Financial, human toll of ‘horrific’ Big Gossan accident costs FCX dearly – by Dorothy Kosich ( – July 24, 2013)

28 fatalities, the loss of millions of pounds of copper and thousands of ounces of gold, as well as creating a new oil & gas subsidiary, slammed FCX’s 2Q.

RENO (MINEWEB) – The tunnel collapse in a Freeport-McMoRan Copper & Gold training facility in Indonesia “was an incredibly horrific convergence of events that came together because of the geology of the rock and the influence of water and air on our ground support facilities, and unfortunately just happened as we were having this training meeting,” CEO Richard Adkerson told analysts during a conference call Tuesday.

On May 14th, the accident occurred at PT Freeport Indonesia, which resulted in 28 fatalities and 10 injured when the rock structure above an underground ceiling for a training facility collapsed in an unprecedented and unexpected event. While the accident occurred outside of mining operations, mining and processing activities at the Grasberg complex were temporarily suspended as Indonesian government authorities also conducted inspections.

“In the quarter, we lost roughly 125 million pounds of copper and 125,000 ounces of gold,” said Adkerson. “The full year impact will be greater than that. We estimate 230 million pounds of copper and 250,000 ounces of gold.”

Nevertheless, Adkerson observed, “That resource is still there. …We’ll produce it in the future. But the impact for the year reflects a couple of factors: One is the time it takes to ramp up underground to get back to full production levels; plus, as you’ll recall in the first quarter, we talked about how we were going to access high-grade ore at the end of the year under our mine plans. Now some of that higher-grade ore will be pushed out into future years.”

For the first six months of this year, Freeport reported nearly 1.9 billion pounds of copper production, up from 1.72 billion pounds for the same period of last year. For the second quarter of the year, copper production was 909 million pounds, compared to 887 million pounds for the second-quarter 2012.

The company reported 386,000 ounces of gold production during the first half of this year, down from 503,000 ounces of gold for the first half of last year. For the second quarter of this year gold production declined from 251,000 ounces in the second-quarter 2012 to 151,000 ounces.

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