Cash-starved Ok Tedi starts cutbacks

COPPER production at the giant Ok Tedi mine in Papua New Guinea has been suspended for the fourth week. Small ruptures in the mine’s pyrite concentrate waste pipeline have cost the operation $US180 million in lost revenue so far.
Cash-starved Ok Tedi starts cutbacks Cash-starved Ok Tedi starts cutbacks Cash-starved Ok Tedi starts cutbacks Cash-starved Ok Tedi starts cutbacks Cash-starved Ok Tedi starts cutbacks

With the production plant shut down, operator Ok Tedi Mining Limited said it was losing $6 million a day in lost revenue.

Yesterday the company started slashing costs by suspending expenditure in areas such as non-essential maintenance, business travel and overtime work.

The company also ceased its "engagement" of consultants, contractors and casual labour.

The four ruptures to the waste pipeline caused some spillage into the environment last month and a clean-up and monitoring program is continuing.

Ok Tedi Mining said it had applied to the PNG government for a "change notice" a week ago to restart production using interim alternatives for managing its tailings while the pipeline is repaired.

This application is still awaiting government approval.

"OTML management hopes the program of cost cutting introduced today will help to maintain the business while awaiting government approval to recommence production," managing director Nigel Parker said.

The cause of the pipeline ruptures is being investigated.

The mine typically produces around 160,000 tonnes of copper and 540,000 ounces per annum of gold.

However, production is scheduled to fall from 2014 through a proposed underground extension to the big open cut mine.

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