May 15, 2013

INDONESIA: Freeport Copper Mining Tunnel Collapsed, Four Miners Were Killed And 25 Remain Trapped, Rescue Effort Underway

Bloomberg news
written by Liezel Hill & Yoga Rusmana
Wednesday May 15, 2013

A unit of Freeport-McMoRan Copper & Gold Inc. (FCX), the world’s biggest publicly traded copper producer, said four people were killed and 25 remain trapped after part of a tunnel collapsed at its Grasberg complex in Indonesia.

Ten survivors have been evacuated and are reported to be in a stable condition, PT Freeport Indonesia said in an e-mail today. One survivor has been airlifted to Jakarta for further treatment and five more are scheduled to be airlifted to the city tomorrow, as rescue and recovery work continues, it said.

Thirty-nine workers may have been in a classroom at an underground training facility when the accident occurred, the unit said. Phoenix-based Freeport said earlier there may have been 40 workers in the classroom and that it didn’t expect there will be a material effect on mining, milling operations or development work.

Grasberg in Papua province includes underground and open-pit operations and is the world’s third-biggest copper mine ranked by production capacity, according to data compiled by Bloomberg. It also produces gold. Output was disrupted in 2011 and 2012 after labor unrest and violence at the site. Indonesia accounted for $3.92 billion of revenue last year, or 16 percent of Freeport’s sales.

Rescue Efforts

“So far the rescue efforts have been hampered by the confined and restricted space within the tunnel, forcing them to use manual jacks, saws and wheelbarrows instead of heavy earth moving equipment,” PT Freeport Indonesia said in the statement.

Yesterday’s accident happened outside of areas being mined, about 500 meters (1,640 feet) from the entrance to the Big Gossan underground mine.

Freeport fell 1.2 percent to close at $31.57 yesterday in New York. The shares have declined 7.7 percent this year, compared with a 20 percent drop in the 115-company Bloomberg World Mining Index.

BHP Billiton Ltd.’s Escondida mine and Codelco’s Codelco Norte operation, both in Chile, were the largest copper mines by capacity in 2011, according to data compiled by Bloomberg.

“This is a very sad day for us,” said Freeport Indonesia President Director Rozik B. Soetjipto. “Our thoughts and prayers go out to all the victims and their families and we will continue to do our best to evacuate the remaining workers.”

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