(Reuters) -A slump in copper production and shipping delays in Indonesia dragged Freeport-McMoRan Inc’s second-quarter profit down by 60%, although results narrowly beat Wall Street’s expectations.
Shares rose 2.3% in early Thursday trading alongside a rise in copper prices.
The results lay bare the mining industry’s problem getting access to skilled labor to produce the building blocks for the green energy transition, as well as the rising focus on resource nationalism by host governments across the globe.
Freeport plans to hold a conference call with investors to discuss the results later on Thursday.
The Phoenix-based company reported net income of $343 million, or 23 cents per share, for the three months ended June 30, compared with $840 million, or 57 cents per share, a year earlier.
The company’s adjusted earnings of 35 cents per share narrowly beat analysts’ estimate of 34 cents, according to Refinitiv data.
Freeport operates the low-cost, high-grade Grasberg mine in Indonesia and its export permit expired on June 10, when the Southeast Asian country began its raw mineral export ban. The company has not made any shipments since the expiry.
A routine 75-day maintenance shutdown at domestic buyer, PT Smelting, that started in May 1, piled more pressure.
The largest copper producer in the world said quarterly sales of the metal fell 5.3% to 1.03 billion pounds while production fell 1% to 1.07 billion pounds.
Further denting profit was a nearly 5% fall in average realized prices for copper and a 4.3% rise in cash costs.
For the current quarter, Freeport expects sales of 1 billion pounds of copper, if exports from Indonesia resume from late July.
The company cited lower sales volume and increased costs of maintenance, supplies and labor in North America for the jump in expenses.
CEO Richard Adkerson had said in April that higher labor costs would persist through the year.
Meanwhile, the company also trimmed its 2023 capital expenditure outlook to $4.8 billion from $5.1 billion.
(Reporting by Arshreet Singh in Bengaluru and Ernest Scheyder in Houston; Editing by Arun Koyyur, Sriraj Kalluvila and Nick Zieminski)
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