Thursday, January 21, 2010

Freeport copper sales to fall on lower grades

Freeport-McMoRan Copper & Gold Inc, the world’s largest publicly traded copper producer, said its sales of the metal will decline 7.3% in 2010 as it processes lower ore grades and production costs rise. It anticipates lower concentrations at the Grasberg mine in Indonesia and the El Abra mine in Chile may reduce its copper sales to 3.8 billion pounds this year from 4.1 billion in 2009.

“We were mining in the highest-grade section that we have available to us in the Grasberg mine,” CEO Richard Adkerson told analysts in a conference call reported by Bloomberg. Comparatively lower grades at Grasberg this year “will have an impact.”

Higher prices for fuel, steel and wages, particularly in South America, may boost Freeport’s average copper production cost to 86 cents a pound this year from 55 cents in 2009, Adkerson said.

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