Freeport in Trouble With Union - Analyst Blog
26 August 2011 - 10:15AM
Zacks
Freeport-McMoRan Copper
& Gold Inc.'s (FCX) 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) and Southern Copper
Corp. (SCCO). It currently retains Zacks #3 Rank on its
stock, which translates to short-term “Hold” rating.
FREEPT MC COP-B (FCX): Free Stock Analysis Report
NEWMONT MINING (NEM): Free Stock Analysis Report
SOUTHERN COPPER (SCCO): Free Stock Analysis Report
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