Copper miner strike at Freeport McMoRan threatens supply

Dr. Copper…

According to industry officials, a strike involving thousands of workers at Freeport McMoRan's Indonesian copper mine and port has delayed around 133,000 tonnes of copper ore concentrate shipments. Activity at Grasberg, the world's third-largest copper mine, was suspended on Thursday after workers launched a month-long strike seeking higher wages. Workers at Freeport's Amamapare port in Papua joined miners in a month-long strike over pay, stranding six vessels awaiting copper ore cargo to be delivered to smelter plants in Indonesia, China, the Philippines and Japan.

Based on the mine's daily production target, the strike potentially cut output of 230,000 tonnes of ore per day, said energy ministry official Thamrin Sihite. A total 544,311 tonnes of copper was taken from the Grasberg mine last year, around 3.8% of the world's output. The strike in Indonesia comes just days after workers in Freeport's Peru copper mine Cerro Verde (Compania de Minas Buenaventura SA and a subsidiary of Sumitomo Corp. also holding a stakes in the company), which produces 2% of the world's copper supply, launched an indefinite strike this week for better pay and benefits.

The strike, along with recent supply disruptions at Latin American mines, has raised concerns over a global shortage of the metal, though worries about the global economy kept copper prices at bay this week.

Freeport McMoran (FCX : NYSE : US$41.59), Net Change: -0.95, % Change: -2.23%, Volume: 15,027,925

Canaccord Genuity Inc. is a global investment banking and institutional brokerage firm. Their website is www.canaccordgenuity.com.

For disclosures of any equities mentioned here please see: http://www.canaccordgenuity.com/en/ODD/pages/disclosures.aspx

About the Author

Canaccord Genuity Inc. is a global investment banking and institutional brokerage firm. Their website is www.canaccordgenuity.com.

For disclosures of any equities mentioned here please see: http://www.canaccordgenuity.com/en/ODD/pages/disclosures.aspx.

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