Freeport McMoRan Copper & Gold Inc will produce 80 million pounds less copper and 125,000 ounces less gold due to labour strife at the company's Grasberg mine in Indonesia.
The American company (NYSE:FCX) revised its first-quarter forecast at the same time it announced it has restarted operations at Grasberg, the world's largest copper and gold mine, following a temporary work stoppage on Feb. 23 and a three-month strike last year.
But the mine will not return to full production until the second quarter and the company did not say when it would lift a force majeure condition it implemented as a result of the strike.
The strike has also bit into sales. FCX said it plans to sell 795 million pounds of copper and 300,000 ounces of gold in Q1, down from original estimates of 875 million pounds copper and 425,000 ounces of gold, including 210 million pounds of copper and 400,000 ounces of gold, according to numbers sourced from Reuters.
Considering the volume of commodities coming out of Grasberg, the news was enough to move the May COMEX copper contract, which rose 2.7 cents to $3.87 a pound on Thursday.
FCX was up 24 cents in mid-day trading to $38.34 in New York.
The strike at Grasberg last fall turned violent when Indonesian security forces fired on striking workers during a protest, killing one and injuring a dozen others, including seven police. Production was halted after a pipeline was sabotaged, access to the pit and underground operations were blocked and three miners were killed in an ambush.
Some 12,000 workers began a strike on 15 September and vowed to shut down the mine if hourly wages of $1.50 were not upped 8-fold.