Freeport's copper concentrate exports will only temporarily ease global shortages

LONDON, Dec 9 (Reuters) - Copper concentrate exports from Freeport-McMoRan's FCX.N unit in Indonesia will ease global shortages, but probably only briefly and if the Indonesian government allows them, industry sources said.

Shortages due to stoppages, including at operations owned by First Quantum FM.TO, and China's massive expansion of smelters to produce copper metal have intensified competition for concentrate since last year.

A fire at PT Freeport Indonesia's (PTFI) $3.7 billion Manyar smelter halted operations in October. PTFI is owned by Freeport and state-owned Indonesian company MIND ID, with stakes of 48.8% and 51.2% respectively.

"The amounts Freeport exports depend on how long it takes to fix the problem," said one source with knowledge of the matter, adding: "If the (Indonesian) government doesn't grant (export) permits Freeport may have to stop mining."

Manyar has capacity to process 1.7 million metric tons of concentrate and produce 480,000 tons of copper cathode a year.

The cause of the fire is still under investigation and has yet to be corrected, sources with knowledge of the matter said.

Freeport McMoRan said in response to a request for comment: "PTFI has substantially completed initial damage assessments and remediation plans are in progress ... PTFI currently expects to recommence start-up operations by mid-2025."

"PTFI is working with the Indonesian government to allow continued exports of copper concentrates until full ramp-up of PTFI's new downstream processing facilities is achieved, including seeking an increase to the permitted quota for 2024."

Indonesia's mining minister Bahlil Lahadalia told an industry summit last week the government had yet to decide whether to approve Freeport's request for an export licence.

Manyar was built to process copper concentrate from Freeport's flagship Grasberg mine in Indonesia, the world's second biggest copper-gold mine, due to the Indonesian government trying to discourage exports of concentrate.

Indonesia's government wants miners to produce metal locally to add value and boost its revenues.

Industry sources said Freeport's concentrate will not resolve the problem of shortages, which have hit the treatment and refining charges (TC/RCs) paid by miners when they sell concentrate to be turned into metal.

Chilean miner Antofagasta ANTO.L and Jiangxi Copper 600362.SS recently agreed significantly lower copper concentrate processing fees for 2025, according to sources.

Treatment charges turned negative in April for the first time ever, meaning smelters had to pay miners to turn concentrate into metal instead of being paid.

(Reporting by Reuters; editing by Alexander Smith)