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Freeport-McMoRan Inc, the world’s largest publicly traded copper producer, posted a quarterly loss on Wednesday as costs spiked and production of gold and copper plunged at a key Indonesian mine.
Still, the loss, the company’s first since 2016, wasn’t as steep as analysts had expected. It comes amid a production drop and as Freeport is spending billions of dollars to expand Indonesia’s Grasberg copper and gold mine underground, a two-year process that is vital to the company’s future.
Freeport reported a second-quarter net loss of $72 million, or 5 cents per share, after earning a net profit of $869 million, or 59 cents per share, a year earlier.
Excluding one-time items related to a water tax dispute in Indonesia, Freeport lost 4 cents per share.
By that measure, analysts expected a loss of 5 cents per share, according to IBES data from Refinitiv.
Shares of the Phoenix-based company fell 0.6% to $11.60 in morning trading.
Production of copper sank 24% to 776 million pounds and gold output fell 79% to 160 million pounds. The price Freeport receives for its copper fell 10% during the quarter even as its costs doubled.
Freeport had warned of the quarterly loss at the beginning of the month.
Richard Adkerson, Freeport’s chief executive, said in a statement the Grasberg expansion is “advancing according to plan,” adding that “recent milestones are encouraging.”
Adkerson told Reuters earlier this year that Freeport plans no dividend hikes, acquisitions or debt buybacks over the next two years as it focuses on the Grasberg project.
Analysts said they were looking for more details on what is going on at Grasberg.
“The investment case for Freeport really depends on development of the underground project at Grasberg,” said Jefferies mining analyst Christopher LaFemina, who has a “buy” rating on the company and a $15.50 price target.
The company plans to hold a conference call with investors to discuss the results on Wednesday morning.
(By Ernest Scheyder; Editing by Steve Orlofsky and Bernadette Baum)
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