US miner Freeport-McMoRan on Wednesday declared force majeure on shipments from its Indonesian mine to avoid liability on existing orders after production was suspended due to an accident.
Production was suspended on May 15 at Grasberg, a huge gold and copper mine in the remote eastern province of Papua, the day after a tunnel caved in, killing 28 workers.
Freeport’s Indonesian subsidiary restarted some operations after around two weeks but the government ordered a halt in all production just days later when a worker was killed in a new accident.
Officials say an investigation into the tunnel collapse must be completed before operations can resume.
On Wednesday Freeport-McMoRan said that it had declared a force majeure at Grasberg — a clause in contracts that removes liability from a company when it cannot fulfil its obligations due to circumstances beyond its control.
“Because of the temporary disruption, PT-FI (Freeport’s Indonesian subsidiary) has notified its customers of a force majeure event under its concentrate sales agreements,” said a company statement.
It affects shipments of concentrate, a semi-processed ore that is sent to smelters.
Between May 15 and June 11, Freeport’s Indonesian subsidiary lost about 80 million pounds of copper and 80,000 ounces of gold production, the statement said.
Freeport’s Indonesian unit is “actively working with government authorities on a phased restart of operations”, it added.
Freeport last declared a force majeure at Grasberg in 2011, when thousands of workers went on strike at the mine demanding better pay.
The strike lasted three months and only ended when the company agreed to a huge pay hike.
Freeport declares force majeure at Indonesia mine
