Newmont Mining profit drops as Indonesia output plunges
(Reuters) - Newmont Mining Corp (NEM.N), the world's second-largest gold producer, reported a lower-than-expected quarterly profit after a steep fall in production and a sharp rise in costs at its big Batu Hijau copper and gold mine in Indonesia.
Newmont also said it expected total full-year attributable output to be at the low end of its previous forecast of 5.0-5.1 million ounces of gold and 145 to 165 million pounds of copper.
The company said costs related to copper sales more than doubled in the third quarter, and that it now expects such costs to be between $2.20 and $2.35 per pound in 2012, higher than its prior forecast of between $1.80 and $2.20.
Gold output at Batu Hijau, on Sumbawa island, plunged to 7,000 ounces on an attributable basis in the quarter from 65,000 a year earlier.
Copper production fell to 19 million pounds from 41 million.
Newmont said last month it planned to lay off 100 people from a workforce of 4,000 at its biggest copper mine to reduce operating costs at a time of low output. Worker pay has increased 25 percent in the past two years.
Indonesian workers have been demanding a bigger share of the profits from the mining boom in southeast Asia's biggest economy.
Newmont, which also has mines in Africa, Australia, Canada and the United States, said total copper production fell 38 percent in the quarter ended September 30 to 35 million pounds while attributable gold production dropped 5 percent to 1.24 million ounces.
Lower ore grades at its Tanami mine in Australia and the Ahafo mine in Ghana also weighed on production.
Net income attributable to Newmont stockholders fell 26 percent to $367 million, or 74 cents per share, from $493 million, or 98 cents per share, a year earlier.
Excluding one-time items, the company earned 86 cents per share. Analysts on average had expected a profit of 91 cents per share, according to Thomson Reuters I/B/E/S.
Revenue fell 10 percent to $2.48 billion.
Shares of the Denver-based company were down 2 percent after the bell on Thursday. They closed at $53.22 on the New York Stock Exchange.
(Reporting By Garima Goel in Bangalore; Editing by Maju Samuel and Ted Kerr)
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