Freeport-McMoRan Inc (NYSE:FCX) has started facing troubles in its mining operations. The company is the owner of one of the largest gold and copper mines in the world. The Grasberg mine in Indonesia has been on and off a lot recently. The mine is of great importance to the company, since it accounted for 93% of gold and 16% of copper produced by FCX.
The mining operations have seen a number of hindrances from the government, such as a recent ruling that raw copper cannot be exported until it is refined. The problem is that there is a lack of adequate refining facilities present in the region. The company is in talks with the government to sort out these issues. However, political problems are not the only ones harming operations in the mine. There is also a looming question about whether Freeport’s license to operate the mine is even valid? Presently, it seems that Freeport will survive the danger, but it is not sure whether the question would just go away.
Another big problem for Grasberg is that it is located in the province of Papua, where several separatist groups have emerged. Unless this political upheaval is dealt with, the company may be soon asked to pack up and leave. At present, the company has temporarily shut down operations at Grasberg. However, it is believed that the operations were actually shut down due to problems with the laborers. The company had recently dealt with a labor dispute, before encountering another one from 50 workers, who had not participated in the previous one.
It is never easy for just 50 workers to just close down an entire mining operation, but unfortunately all they had to do was close the only road in and out of Grasberg. With a history of disputes and unrest in the region, it is very surprising why the company would continue to operate the mine in such a location, rather than look for other ventures.
Freeport-McMoRan Inc (NYSE:FCX) closed at $20.67, dropping by 0.77% on April 19. The company has 1.04 billion shares being traded in the market, with a 52 week range of $16.43-$39.32.
