Freeport Warns of Material Downside in Business in Light of Deepening Indonesian Row

Freeport has the rights to mine in the world’s second largest copper mine in broke ass Indonesia and have been under increased pressure to fork over more money, which in turn has all but shut down the mine and forced them to lay off workers.

What did you expect FCXfags? The fucking mine is in the jungles of Indonesia. It’s only a matter of time before the company kicks out all of those white males and mines the stuff themselves.

As a result, the company is warning of material downside to sales and even attempted to rope in the US govt by saying millions of investors own $FCX via retirement plans. Hahahaha

You stupid shits. Fund managers will sell all of your stock at the first sign of danger, all but castrating your ploy to involve the government.

Face it Freeport: you’re fucked.

Source: Reuters

U.S. mining giant Freeport-McMoRan Inc warned on Monday it could take the Indonesian government to arbitration and seek damages over a contractual dispute that has halted operations at the world’s second-biggest copper mine.
In an escalation of the dispute, Freeport Chief Executive Richard Adkerson also said the company’s local unit had made its first layoffs since negotiations started in January over a new mining permit, and it may let go more workers this week.

The row, which centers around the sanctity of Freeport’s 30-year mining contract, comes as Indonesia seeks to squeeze more revenue out of its mining industry through a shake-up of regulations over foreign ownership and ore processing.

“Right now we are at an impasse with the government,” Adkerson told a news conference in Jakarta.

Freeport has been at loggerheads with Indonesia over the terms of a special mining permit to replace its contract of work, after halting its exports of copper concentrate due to the new mining rules.

On Friday, the miner said it could not meet contractual obligations for copper concentrate shipments from the mine following a five-week export stoppage. Last week, all work was stopped at Freeport’s giant Grasberg mine in the eastern Indonesian province of Papua.

Assuming the export ban continues and operations resume at a local smelter in March, Freeport estimated its first-quarter sales would be reduced by around 170 million pounds of copper and 270,000 ounces of gold. That is equal to a reduction of some 17 percent in Freeport’s total first-quarter copper sales and 59 percent in gold sales, the company said in a statement later on Monday.

The Gresik smelter was forced to halt operations on Jan. 19 because of a labor strike.

“At the end of that period if this dispute is not resolved we reserve the right … to commence arbitration,” Adkerson said. “I sincerely hope we can find a compromise.”

The company also warned of “severe unfavorable consequences for all stakeholders” if no resolution is reached.

“Do they want business or a lawsuit?” Indonesia’s mining minister, Ignasius Jonan, asked in remarks to reporters on Monday, responding to Freeport’s warning that it could take the dispute to arbitration.

“Millions of U.S. citizens indirectly invest in Freeport with their savings accounts and their retirement plans,” Adkerson said. “So what happens … will be a matter of interest for the U.S. government.”

The stock is up like a thousand percent from the lows of 2016. There is plenty of downside here.