Freeport (FCX) Suspends Some Operations at El Abra Mine

Freeport-McMoRan Inc.’s FCX majority-controlled El Abra mine in Chile has halted some operations after a worker died due to an accident at its acid unloading terminal, according to Reuters. While at work at the acid unloading terminal, the worker suffered an accident that led to his death. The El Abra mine is 51% owned by Freeport, with state-run Codelco owning the remaining 49%.

It produced around 147,000 tons of copper in 2015. Freeport, last year, revised plans for its copper mines in South America mainly to reflect adjustments to the mine plan at El Abra to cut mining and stacking rates by roughly 50% in a bid to realize lower operating and labor costs, and extend the life of the existing operations. The company, in its second-quarter 2016 call, noted that it is evaluating a potential large-scale milling operation at El Abra to process additional sulfide material and to achieve higher recoveries.

Freeport’s adjusted loss for second-quarter 2016 was wider than the Zacks Consensus Estimate. Revenues fell by double-digits year over year and missed expectations. Freeport is taking actions to manage costs and capital spending amid a challenging operating environment.

Benefits of the company’s ongoing cost-cutting initiatives were evident in the second quarter, manifested by a year-over-year decline in consolidated average unit net cash costs of copper. The company also remains focused on deleveraging its balance sheet, partly through assets sale. However, Freeport’s copper business remains affected by the sluggish global economy and supply related issues.

The depressed oil and copper pricing environment also remains a headwind for the company. Sluggishness in China (a major market for copper) adds to the concern. FREEPT MC COP-B Price

FREEPT MC COP-B Price | FREEPT MC COP-B Quote

Freeport currently carries a Zacks Rank #3 (Hold). Better-ranked companies in the mining space include AngloGold Ashanti Ltd. AU, Coeur Mining, Inc.

CDE and Nevsun Resources Ltd. NSU. While AngloGold sports a Zacks Rank #1 (Strong Buy), Coeur Mining and Nevsun Resources hold a Zacks Rank #2 (Buy).

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References

1. ^ Click to get this free report (www.zacks.com)
2. ^ ANGLOGOLD LTD (AU): Free Stock Analysis Report (www.zacks.com)
3. ^ NEVSUN RESOURCS (NSU): Free Stock Analysis Report (www.zacks.com)
4. ^ FREEPT MC COP-B (FCX): Free Stock Analysis Report (www.zacks.com)
5. ^ COEUR MINING (CDE): Free Stock Analysis Report (www.zacks.com)
6. ^ To read this article on Zacks.com click here. (www.zacks.com)
7. ^ Zacks Investment Research (www.zacks.com)