Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Freeport McMoRan Copper and Gold (NYSE: FCX) said production at its Grasberg copper-gold mine in Indonesia may be severely affected by a ban on unprocessed ore exports that takes effect in 2014.
The US-based miner, reports Reuters, also said it will try to find a way around the rules when renegotiating its contract with the Indonesian authorities.
Grasberg, the world’s largest gold and second-largest copper mine with a history that dates back to the 1930s, resumed production in July, after an almost two months stoppage following the completion of a government probe into recent accidents at the mine.
As a result, the mine is expected to produce only 80% of its 2013-targeted output of 500,000 tonnes of copper, and 1.25 million ounces of gold. Grasberg also produces silver.
Freeport’s current contract to operate Grasberg in the Papua province expires in 2021.
2 Comments
Mike Failla
Talk about a troubled operation! Wonder what is next?
M. H
I do not think that the indonesians has the smelter capacity YET. But one thing is sure, it is risky to mine in Indonesia. Look at the time it took for Kingsrose getting permit to restart (more or less) because of one accident.