The exports of copper concentrate from Indonesia-based Grasberg mine are predicted to drop this year due to a decline in production as operations shift from open pit to underground mining.

Energy and Mineral Resources Ministry minerals director Yunus Saefulhak said that the exports are expected to decline from around 1.2 million tonnes last year to 200,000 tonnes this year.

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Grasberg mine is operated by US mining firm Freeport McMoRan through a subsidiary.

The firm expects the decline to take place due to the transition from open pit to underground operations early this year. However, the company expects production to ultimately increase due to the expansion of a related underground project.

The production decline is expected to reduce Grasberg’s revenue over the next few years. This comes just as state-owned mining firm PT Indonesia Asahan Aluminium (PT Inalum) is acquiring PT Freeport Indonesia.

Grasberg mine produced 270,000 tonnes of ore per day in 2018.

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Saefulhak said: “Concentrate production in 2019 will decline because of the change from open pit to underground [mining].”

Grasberg will generate around 1.2 million tonnes of copper concentrate in this year, as against 2.1 million tonnes in 2018.

Consumption in the home market is expected to increase to one million tonnes this year, compared to 800,000 tonnes in 2018.

A spokesman for Inalum said the decline was in line with expectations.

Inalum spokesman Rendi Witular told Reuters: “Production will resume normally after 2022, and Inalum has forecast net profit to average more than $2 billion annually when the transition is slated to be completed after 2022.”

“Concentrate production in 2019 will decline because of the change from open pit to underground [mining].”

Inalum holds a majority stake in Freeport Indonesia.

Revenues in Freeport Indonesia are expected to decline from $6.3bn in 2018 to $3.1bn in 2019, and again achieve its peak at $7.5bn in 2023.

In December 2018, the recently-appointed Freeport Indonesia CEO Tony Wenas said Grasberg production will begin to increase again in 2020.