Freeport records production, earnings increase

US copper and gold giant Freeport-McMoRan Copper& Gold Inc. (FCX) announced on Thursday its second quarter earnings increased tenfold to US$ 57.4 million from $5.6 million in the same period last year due to gold and copper production increase and gold price increase.

FCX, through its subsidiary PT. Freeport Indonesia (PT-FI), runs the world?s biggest copper and gold mining in the easternmost province of Papua.

FCX said PT-FI reported higher copper production and sales in the 2003 quarter (see table), reflecting the continued mining of higher-grade ore which began late in the second quarter of 2002. Second-quarter 2003 copper ore grades averaged 1.24 percent, compared with 1.14 percent in the second quarter of 2002. Copper recovery rates also improved to 89.8 percent for the second quarter of 2003, compared with 87.1 percent for the second quarter of 2002.

Gold production and sales for the second quarter of 2003 also reflect significantly higher ore grades and higher mill recovery rates over the year-ago period. In the second quarter of 2003, ore milled averaged 1.95 grams of gold per metric ton (g/t), compared with 0.98 g/t in the second quarter of 2002. Gold recovery rates improved to 87.9 percent for the second quarter of 2003, compared with 86.3 percent for the second quarter of 2002.

Second-quarter 2003 copper and gold sales exceeded previous quarterly estimates primarily because of the timing of mining ore previously forecast to be mined in the second half of 2003. PT-FI expects its sales for 2003 to approximate 1.4 billion pounds of copper and 2.6 million ounces of gold, with sales for the third quarter of 2003 estimated to approximate 320 million pounds of copper and 640,000 ounces of gold.

PT-FI reached its targeted production rate at the Deep Ore Zone (DOZ) underground mine of 35,000 metric tons of ore per day during the first quarter of 2003. During the second quarter of 2003 new underground mining records were established, with combined average production totaling approximately 50,200 metric tons of ore per day from the Intermediate Ore Zone and DOZ mines, representing 23 percent of second-quarter 2003 mill throughput. DOZ production averaged 40,800 metric tons of ore per day during the second quarter of 2003, and studies are ongoing to evaluate additional low-cost expansion options for the DOZ underground operation. (alex/robert)