Freeport copper output exceeded expectations and continued to be optimistic about copper prospects.

Freeport-McMoRan produced more copper than expected in the previous quarter and raised its annual sales forecast because of the urgent need to increase tension in global metal supplies.

Free port-McMoran

The Phoenix-based company is expanding its underground operations at its flagship Grasberg mine in Indonesia as planned and is increasing production in North America as copper prices soar to their highest level in nearly a decade. Freeport plans to restore production at the (Cerro Verde) mine in Serovide, Peru, to pre-outbreak levels as soon as possible.

At a time of strong demand and production disruptions elsewhere, the expansion of Freeport has provided more metal for smelters and consumers. According to reports, CEO Richard Adelson (Richard Adkerson) believes that copper prices will not rebound, but will be supported by fundamentals, rising to more than $4 a pound, inventory is scarce, demand is strong, and big new projects are still waiting.

Mr Adelson points out that the outlook for copper has never been better, and he cites structural deficits to support higher prices.

In the first quarter of this year, Freeport reported that it now expects sales of about 3.85 billion pounds this year, slightly higher than expected in January, and expects annual sales to grow to 4.4 billion pounds over the next two years.

Higher production costs are one of the only factors hampering earnings growth, with cash costs in line with expectations for the quarter, but the company raised its full-year forecast because of higher energy and freight prices. Adjusted earnings per share were 51 cents in the first quarter, compared with an average forecast of 50 cents. Sales met expectations.

The remaining component of Freeport's deployment in Indonesia is a smelter. The company agreed to renew its contract to build a smelter at (Grasberg) in Glasberg and has been working with the government on proposals. It has yet to be decided whether to carry out the project alone or with partners.

The company's share price has more than tripled in the past year, making it one of the best performers.