Batu Hijau copper mine set to beat 2000 target

Indonesia's $1.8 billion open-pit Batu Hijau copper mine should beat its annual production forecast of 686,500 metric tons of copper concentrate in its first full year of operation, according to Tom DeMull, process manager at the mine, Dow Jones reported.

Located on the eastern Indonesian island of Sumbawa, the Batu Hijau mine is run by PT Newmont Nusa Tenggara, or NNT, a joint venture between U.S.-based Newmont Mining Corp. (NEM), a Japanese consortium led by Sumitomo Corp. (J.SUT), and Indonesia's PT Pukuafu Indah.

During the first five months of the year, the mine produced 227,000 tons of copper concentrate, with an average copper yield of 30%-31%, DeMull said in an interview. Output will rise as it moves toward optimum efficiency and deeper deposits yield richer mineral content, thus making it possible to exceed the company's earlier forecast for this year, he said.

"We will see better quality as we dig deeper into the deposit body," DeMull said.

The mine processed an average 120,000 tons of ore daily in the five-month period, with throughput rising by June to 135,000 tons/day. This is forecast to rise to 160,000 tons in 2001, said mine operation supervisor Roger Gross.

Of the copper produced, about 85% was shipped to smelters in Japan, Korea and Europe, DeMull told Dow Jones Newswires.

Copper concentrate output is expected to be ramped up next year to 806,000 tons and it should peak at 971,000 tons in 2002, before slipping back to 876,000 tons, according to company estimates. This would give NTT around 2.5% of world copper production over the next five years.

The overall copper production cost at the mine is projected at 55 U.S. cents a pound, or about $1,200/ton, in 2000.

In addition to its copper content, NTT's concentrate also yields between 0.012 and 0.015 ounces of gold a ton.

The mine has reserves of about 4.8 million tons of copper and 11.8 million ounces of gold. It is expected to operate for at least 20 years. (*)