Freeport McMoRan Inc (NYSE: FCX) reported lower consolidated sales volume in the first quarter of this year at its Indonesian mining unit PT Freeport Indonesia (PT-FI) due among others to temporary disruption of operations in February amid landslides.
Freeport said in a statement Friday that PT-FI's consolidated sales of 198 million pounds of copper and 266 thousand ounces of gold in first-quarter 2023 were lower than first-quarter 2022 consolidated sales of 379 million pounds of copper and 406 thousand ounces of gold, primarily as a result of the timing of sales associated with the transition to a tolling arrangement with PT Smelting in 2023 and the impact of a temporary disruption of operations in February 2023 associated with the significant weather event.
Consolidated sales volumes from PT-FI are expected to approximate 1.5 billion pounds of copper and 1.8 million ounces of gold for the year 2023, net of a deferral of approximately 110 million pounds of copper and 140 thousand ounces of gold from mine production under tolling arrangements to be processed and sold as refined metal in future periods, the company said.
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On February 11, 2023, PT-FI’s operations were temporarily disrupted because of significant rainfall and landslides, which restricted access to infrastructure near its milling operations. After recovery activities and the clearing of debris, PT-FI resumed operations by the end of February 2023 and achieved a full recovery in March 2023.
The company said PT-FI's milling rates for ore extracted from its underground mines averaged 164,800 metric tons of ore per day in first-quarter 2023. PT-FI expects milling rates to average in excess of 200,000 metric tons of ore per day for the remainder of 2023.
Elsewhere, Freeport said PT-FI's unit net cash credits (including gold and silver credits) of US$0.08 per pound of copper in first-quarter 2023 were in line with unit net cash credits of $0.06 per pound in first-quarter 2022, reflecting higher gold and silver credits, mostly offset by lower sales volumes and higher treatment charges.
Assuming an average gold price $2,000 per ounce for the remainder of 2023 and achievement of current sales volumes and cost estimates, unit net cash credits (including gold and silver credits) for PT-FI are expected to approximate $0.15 per pound of copper for the year 2023. PT-FI's average unit net cash credits for the year 2023 would change by approximately $0.11 per pound of copper for each $100 per ounce change in the average price of gold for the remainder of 2023.
Following is summary consolidated operating data for Indonesia mining
|
|
Three Months Ended March 31, |
|
|
|
2023 |
2022 |
|
Copper (millions of recoverable pounds) |
|
|
|
Production |
329 |
381 |
|
Sales |
198 |
397 |
|
Average realized price per ounce |
$4.07 |
$4.69 |
|
Gold (thousands of recoverable ounces) |
|
|
|
Production |
402 |
412 |
|
Sales |
266 |
406 |
|
Average realized price per ounce |
$1,949 |
$1,920 |
|
Unit net cash costs per pound of coppera |
|
|
|
Site production and delivery, excluding adjustments |
$2.01 |
$1.41 |
|
Gold and silver credits |
(2.84) |
(2.17) |
|
Treatment charges |
0.37 |
0.25 |
|
Export duties |
0.09 |
0.21 |
|
Royalty on metals |
0.29 |
0.24 |
|
Unit net cash costs |
$0.08 |
$0.06 |
|
a. For a reconciliation of unit net cash credits per pound to production and delivery costs applicable to sales reported in FCX's consolidated financial statements. |
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Editing by Reiner Simanjuntak
