NEM Indonesia Unscathed By Strike - Analyst Blog
17 November 2011 - 7:50PM
Zacks
Newmont Mining
Corp's (NEM) output at its Batu Hijau copper and gold mine
in Indonesia was unaffected after about 400 workers went on strike
in a dispute over shifts.
Management and union
representatives are in talks to resolve the dispute. The mine has
more than 7,000 employees and contractors.
Batu Hijau, the nation's
second-biggest copper mine, aims to produce around 275 million
pounds of copper and 275,000 ounces of gold in 2011.
The Newmont strike comes at a time
of heightened tensions within the Indonesian mining industry, as
workers push for a greater share of profits.
Striking workers at
Freeport-McMoRan Copper & Gold Inc. (FCX),
which is Indonesia's giant Grasberg copper and gold mine, are
currently involved in the country's longest-running mining
dispute.
Miners at Grasberg, the world's
second biggest copper mine, have been on strike since
mid-September, driving Freeport McMoRan Copper & Gold Inc. to
declare a force majeure on concentrate shipments last month.
Recently, Newmont reported adjusted
net income of $635 million or $1.29 per share in the third quarter
of 2011, up from last year’s $533 million or $1.08 per share. The
result exceeded the Zacks Consensus Estimate of $1.24 per
share.
Total revenue was $2.7 billion, up
6% year over year.
Newmont reported attributable gold
and copper production of 1.3 million ounces and 58 million pounds,
respectively, in the quarter at costs applicable to sales (CAS) of
$622 per ounce, and $1.10 per pound on a co-product basis.
The company faces stiff competition
from Posco (PKX) and Arcelor
Mittal (MT).
Newmont has a short-term (1 to 3
months) Zacks #3 Rank (Hold) and a long-term Neutral
recommendation.
FREEPT MC COP-B (FCX): Free Stock Analysis Report
ARCELOR MITTAL (MT): Free Stock Analysis Report
NEWMONT MINING (NEM): Free Stock Analysis Report
POSCO-ADR (PKX): Free Stock Analysis Report
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