Freeport-McMoRan Copper & Gold said it was taking steps to restore full operations at Grasberg, although no update was provided Thursday on the force majeure declaration now in place.
The 90 day strike at the Grasberg mine in Indonesia and the 61 day strike at Cerro Verde hit Freeport-McMoRan Copper & Gold's bottom line hard during the fourth quarter of 2011, sending profits spiraling downward by nearly 60%.
Nevertheless, in a conference call with analysts Thursday, Mr Richard Adkerson CEO of Freeport asserted that "When you step back and look at those challenging circumstances to see the financial result for the year where we exceeded our records that we had established in 2010-it's really a gratifying accomplishment."
Freeport-McMoRan reported record full year earnings of USD 4.6 billion in 2011, thanks to higher production early in the year and record metals prices.
Mr Adkerson acknowledged that "The labor disruptions and security issues at Grasberg did affect our fourth quarter results. But even during the course of the strike...we had very solid operating performance, and our operating team has done a great job in those circumstances."
He noted that currently strikers are going back to work and are being integrated back into the workforce as we speak.”
Mr Adkerson said that "The strike at Cerro Verde was also a very long strike, but we were able to continue to operate there and it did not have a major impact on production.”
At 823 million pounds of copper, 133,000 ounces of gold, as well as 19 million pounds of molybdenum, fourth quarter 2011 copper and gold sales were higher than the revised December 2011 estimates of 800 million pounds of copper and 105,000 ounces of gold. However, they were well below the 941 million pounds of copper, 690,000 ounces of gold and 17 million pounds of moly reported during the fourth-quarter 2010.
Freeport lost production of 235 million pounds of copper and 275,000 ounces of gold last year because of a violent strike at Grasberg, which damaged pipelines.
FCX now projects 2012 sales of 3.8 billion pounds of copper, 1.2 million ounces of gold, and 80 million pounds of moly at a unit net cash cost of USD 1.38 per pound. Gold sales are expected to be lower than last year because of mine sequencing in Indonesia.
(Sourced from www.mineweb.com)
