Freeport told to cut production

PT Freeport Indonesia, a giant gold mining operation in Papua province, must cut down its production following a fatal landslide accident at its Wanagon Lake waste dumping site.

Minister of Mines and Energy Susilo Bambang Yudhoyono said on Monday that the amount of the production cutback would be jointly decided with the State Ministry of Environment and the Environmental Impact Management Agency (Bappedal).

Susilo didn't provide further details.

Freeport currently operates at a daily production level of 230,000 metric tons of ore.

The government had temporarily banned Freeport from dumping its overburden waste materials into the Wanagon Lake following a recent landslide that killed four until Freeport had been able to design an acceptable safety measures.

Freeport had now located a new dumping site at the Carstenz area but the capacity was not as large as the one at the Wanagon Lake.

Susilo's comments contradicted earlier remarks made by director general of mining Surna T. Djajadiningrat and secretary general of mining Djoko Darmono who told Petromindo recently that there's no need for Freeport to cutback production. The two said that Freeport only need to adhere what's stipulated in its mining contract of work.

Freeport Indonesia is 81.28 percent owned by U.S.-based Freeport McMoRan Copper & Gold.

Meanwhile, Susilo said that the government had no plans to revise the mining contract of Freeport. (*)