Recently, Freeport-McMoRan Copper & Gold Inc. (FCX) suspended its operations at a massive gold and copper mine in eastern Indonesia due to tension among employees. Operations at the mine were suspended as some workers, who were part of the strike, were committing acts of violence and intimidation against supervisors and other workers. As per the company, the management is working with local authorities and union officials to resolve the issue.
Some 8,000 unionized employees in Grasberg suspended their work for four months last year demanding pay hikes. Freeport had a force majeure in place since October 2011 on some concentrate exports from the mine, indicating that the terms of its contracts with customers are not in effect. The Grasberg strike ended in December 2011 with a deal for a pay hike, leading workers to gradually return to work, but the force majeure has yet to be officially lifted.
In January 2012, Freeport reported a profit of $640 million or 67 cents per share in the fourth quarter of 2011 versus $1.5 billion or $1.63 per share in the same quarter of 2010. The profit surpassed the Zacks Consensus Estimate by 3 cents per share.
Revenues in the quarter were $4.2 billion versus $5.6 billion in the prior-year quarter, surpassing the Zacks Consensus Estimate of $3.8 billion. Consolidated sales from mines totaled 823 million pounds of copper, 133,000 ounces of gold and 19 million pounds of molybdenum compared with 941 million pounds of copper, 590,000 ounces of gold and 17 million pounds of molybdenum in the fourth quarter of 2010.
Freeport-McMoRan’s consolidated sales from mines for the year 2012 are expected to approximate 3.8 billion pounds of copper, 1.2 million ounces of gold and 80 million pounds of molybdenum, including 875 million pounds of copper, 425 thousand ounces of gold and 20 million pounds of molybdenum for first-quarter 2012.
Headquartered in Phoenix, Arizona, Freeport-McMoRan Copper & Gold Inc. is engaged in mineral exploration and development; mining and milling of copper, gold, molybdenum and silver; as well as smelting and refining of copper concentrates.
The company conducts its operations primarily through its principal operating subsidiaries, PT Freeport Indonesia, Freeport-McMoRan Corporation (formerly Phelps Dodge) and Atlantic Copper. Its major competitors include Newmont Mining Corp. (NEM) and Southern Copper Corp. (SCCO). It currently retains Zacks #3 Rank on its stock, which translates into a short-term Hold rating.Read the Full Research Report on FCX
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