NEM Indonesia Unscathed By Strike - Analyst Blog


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Newmont Mining Corp 's ( NEM ) output at its Batu Hijau copper and gold mine in Indonesia was unaffected after about 400 workers went on strike in a dispute over shifts.

Management and union representatives are in talks to resolve the dispute. The mine has more than 7,000 employees and contractors.

Batu Hijau, the nation's second-biggest copper mine, aims to produce around 275 million pounds of copper and 275,000 ounces of gold in 2011.

The Newmont strike comes at a time of heightened tensions within the Indonesian mining industry, as workers push for a greater share of profits.

Striking workers at Freeport-McMoRan Copper & Gold Inc. ( FCX ), which is Indonesia's giant Grasberg copper and gold mine, are currently involved in the country's longest-running mining dispute.

Miners at Grasberg, the world's second biggest copper mine, have been on strike since mid-September, driving Freeport McMoRan Copper & Gold Inc. to declare a force majeure on concentrate shipments last month.

Recently, Newmont reported adjusted net income of $635 million or $1.29 per share in the third quarter of 2011, up from last year's $533 million or $1.08 per share. The result exceeded the Zacks Consensus Estimate of $1.24 per share.

Total revenue was $2.7 billion, up 6% year over year.

Newmont reported attributable gold and copper production of 1.3 million ounces and 58 million pounds, respectively, in the quarter at costs applicable to sales ( CAS ) of $622 per ounce, and $1.10 per pound on a co-product basis.

The company faces stiff competition from Posco ( PKX ) and Arcelor Mittal ( MT ).

Newmont has a short-term (1 to 3 months) Zacks #3 Rank (Hold) and a long-term Neutral recommendation.

FREEPT MC COP-B ( FCX ): Free Stock Analysis Report
ARCELOR MITTAL ( MT ): Free Stock Analysis Report
NEWMONT MINING ( NEM ): Free Stock Analysis Report
POSCO-ADR ( PKX ): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
More Headlines for: CAS , FCX , MT , NEM , PKX

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