Back to top

Analyst Blog

Freeport-McMoRan Copper & Gold Inc.'s (FCX - Analyst Report) Indonesian workers intend to go on another strike at its huge Grasberg mine in the coming days after it failed to reach an agreement with the company's management.

Earlier, Freeport and its Grasberg copper-gold mine in Indonesia agreed to extend talks on labor contract terms with its workers till August 26, but it reached a deadlock.

Freeport and Grasberg mine’s labor union has been in talks since July 20 after approximately 8,000 workers went on strike, causing a production loss of 60,000 ounces of gold and 35 million pounds of copper.

The employees want their pay to increase between $35 and $200 an hour, from $1.50 to $3.50 an hour. Further, they have threatened to and may go on strike again if the company doesn’t meet their demands.

The Grasberg mine is the world's largest copper and gold mine and is the largest source of value for Freeport.

The company is working diligently with the union and employee leadership to resolve this issue of strike, and has requested employees to return to work while this is being resolved.

In July 2011, Freeport reported a profit of $1.37 billion or $1.43 per share in the second quarter of 2011, which more than doubled from $649 million or 70 cents per share in the same quarter of 2011. The profit exceeded the Zacks Consensus Estimate by 9 cents per share.

Revenues in the quarter surged 50% to $5.81 billion, surpassing the Zacks Consensus Estimate of $5.63 billion. Consolidated sales from mines totaled 1.0 billion pounds of copper, 356,000 ounces of gold and 21 million pounds of molybdenum compared with 914 million pounds of copper, 298,000 ounces of gold and 16 million pounds of molybdenum in the second quarter of 2010.

Headquartered in Phoenix, Arizona, Freeport-McMoRan Copper & Gold Inc. is engaged in mineral exploration and development; mining and milling of copper, gold, molybdenum and silver; as well as the smelting and refining of copper concentrates.

The company conducts its operations primarily through its principal operating subsidiaries, PT Freeport Indonesia, Freeport-McMoRan Corporation (formerly Phelps Dodge) and Atlantic Copper. Its major competitors include Newmont Mining Corp. (NEM - Analyst Report) and Southern Copper Corp. (SCCO - Snapshot Report). It currently retains Zacks #3 Rank on its stock, which translates to short-term “Hold” rating.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
UTD THERAPE… UTHR 117.83 +28.51%
TRIQUINT SE… TQNT 20.67 +6.52%
VASCO DATA… VDSI 14.77 +4.68%
BANCO DO BR… BDORY 15.53 +3.95%
STRATTEC SE… STRT 80.24 +3.00%