Freeport-McMoRan Copper & Gold Inc.'s (FCX - Free Report) Grasberg copper-gold mine in Indonesia has agreed to extend talks on labor contract terms with its workers till August 26, after they failed to reach an agreement on 2011-2013 contract terms including salary.
Freeportand Grasberg mine’s labor union has been in talks since July 20 after approximately 8,000 workers went on strike, significantly impacting mining operations and production.
The employees want their pay to increase between $35 and $200 an hour, from $1.50 to $3.50 an hour, 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 - Free Report) and Southern Copper Corp. (SCCO - Free Report) . It currently retains Zacks #3 Rank on its stock, which translates to short-term “Hold” rating.