Exclusive-Copper output at Freeport’s Manyar smelter delayed until November
LONDON : Copper production at Freeport-McMoRan’s new giant Manyar smelter in Indonesia will be delayed until November due to water and steam leakage during an initial test period, two sources with knowledge of the matter said.
Further delay from the $3.7 billion smelter, one of the world’s largest, could potentially support prices as analysts expect new supplies to hit the market soon.
Manyar was expected to produce its first batch of output in September, with samples due to be delivered to potential clients in October for quality testing ahead of annual negotiations to buy and sell the copper for delivery in 2025, the sources said.
The samples would now be delivered around November, they added.
Construction of Manyar was completed in June. At the time U.S. copper miner Freeport said it would start producing copper in the following months and that it was targeting a full ramp up of production by the end of 2024.
Freeport did not give a date for the start of production.
“The startup of the new copper smelter in Indonesia continues to progress. Teams are addressing issues uncovered during startup and remediation activities are advancing,” Freeport said in response to a request for comment.
“The issues being addressed are not unusual in the context of a large, complex smelter startup, and we do not anticipate material delays in reaching full capacity.”
Manyar was built to process copper concentrate from Freeport’s Grasberg mine which is the world’s second biggest.
Two other sources with knowledge of the matter said Freeport currently has no plan to sell the copper concentrate it does not use to other smelters which have faced severe shortages this year and negative treatment charges (TCs), fees paid to smelters for converting concentrate to metal.
Manyar will have capacity to process 1.7 million metric tons of copper concentrate annually to 480,000 tons of copper a year, nearly 3 per cent of global mined supplies of the metal used to conduct electricity.
One source with knowledge said Freeport halted production at Manyar to focus on mending the leaks.
“There are always teething problems with the start-up of a big, complex facility that have to be fixed for safety reasons,” the source said, adding that Grasberg’s concentrate feedstock would be stored for processing later. “Freeport is big on safety, they aren’t going to take any risks.”
In May, Reuters reported Freeport was preparing to export up to 900,000 tonnes of concentrates this year, with the exact quantity depending on the ramp up of Manyar.
