Mine collapse hits Freeport-McMoRan 2Q net income

Freeport-McMoRan 2nd-quarter net income falls as Indonesia mine collapse hurts gold sales

Associated Press

PHOENIX (AP) -- Freeport-McMoRan Copper & Gold Inc. said Tuesday that its net income fell 32 percent in the second quarter as a mine collapse in Indonesia curtailed its gold production.

An underground training facility in the Papua province collapsed on May 14, killing 28 people and injuring 10 others. The Indonesian government ordered a halt to operations at the mine while it investigated the collapse. The government approved the resumption of milling and underground mining operations on July 9 and Freeport-McMoRan said Tuesday that work has resumed at the Grasberg mine.

Freeport-McMoRan's net income sank to $482 million, or 49 cents per share, from $710 million, or 74 cents per share. Revenue fell 4 percent, to $4.29 billion.

Analysts expected net income of 43 cents per share and $4.34 billion in revenue, according to FactSet.

Shares of Freeport-McMoRan rose 67 cents, or 2.3 percent, to $29.82 in morning trading.

Gold sales fell 35 percent to 173 thousand ounces. Copper sales grew by 3 percent to 951 million pounds and molybdenum sales increased to 23 million pounds from 20 million pounds. Freeport-McMoRan also produced 5 million barrels of oil equivalent.

In June the company completed a three-way combination with oil and gas producer Plains Exploration & Production Co. and energy producer McMoRan Exploration Co. Freeport-McMoRan valued the two transaction at about $19 billion including $5.5 billion in cash, $2.8 billion in stock, and $10 billion in debt.

Freeport-McMoRan said it is working to reduce capital spending and plans to sell some oil and gas assets in the Gulf of Mexico.

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