Freeport reports Q3 Indonesian production decline
Thursday, October 16 2003 - 05:12 PM WIB
FCX, through its subsidiary PT. Freeport Indonesia (PT-FI), runs the world?s biggest copper and gold mining in the easternmost province of Papua
FCX said during the quarter, mill throughput averaged 211,400 metric tons of ore per compared with 219,800 metric tons of ore in the third quarter of 2002.
PT-FI's third-quarter copper production and sales were higher than previous estimates but were lower than the 2002 period, reflecting the mining of lower-grade ore than was mined during the third quarter of 2002. Despite lower grades, PT-FI?s Copper realized prices improved by 21 percent to $0.81 per pound in the third quarter of 2003 from $0.67 in the third quarter of 2002. Current LME copper prices approximate $0.88 per pound.
Gold production and sales for the third quarter of 2003 were also higher than previously estimated but were lower than the year-ago period primarily because of lower grades and recoveries. Gold realized prices, before hedging, improved by 17 percent to $367.72 per ounce in the third quarter of 2003 from $314.19 per ounce in the third quarter of 2002.
Third-quarter 2003 sales exceeded previous quarterly estimates primarily because of the timing of mining ore previously forecast to be mined in the fourth quarter of 2003. As a result of the slippage in the Grasberg open pit, PT-FI has revised its fourth-quarter 2003 estimates and expects its sales for 2003 to approximate 1.33 billion pounds of copper and 2.45 million ounces of gold, with sales for the fourth quarter of 2003 estimated to approximate 200 million pounds of copper and 250,000 ounces of gold. These estimates are subject to change depending on the timing of restoring access to higher grade sections of the Grasberg pit.
FCX reported that after fatal incident that killed eight employees at Grasberg open pit on October 8, clean-up activities to restore access to the affected areas of the pit have commenced and are currently anticipated to be completed during the fourth quarter.
?The causes of the accident continue to be studied. PT-FI is currently conducting operations in the sections of the Grasberg pit unaffected by the slippage and in its underground operations, milling facilities, and concentrate shipping operations. The area affected by the slippage, comprising approximately five percent of the surface area of the massive Grasberg pit, includes two active mining areas which were scheduled to be mined in the fourth quarter of 2003, resulting in a deferral to future periods. The event is not expected to affect long-term mine plans and production rates,? said FCX.
Production from PT-FI's Deep Ore Zone (DOZ) underground mine averaged 42,600 metric tons of ore per day during the third quarter of 2003, representing 20 percent of third-quarter 2003 mill throughput. DOZ operations continue to perform above design capacity of 35,000 metric tons of ore per day and studies are ongoing to evaluate additional low-cost options to increase production from the DOZ underground operation. The Intermediate Ore Zone (IOZ) underground mine was depleted during the third quarter of 2003. During its approximate 10-year life, the IOZ operation produced almost 30 percent more copper and gold than the initial reserve estimate.
At September 30, 2003, FCX's concentrate sales included 155.6 million pounds of copper, priced at an average of $0.81 per pound that remain subject to final pricing over the next several months. (alex)
