Indonesia’s sole copper smelter, PT Smelting, is negotiating with suppliers of copper concentrate as a result of operations being temporarily halted at the Grasberg mine in Papua, Indonesia. The Grasberg mine, which is run by Arizona-based Freeport McMoRan Copper and Gold Inc, supplied 80 percent of the smelting company’s copper concentrate.
Operations at Grasberg mine were suspended on May 15th after a cave-in of a training facility led to 38 people being trapped. Only ten survived the accident. The mine briefly resumed operations on May 28th, but once again stopped production when a second accident led to the death of another person.
The mine produces 220,000 tons of copper per day, and is currently the second largest copper producer in the world. A three-month suspension of operations will decrease the global supply of copper by half a percent, which will likely lead to higher copper prices and may adversely affect the Indonesian economy.
Before the accidents at Grasberg, PT Smelting was receiving shipments of copper concentrate weekly, but has only received one shipment since the suspension. If the company cannot find a reliable alternative supplier, it will be forced to shut down temporarily.
A Japanese smelter, Pan Pacific Copper, which also depends on copper concentrate from Grasberg mine, is also seeking alternative suppliers.
PT Smelting is located in Gresik, East Java and is owned by several foreign companies including Mitsubishi Materials Corporation. PT Smelting sells copper to both Indonesian companies and companies from other countries in Southeast Asia.
(Edited from Reuters)