Freeport-McMoRan Copper & Gold Inc.
) has reportedly reached a tentative deal with the workers of the
Grasberg mine in Papua, Indonesia, over wages for the period
2013-2015. The terms of the deal will be included in a Collective
Labor Agreement (CLA).
Freeport and the union have agreed on some terms to be included
in the CLA including base pay hike for the workers and
enhancements in the pension plan The negotiating team is in talks
to settle the remaining details before the end of this month. The
new deal will be retroactive to Oct 1.
Freeport temporarily suspended operations at the mine in May
after an accident occurred at Grasberg due to the collapse of a
tunnel at the mine that took 28 lives. While the accident
occurred outside the area of mining operations, the company
temporarily suspended mining and processing activities at the
Grasberg complex as a part of the rescue and recovery operation.
The closure of mining operations affected production as the
Indonesian operation lost about 125 million pounds of copper and
125 thousand ounces of gold in the second quarter of 2013.
Freeport, which is among the prominent players in the mining
industry along with
Newmont Mining Corp.
Barrick Gold Corp.
), released its second-quarter 2013 results in July. The company
reported earnings of 49 cents per share, a roughly 34% decline
from the year ago earnings of 74 cents. But it beat the Zacks
Consensus Estimate of 41 cents. Profits slid 32% year over year
to $482 million, hurt by lower prices.
Revenues fell roughly 4.2% year over year to $4.29 billion in
the second quarter, missing the Zacks Consensus Estimate of $4.45
billion. Copper sales from Indonesian mining operations fell
around 14% year over year to 158 million pounds while production
declined roughly 20% to 139 million pounds in the quarter, a
follow-on from the accident at Grasberg.
Freeport currently retains a short-term Zacks Rank #3
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