Freeport cut squeezes China copper smelters: Report

Lower production from PT Freeport Indonesia's giant Grasberg copper mine may force ore-hungry Chinese smelters to cut production next year, industry officials in China was quoted as saying on Friday.

They said overseas concentrate sellers had hesitated to confirm offers for 2004 shipment following the Grasberg production cut, which has deepened concerns about global shortages.

"Freeport's incident for sure will affect the concentrate market. It's unclear yet how big (the effect) will be," a Chinese smelter official was quoted by Reuters as saying.

The manager of another large Chinese smelter said no major producers had yet decided to cut production as a result of the concentrate shortage. "They haven't had enough time to think about it," he said.

But some Chinese smelters have cut production this year due to low treatment and refining charges (TCs and RCs), fees paid by sellers to smelters for processing the concentrate into copper.

China imports more than half of its demand for concentrate, the raw material used to produce copper.

PT Freeport Indonesia, a unit of U.S.-based Freeport McMoRan Copper & Gold Inc, said on Wednesday it expected to resume full production at its open pit Grasberg mine by year-end following a landslide on October 9 that killed at least four people.

The miner expected to lose around 70 million lb (32,000 tons) of copper, which would lower its sales volumes in 2003 to 1.33 billion lb (604,000 tons), down from an earlier estimate of 1.4 billion lb. (*)