the open pit are depleting.
Recent accidents may also affect contract extension negotiations between the Indonesian government and Freeport, which wants to operate past 2021.
Related
Freeport reopens pit mining at Grasberg in Indonesia
Freeport execs face probe over collapsed tunnel in Indonesia, mine to restart soon
Image: Freeport screengrab
