Higher production and sales resulted in a second-quarter profit for
The company earned US$19 million (or 12 cents per share) during the 3-month period ended June 30, compared with US$25.8 million (14 cents per share) in the corresponding period last year, when metal prices were higher.
In the recent quarter, copper and gold sales climbed 11% and 24%, respectively, for subsidiary P.T. Freeport Indonesia (PT-FI), net of
Rio Tinto receives a 40% interest on daily production in excess of 118,000 tonnes at Grasberg, which is currently producing more than 216,000 tonnes per day. This resulted in production of 412,400 lbs. copper, 739,300 oz.
gold and 949,700 oz. silver during the second quarter.
Freeport sold 355.6 million lbs. copper and 593,900 oz. from PT-FI’s 81% share of production, pushing revenues up 8% to US$470 million, despite an 8% drop in copper prices and an 11% drop in gold prices during the quarter.
The company maintained its position as the lowest-cost operator in the world. Cash production costs, including gold and silver credits, were US11 cents per lb. copper during the second quarter, compared with US15 cents per lb. a year ago.
During the quarter, Freeport completed its first sale of copper cathode at the Gresik smelter-refinery, also in Indonesia. PT-FI, supplying all the concentrates for processing, holds a 25% stake in the complex, with the majority held by Mitsubishi of Japan.
Freeport spent US$2.2 million exploring its various properties across Irian Jaya, while reducing general and administrative costs by 9% in an attempt to offset the effect of low metals prices.
Cash flow enabled the company to slash its debt by US$51.5 million during the quarter, and further reductions are expected provided metal prices stay above US70 cents per lb. copper and US$260 per oz. gold.
In all, Freeport expects to produce 1.4 billion lbs. copper and 2.2 million oz. gold during 1999, net of Rio Tinto’s interest.
For the first six months of 1999, the company posted earnings of US$36.7 million (22 cents per share), compared with earnings of US$52.4 million (29 cents per share) in the first half of last year.
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