TOKYO/JAKARTA, Feb 13 (Reuters) - Japan’s Mitsubishi Materials Corp aims to replace workers and resume operations at Indonesia’s main copper smelter in early March after a labor strike forced it to halt operations except for the refining process on Jan. 19, a spokesman said.
The Gresik smelter, owned by PT Smelting, produced about 190,000 tonnes of copper cathode in the year to March 2016 and had planned to produce 260,000 tonnes this financial year through March 31, without taking into account the impact from the strike, Mitsubishi Materials spokesman Hiroshi Shimizu told Reuters.
PT Smelting is 60.5 percent owned by Mitsubishi Materials, while Freeport-McMoRan Inc’s Indonesian unit holds 25 percent. The Gresik smelter on Java island takes up to 40 percent of Freeport’s output of copper concentrate from its Grasberg mine in Papua province, the world’s second-largest copper mine.
“PT Smelting has sent notice of dismissal to its about 300 workers late last month and is now hiring new workers with an aim to resume operations as early as March,” the spokesman said.
Indonesia introduced new rules on Jan 12 that require miners including Freeport to develop additional smelting capacity and halt their exports until they obtain new permits.
As a result of the rules, Freeport warned it could be forced to slash output by around 70 million pounds of copper per month and lay off workers at Grasberg, PT Smelting’s main source of copper concentrate.
As of Monday, Freeport had not resolved the permit issues, a Jakarta-based spokesman told Reuters. He declined to comment on Grasberg’s production status.
“Exports are still banned as a result of the regulations that were issued in January,” Freeport Indonesia spokesman Riza Pratama said. “There has been no agreement.”
The Mitsubishi Materials spokesman said PT Smelting has also stopped exporting anode slime, a byproduct of copper concentrate processing that includes other metals such as gold and silver, due to the new rules.
Previously, Mitsubishi had sent anode slime to its Naoshima plant in western Japan to extract gold and silver, providing the company with additional revenues from the operation.
“We have applied for an export permit with Indonesian government and we hope to resume exports of slime when PT Smelting restarts operations in March,” the spokesman said. (Reporting by Yuka Obayashi in TOKYO and Fergus Jensen in JAKARTA; Editing by Gopakumar Warrier)