Lower sales sink Freeport in third quarter

Denver — Lower sales volumes resulted in a third quarter loss for Freeport-McMoRan Copper & Gold (FCX-N). The major incurred a net loss of US$9.2 million (or 6 per share) in the 3-month period ended Sept. 30, compared with a profit of US$26.8 million (16 per share) in the corresponding period of 1999.

Subsidiary company P.T. Freeport-Indonesia (PT-FI) sold 388.3 million lbs. copper and 422,700 oz. gold, all of which was produced at the giant Grasberg complex in the province of Papua (formerly Irian Jaya). The mine cranked out 415.4 million lbs. copper, 470,900 oz. gold and 930,600 oz. silver. Mill throughput remained high, at 221,500 tonnes per day.

PT-FI’s average cash production costs, including gold and silver credits, were US33 per lb., compared with only US8 in the year-ago quarter. Lower gold credits were blamed for the increase. On the bright side, costs are expected to fall to US11 per lb. in the fourth quarter.

Freeport generated US$304.9 million in operating cash flow and made capital expenditures totalling US$132 million. It has also made US$158.7 million in stock repurchases, as part of its open market stock repurchase program.