Freeport to Lower Copper Production Estimate: CEO
The prolonged strike at Freeport-McMoran's Papua, New Guinea, mine will force the company to lower its production estimate, CEO Richard Adkerson told CNBC Wednesday.
"Since Oct. 22 we have been unable to produce any product, any concentrate for sale out of that operation and that is costing us about two million pounds of copper a day and about three million ounces of gold a day," Adkerson said.
The company had forecast production rates at 75 percent of normal when it released its third-quarter earnings in mid-October. At that time the company reported copper sales down almost 14 percent to 947 million pounds.
The Freeport copper mine on the Indonesian island is the world's second biggest. Unionized miners went on strike for higher wages in mid-September and said Tuesday they could extend the strike until mid-December. The union rejected a proposed 35 percent wage increase last week.
"We’re going to have to adjust that [production estimate] downward as a result of being shut down completely since Oct. 22," Adkerson told CNBC. "We’re taking steps to restore what is a slurry pipeline connection between our mill and our port facility so we can resume production. Until we do that we won’t be able to produce and we’ll have to make a downward adjustment to those volumes."
The "ore is still there and we'll be mining it eventually," he added. "It's not anything that's lost, it's just a matter of the timing when we can get back to operations." However, he admitted, "it's uncertain" when that will be.
Reuters contributed to this report.