The production at the world’s largest gold and copper mine, Freeport-McMoRan Copper & Gold Inc. (FCX) continues normally despite the landslide that closed a tunnel that links the Grasberg mine with the nearby village in Indonesia’s province of Papua.
No casualties were reported. Shipments are expected to continue as normal since materials travel to the port by pipeline.
Freeportowns 90.64% of PT Freeport Indonesia, which operates the huge Grasberg copper and gold mine, while the Indonesian government owns the remainder.
Freeport’s operations also include copper mines in Arizona and New Mexico and molybdenum mining operations in Colorado, which is the world’s largest publicly traded copper company.
Copper production at the Grasberg mine fell to 1.22 billion pounds last year from 1.41 billion a year earlier. Gold output declined to 1.79 million ounces from 2.57 million.
In the fourth quarter of 2010, Freeport posted excellent net income of $1.5 billion or $3.25 per share, outshining the Zacks Consensus Estimate of $2.87 per share.
Quarterly revenues of $5.6 million surpassed the Zacks Consensus Estimate of $5.19 billion and were up 21.5% year over year. Higher metal prices drove sales and earnings in the quarter.
Freeport expects to sell 1.0 billion pounds of copper and 1.3 million ounces of gold in fiscal 2011, down from the 2010 sales of 1.2 billion pounds of copper and 1.8 million ounces of gold, as the Indonesia unit is expected to mine lower grade ore at the Grasberg pit.
Freeportcompetes with Newmont Mining Corp. (NEM), Southern Copper Corp. (SCCO) and privately held Corporación Nacional del Cobre de Chile.
Freeport shares maintain a Zacks #3 Rank, implying a short-term (1-3 months) Hold recommendation.
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