Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX) on Thursday cut its estimate for production from its Grasberg mine, the largest gold mine in the world, in the wake of a now-settled strike.
Freeport said it expects production to fully ramp up by the second quarter. The Phoenix, Ariz.-based company estimated the work stoppage cost it production and sales of 80 million pounds of copper and 125,000 ounces of gold. That's about a 30 percent drop in gold and a 10 percent drop in copper.
Freeport said Thursday that the operations at the Grasberg mine had resumed after about a three-week long work stoppage that began on Feb. 23. As a result of the work stoppage, Freeport said it would revise consolidated first-quarter sales to 795 million pounds of copper and 300,000 ounces of gold to reflect the production interruption.
The company said in January that its fourth-quarter earnings had dropped 59 percent year-over-year, due to other work interruptions in Indonesia dropped revenue by 26 percent. Freeport had been experiencing strong growth off the strength of copper and gold prices, but the work stoppages have taken a toll.
Freeport's original estimates for the first-quarter called for 875 million pounds of copper production and sales and 425,000 ounces of gold. That featured 210 million pounds of copper and 400,000 ounces of gold from its Grasberg unit.
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When the company announced its fourth-quarter earnings loss, Kathleen Quirk, Freeport's chief financial officer, said the company's copper and gold production had declined by about 165 million pounds and 170,000 ounces in the fourth quarter, respectively. She added that Freeport expected to lose 235 million pounds of copper and 275,000 ounces of gold for all of 2011.
Shares of Freeport were up 0.42 percent to $38.28 in afternoon trading.