Ok Tedi board approves PNG copper mine restart from March 1

The mighty Fly River twisting through the Western Province

The mighty Fly River twisting through the Western Province

Melanie Burton | Reuters | 5.02.2016

Papua New Guinea copper miner Ok Tedi Mining Ltd said its board has approved a restart of its operations on March 1, more than five months after the mine was put on care and maintenance when drought cut off its transport links.

The move will bring further metal to a copper market which is already reeling from a prolonged downturn in prices and a surge in mine supply just as demand from China cools, forcing high cost producers to cut output or shut down.

Ok Tedi, which declared force majeure on its sales contracts on Aug. 17, said at the time that it expected to lose 65,000 tonnes of copper in concentrate after the El Nino weather pattern sank river water levels.

“Our plans for the progressive restart of operations on 1 March 2016 were today approved by the OTML Board of Directors,” Managing Director Peter Graham in a statement on its website on Friday.

The company was still awaiting safety approval from the country’s Mineral Resource Authority prior to the restart, the statement said.

Drought made river traffic on the Fly River into Ok Tedi’s main river port at Kiunga unreliable and also affected operations at the Ok Menga power station, the mine’s main source of power.

El Nino disrupted production across a swathe of commodity producers from late last year, parching countries across the north west of the Pacific rim such as Papua New Guinea and Philippines and bringing heavy rains to others like Chile and Peru.

Indonesian neighbour Freeport-McMoRan also blamed El Nino as it cut its 2015 forecast for copper concentrate sales from Indonesia in September as water shortages affected its milling operations.

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Filed under Financial returns, Papua New Guinea

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