Summary
Freeport-McMoRan Copper & Gold Inc. (FCX) announced on January 2, 2001, the resumption of normal mining operations at its Grasberg open pit mine in Irian Jaya, Indonesia. This follows a voluntary limitation on ore extraction for the past eight months, during which a comprehensive study was conducted on an overburden stockpile slippage incident in May 2000. The Indonesian government has approved the restart after reviewing the study, which involved external consultants and local community input, and has affirmed the long-term mining and overburden management plan. Investors should note the positive implications for fourth-quarter 2000 production and sales, which are expected to exceed previous estimates, setting a new quarterly record for PT Freeport Indonesia (PT-FI) copper sales. The company anticipates strong production and sales figures for both the fourth quarter and the full year 2000, with significant increases projected for gold sales in 2001. The report also reiterates FCX's position as a low-cost copper producer.
Key Highlights
- 1Normal mining operations have resumed at the Grasberg open pit mine in Indonesia.
- 2The resumption follows a comprehensive study of an overburden stockpile slippage incident and has been approved by the Indonesian government.
- 3Fourth-quarter 2000 copper production is expected to exceed 500 million pounds and gold production to exceed 875 thousand ounces.
- 4Fourth-quarter PT-FI copper sales are anticipated to set a new record, exceeding 430 million pounds.
- 5Aggregate 2000 production is projected at approximately 1.6 billion pounds of copper and 2.3 million ounces of gold.
- 6For 2001, copper production is estimated at approximately 1.6 billion pounds, with gold production projected to exceed 3.0 million ounces.
- 7FCX anticipates maintaining its position as the lowest-cost copper producer globally, with very low net cash production costs.