Freeport-McMoRan (NYSE: FCX) announced on Tuesday that its Indonesian subsidiary, PT Freeport Indonesia (PT-FI), has successfully finished the construction of its new Manyar smelter located in Gresik. The company has also commenced commissioning operations at the facility.
According to FCX, the newly constructed smelter is anticipated to commence production of copper cathodes in the coming months. The company remains on track to achieve full ramp-up by the end of 2024, consistent with its earlier projections.
Additionally, PT-FI received approval from the Indonesian government on July 2 to export copper concentrates and anode slimes until December 2024, aligning with the anticipated ramp-up of its new processing facilities. During this period, PT-FI will adhere to Indonesian regulations by paying export duties on copper concentrates.
Previously, PT-FI’s licenses for concentrate and anode slime exports had expired on May 31, 2024, with no exports taking place in June.
In a joint statement, FCX Chairman Richard Adkerson and CEO Kathleen Quirk expressed satisfaction with achieving this significant milestone for their new smelter in Indonesia. They highlighted the successful execution of the complex project and the readiness to safely and efficiently achieve full production ramp-up. This milestone positions PT-FI as a fully integrated producer in Indonesia, bolstering its foundation for extending long-term operating rights.
Due to delays in obtaining export licenses, Freeport now anticipates that a portion of its second-quarter production will be shipped in subsequent periods. Consequently, the company expects consolidated sales for Q2 2024 to be approximately 5% below its initial guidance of 975 million lb. of copper and 30% lower than its 500,000 oz. of gold guidance for the same period.
Revising its earlier estimates, FCX now projects consolidated unit net cash costs for Q2 2024 to be around $1.77 per lb. of copper, up from the previous estimate of $1.57 per lb. This adjustment primarily reflects reduced byproduct credits due to shipment delays. The company anticipates the average copper realization for the second quarter to approximate $4.45 per lb.
Based in Phoenix, Arizona, Freeport-McMoRan stated it is reviewing its sales outlook as part of routine quarterly forecasting updates. At present, it does not foresee any significant changes to its annual 2024 copper volume guidance.
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