Vancouver The operator of the World’s largest gold mine had a rough start to October with a slippage accident resulting in two worker deaths, while six other missing workers are presumed dead, and third quarter results that showed lower profits as one-time charges offset stronger-than-expected production.
New Orleans-based Freeport-McMoRan Copper & Gold (FCX-N) earned US$55.9 million, or US$0.33 a share in the latest quarter, compared with US$61.5 million, or US$0.39 cents a share, a year ago. Driving the short fall was US$37.6 million, or US$0.19 cents a share in one time charges.
Revenue came in at US$668.8 million, up from US$538.7 million tallied in last year’s quarter. Sales rang in at 345 million lbs. of copper, exceeded projections by about 25 million lbs., and 763,500 oz of gold, exceeded estimates by 120,000 oz. Third quarter unit cash production costs at the Indonesian mine, net of gold and silver credits, hit an enviable net credit of US$0.16 per lb.
On Oct. 9, the company reported that two workers were killed, five were injured and six workers were missing following a landslide in a small section of its massive Grasberg open pit mine in Indonesia.
The accident is reportedly different from the one that occurred in 2000, when Indonesia had pressed Freeport to cut production following an accident at the company’s Lake Wanagon waste dump that killed four workers and raised concerns about possible environmental damage.
The latest accident is not expected to hurt long-term mine plans and production rates, but as a result of the incident, the company has revised its fourth quarter sales estimates to 200 million lbs. of copper and 250,000 oz. of gold. Some 5% of the operation will be closed for at least two weeks, but operations will continue at its Deep Ore zone underground mine, milling facilities and concentrate delivery systems at the site.
The Grasberg deposit, discovered by Freeport in 1988, has the world’s largest gold reserves and third-largest copper reserves. For the full year, the mine is expected to tally 1.33 billion lbs., 70 million pounds lower than previously estimated, while gold volumes are seen reaching 2.45 million oz., 150,000 oz. below forecasts.
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