said second-quarter copper sales will be less than previously expected due to high clay content in an area of an Indonesian mine.
The company expects copper sales to be 235 million pounds in the quarter at its Indonesia venture, PT-FI, down from its old forecast of 280 million pounds. The forecast for gold sales remained the same at 275,000 ounces.
"The shortfall for copper reflects operational effects associated with mining a relatively small section of ore in the '6 North' pushback with abnormally high clay content, which has adversely affected ore flow, mill recoveries and concentrate grades," Freeport-McMoRan said.
The company said its Indonesia unit is taking steps to offset the impact of the clay by blending the affected ore with ore from other sections of the mine. "Initiatives are under way to develop mine plans that would enable
the unit to offset this shortfall in the balance of the year."
Freeport-McMoRan hopes to complete a revision to its extraction strategy for the affected mine, the Grasberg pit, in the third quarter, and anticipates the result to be a deferral of high-grade ore previously expected to be mined in 2007 and 2008.
"While the annual impacts to metal sales may be significant, preliminary estimates of total metal sales volumes for PT-FI are expected to be within 5% of the previously reported projected amounts for the five-year period from 2006-2010 and may affect the timing of development of the Grasberg block cave ore body."
The stock closed at $56.74 Friday. In premarket trading, it lost 21 cents, or 0.4%, to $56.53.