Jet fuel shortage not affecting production at Grasberg - Freeport Indonesia

The shortage is curbing flights to the airport near the giant copper and gold mine but the group says operations are not at risk

JAKARTA (Reuters) - 

A shortage of jet fuel curbing flights to an airport near the giant Grasberg copper and gold mine in Indonesia's Papua would not hit operations and production, a spokesman for Freeport Indonesia said on Wednesday.

Jet fuel supplies at Timika's airport had been running low due to extra flights over the holidays and limited fuel storage, the spokesman Mindo Pangaribuan said.

"The jet fuel shortage supply will not affect PT Freeport Indonesia's operation and production at Grasberg," said Pangaribuan.

Grasberg accounts for nearly 40% of Freeport McMoran Copper&Gold (FCX.N: Quote) total copper reserves of 93 billion pounds and has the world's largest gold reserves.

Local media reported Indonesia's national airline Garuda had temporarily suspended flights to Timika, the main town near Freeport's huge Grasberg mine, after it was not allowed to refuel at the weekend at the airport operated by a joint venture with Freeport.

But Pangaribuan said airport operator PT Airfast Aviation Facilities Company (AVCO) had notified all commercial carriers about low jet fuel supplies at Timika and had supplied fuel to Garuda on Monday and Tuesday.

AVCO has a joint venture with Freeport Indonesia for ground handling at Mozes Kilangin airport in Timika.

A Garuda spokesman said the airline, which normally runs a daily flight between Jakarta and Timika, was reviewing whether to resume flights after receiving a letter from the head of the airport in Timika pledging to supply jet fuel.

Aviation is vital link to areas in remote Papua but is often hazardous due to rugged, high mountains covered in thick jungle and rapidly changing weather conditions.

(Reporting by Dicky Kristanto and Fitri Wulandari; Editing by Ed Davies)

© Thomson Reuters 2010 All rights reserved

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