Wednesday, October 9, 2024

Copper output at Freeport's Manyar smelter delayed until November

September 30, 2024

Two sources familiar with the situation said that due to leakages of water and steam during an initial testing period, copper production at Freeport McMoRan’s giant Manyar smelter will be delayed until late November.

Analysts expect that new supplies will be available soon. If the $3.7 billion smelter is delayed, it could support the price.

Sources said that Manyar would produce its first batch in September and samples will be sent to clients for testing in October, ahead of the annual negotiations for buying and selling copper in 2025.

They added that samples will now be delivered in November.

The construction of Manyar was finished in June. Freeport, a U.S. copper mining company, said at the time that it would begin producing copper within the next few months. It also stated its goal to ramp up production by 2024.

Freeport has not given a specific date for production to begin.

The startup of the new copper-smelter in Indonesia is continuing to progress. Freeport responded to a comment request by saying that teams are working on issues discovered during startup, and remediation efforts are progressing.

"The issues being dealt with are not uncommon in a large and complex smelter's startup. We do not expect material delays to reach full capacity."

Manyar was built in order to process copper from Freeport’s Grasberg Mine, the second largest mine in the world.

According to two other sources, Freeport does not plan to sell copper concentrates it doesn't use to other smelters that have been facing severe shortages and negative treatment fees (TCs), which are fees paid by smelters to convert concentrate into metal.

Manyar has the capacity to process nearly 3% of world mined copper supplies, or 1.7 million tons per year.

A source said Freeport stopped production at Manyar in order to fix the leaks.

The source added that Grasberg’s concentrate feedstock will be stored to be processed later. "Freeport places a high priority on safety. They won't take any risks."

Freeport reported in May that it was planning to export up 900,000 tons of concentrates, the exact amount depending on how Manyar ramps up. (Reporting and editing by David Evans; Pratima Deai and Julian Luk)

(source: Reuters)

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