Freeport-McMoRan Copper & Gold's (FCX - Free Report) labor union stated that it may extend its current strike at the Grasberg copper mine beyond one month, since current talks with management were deadlocked.
As per the Union, it directly wants to discuss the matter with the company instead of continuing with the tripartite mediation involving the government.
The miners' union, which declared a month long strike from September 15, 2011, had offered to lower its demands from $17.5 per hour to $12.5-$10 per hour. Freeport Indonesia mine workers' current rate is $1.50 to $3 per hour. It is seen that Freeport workers in other parts of the world get 10 times their current level.
As per the union, Freeport's total work force in Indonesia was 23,000, and that more than 12 000 of these were union members and still striking.
According to the company, the weeklong Grasberg strike has limited mining, milling and concentrate shipping activities, but about half of the labor force, primarily contractors and non-union staff employees, have reported to work.
In July 2011, Freeport released its second-quarter 2011 results. The company 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 2010. 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.
Freeport-McMoRan’s consolidated unit net cash costs (net of by-product credits) are estimated to average $1.01 per pound of copper for 2011 based on average prices of $1,500 per ounce for gold and $15 per pound for molybdenum for the second half of 2011.
Based on the same parameters and assuming an average price of $4.25 per pound of copper, the company’s consolidated operating cash flows are estimated to exceed $8 billion for the year 2011.
The company’s capital expenditures are expected to reach $2.6 billion for 2011, including $1.4 billion for major projects and $1.2 billion for sustaining capital. Major projects for 2011 primarily include underground development activities at Grasberg, construction activities at the Climax molybdenum mine and completion of the initial phase of the sulfide ore project at El Abra.
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) . The company currently retains a Zacks #3 Rank, which translates to a short-term Hold rating.