Despite lower copper and gold production from the Grasberg operation in Indonesia, higher metal prices let Freeport McMoRan Copper and Gold (FCX-N) make net income of US$367 million on revenues of US$1.4 billion in the second quarter of 2006.
The profit, equal to US$1.74 per share, dwarfed the US$175 million the company made in the second quarter of 2005, even though production was down substantially year-on-year. Freeport’s average realized price per pound of copper produced more than doubled, to US$3.33 from US$1.53, and its average realized price for gold increased to US$614 from US$428.
Copper production, though, fell to 237.1 million lb. in the quarter from 302.3 million in the corresponding period of 2005, while gold production fell to 307,300 oz. from 591,300 oz. the year before. Both millhead grades and recoveries were lower than last year.
Production costs increased to US98 per lb. copper from US11 in the second quarter of 2005.
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