Vancouver – Amidst the bombing of Afghanistan and calls for a “holy war”, it must be a little unsettling for a US-based mining company to have its main operation is the world’s largest Muslim country. However, Freeport-McMoRan Copper & Gold (FCX-N) states that its mighty Grasberg copper-gold mine in Indonesia is operating “exceptionally well” despite world political tensions and low copper prices.
“Today’s world political situation has not affected our operations,” says the company’s CEO James Moffett. “The Grasberg milling complex set new records for ore throughput and gold recoveries, averaging over 244,000 metric tons per day for the quarter with gold recoveries of almost 90%.”
Located in Indonesia’s easternmost province of Irian Jaya, Grasberg continues to rank as the lowest-cost copper producer in the world. The company expects sales to reach about 1.4 billion lb. of copper at a net-cash production cost of less than US$0.10 per lb., with gold sales hitting 2.5 million oz.
Freeport raised its third quarter production and sales targets but lowered its profit estimate by US$4.7 million, or US$0.03 per share to US$0.03 per share. Sales for the quarter are now slated to hit 350 million lb. of copper and 685,000 oz. of gold. Operating cash flow is expected to reach an impressive US$184 million in the latest quarter, allowing the company to repay some US$83 million of debt. In the first nine months of the year, Freeport has reduced debt by US$260 million.
“We look forward to continuing our strong operating performance which has enabled us to achieve industry-leading cost performance and to generate significant positive cash flows despite near record low copper prices,” says Moffett.
Third quarter earnings are set to be released October 16.
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