Freeport McMoRan Suspends Copper Production at Manyar Smelter After Fire Incident

Fire Disrupts Copper Smelting Operations in East Java
Freeport McMoRan has temporarily halted operations at its Manyar smelter in Gresik, East Java, Indonesia, following a fire that broke out on October 14, 2024. The fire occurred in the clean gas separation unit, a critical piece of equipment that converts carbon dioxide into sulfuric acid, an essential process for copper refining. The blaze was extinguished by the following day, October 15, but the damage to the facility’s key operations has led to a suspension of copper cathode production. As a result, Freeport has postponed refined copper sales, and full-scale production at Manyar will not resume until the facility is fully repaired and operational.

Impact on Copper Production and Refining Operations
The Manyar smelter, which began operations on September 23, 2024, is designed to process up to 1.7 million tonnes of copper concentrate per year, producing up to 600,000 tonnes of copper cathodes annually. The clean gas separation facility is crucial for maintaining the smelting process, as it captures sulfuric gas required for refining. Without this key unit in operation, Freeport cannot produce copper cathodes, leading to a temporary halt in production.

Tony Wenas, CEO of Freeport Indonesia, explained that the suspension of operations was necessary due to the fire’s impact on the facility’s ability to capture and process sulfuric gas. The company is now focused on repairing the damage and restoring operations, but a timeline for when production will fully resume has not yet been provided.

Setback to Freeport’s Expansion Plans in Indonesia
The Manyar smelter is part of Freeport McMoRan’s broader strategy to expand its refining capabilities in Indonesia. The company had hoped to ramp up its operations to full capacity by early 2025, marking a significant step in its production growth in the region. The incident at Manyar is a setback for these plans, particularly as Freeport has been working to increase its copper output in Indonesia. With the fire disrupting operations at the new smelter, the company will now have to adjust its production forecasts, potentially delaying its growth trajectory for the rest of the year.

In addition to Manyar, Freeport operates the Grasberg mine in Papua, Indonesia, one of the largest copper and gold mining complexes in the world. However, the Manyar smelter was seen as a key asset to Freeport’s refining capacity and its ability to process the copper concentrate from Grasberg and other mining operations in Indonesia.

Financial Impact and Outlook for the Future
While Freeport has not disclosed the financial implications of the fire, the suspension of cathode production at Manyar will likely affect the company’s copper sales for the remainder of 2024. The incident comes at a time when copper prices are volatile, and any delay in production could result in missed revenue opportunities. Freeport is expected to focus on repairing the Manyar facility as quickly as possible to minimize the financial impact and return to its full production capacity. The company will likely revise its short-term production forecasts once a clearer timeline for repairs is established.

Given the importance of the Manyar smelter to Freeport’s refining operations, the recovery process will be critical to the company’s ability to meet its copper output targets in the near term. Additionally, this incident highlights the challenges that mining companies face in managing complex refining operations, where even small disruptions can have significant financial consequences.