Metals output was completely stopped at Freeport-McMoRan Copper & Gold Inc.’s (FCX) Grasberg mine in Indonesia after a pipe transporting copper concentrate was cut. This has led to a significant loss in production.
This raises security concerns over the Grasberg strike, which has taken an ugly turn. Freeport is facing a prolonged strike at its Grasberg mine and reportedly three men were killed last week though it was not clear if the shooting was linked to that dispute or to a simmering independence movement in the remote region.
Prior to that, a clash between striking workers and police near the mine killed one protester and injured others, complicating the dispute over pay and working conditions.
A few days back, Freeport had announced that it has raised its copper concentrate production to more than 4,000 tonnes per day in October at the Gasberg mine, despite the strike.
The total concentrate output is now expected to be 79,000 tonnes by the end of this week, which was only 54 tonnes on September 18, just days after the start of the strike by approximately half of its workforce.
Earlier, last month Freeport-McMoRan announced it was unlikely to meet its third-quarter 2011 sales estimates due to the strike. It then estimated the impact on production at about 3 million pounds (1,361 tonnes) of copper and 5,000 ounces of gold for each day of the halt.
Striking miners, whose union is insisting on higher pay of between $12.50 and $37 an hour versus the current rate of $1.5 to $3 an hour, are not getting paid while striking. 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.
Freeport will announce its third-quarter 2011 financial results on 19 February 2012.
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) and Southern Copper Corp. (SCCO). The company currently retains a Zacks #3 Rank, which translates into a short-term Hold rating.
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