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UPDATE 1-Freeport profit falls; miner still working on Indonesian dispute
April 24, 2014 / 1:06 PM / 4 years ago

UPDATE 1-Freeport profit falls; miner still working on Indonesian dispute

(Adds detail on Indonesia export tax, detail on Indonesia production, analyst expectations.)

April 24 (Reuters) - Freeport McMoRan Copper & Gold Inc reported a decline in first quarter profit on Thursday, hurt by lower copper prices and a conflict with the government of Indonesia that has halted its copper concentrate exports from the country.

But earnings came in ahead of analyst expectations and shares rose 2.2 percent to $34.25 in pre-market trading.

The company said it is working to resolve the dispute in Indonesia over a new export tax announced in January. Its huge Grasberg gold and copper complex is located in Papua province.

In the first quarter, Freeport’s Indonesian subsidiary produced 140 million pounds of copper, down from 219 million pounds a year earlier. It milled ore at about half its normal rate in the first quarter, roughly 118,000 tonnes of ore per day.

Freeport and Newmont Mining Corp, another U.S. company working in Indonesia, halted concentrate exports in January after the government announced the tax.

They have argued that the tax violates their contracts with the government, which exempt them from new taxes, duties or fees. The two miners pay a 35 percent corporate income tax plus royalties and other fees, but no export taxes.

Under a joint venture agreement, Rio Tinto gets a 40 percent share of the output from Grasberg above certain levels until 2021, and 40 percent of all production after 2021.

Freeport’s net income fell to $510 million, or 49 cents a share, from $648 million, or 68 cents, a year earlier. Revenue rose to $4.99 billion from $4.58 billion, boosted by the company’s recent oil and gas acquisitions.

Analysts had been expecting earnings of 43 cents a share, according to Thomson Reuters I/B/E/S. (Reporting by Allison Martell in Toronto; Editing by Chizu Nomiyama and Paul Simao)

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