Freeport books profit as production soars

Giant American miner Freeport-McMoRan Copper & Gold Inc. recorded a profit in the second quarter of the year, reversing a year-earlier loss, thanks to increased output at its copper and gold mine in Papua, Indonesia and rising prices for its products.

The firm said in a statement on Tuesday that its second quarter net income was $190.4 million, compared to a net less of $38.2 million a year earlier.

Its Indonesian subsidiary, PT Freeport Indonesia (FI), produced 302.3 million pounds of copper in the second quarter of the year, compared to 209.3 million pounds a year earlier, while sales of the product reached 313.5 million pounds, compared to 205.1 million pounds a year earlier.

FI?s gold output reached 591,300 ounces in the second quarter of the year, compared to 364,900 a year earlier. The firm sold 616,400 ounces of gold in the period, compared to 351,100 ounces a year earlier, according to the statement.

Freeport sold copper on average at $1.53 a pound, up from $1.22, and its average gold prices rose to $428.23 an ounce from $387.97, the company said.

"Copper inventories are very low, China continues to consume copper at higher rates and the U.S. economy is doing reasonably well," Adkerson said in an interview with Bloomberg. "Underlying fundamentals are very strong."

"Copper consumption remains higher than expected," Adkerson said. "There are reports that the physical market for gold is good."

Freeport lowered its estimate of its share of production from Grasberg this year to 1.47 billion pounds of copper and 2.8 million ounces of gold. The previous estimate was 1.5 billion pounds of copper and 2.9 million ounces of gold.

Grasberg is expected to produce about 3.5 million ounces of gold this year and 800,000 metric tons of copper, the second- highest after BHP Billiton Ltd.'s Escondida mine in Chile, Freeport executives said in a May 16 presentation to analysts.

Freeport owns almost 91 percent of Grasberg, and the government of Indonesia owns the rest. Freeport bought out the rest of PT Indocopper Investama in 2002 after the owner, Mohamad "Bob" Hasan, was unable to pay loans. PT Aneka Tambang, a gold and nickel miner 65 percent owned by Indonesia's government, is considering buying the government's 9.36 percent interest in the mine, Adkerson said.

?Any sale would be done at a "fair market value," he said. (Bodega)