TORONTO (miningweekly.com) – Despite reporting a 21% drop in first-quarter earnings, base metals miner Freeport-McMoRan’s NYSE-listed stock was rising on Thursday after it beat analyst expectations.

For the three months ended March 31, the Phoenix, Arizona-based miner reported net income falling to $510-million, or $0.49 a share, compared with $648-million, or $0.68 a share, a year earlier. Revenue rose 8.8% to $4.99-billion, up from $4.58-billion.

Analysts had on average expected earnings of $0.43 a share and revenue of $4.92-billion.

Freeport cautioned that subsidiary PT Freeport Indonesia (PT-FI) might be forced to implement plans to reduce operating costs, defer capital expenditures and implement workforce reductions in Indonesia, should it not be able to resolve a legal dispute over its contract of work (COW) with the government.

Through its 90.64%-owned subsidiary PT-FI, Freeport's assets include one of the world's largest copper and gold deposits at the Grasberg minerals district, in Papua, Indonesia. PT-FI operates a joint venture, which produces copper concentrates that contain significant quantities of gold and silver.

On January 12, local beneficiation regulations and an export duty were imposed on Indonesian miners, which Freeport contends conflicted with its rights under its COW.

“We are actively engaged in reaching a resolution to enable resumption of copper concentrate exports in Indonesia,” Freeport chairperson James Moffett said.

To date, PT-FI had not received authorisation from the Indonesian government to export copper concentrate.

As a result of the delay in obtaining approvals for 2014 exports, PT-FI had already implemented changes to its operations to align its concentrate production with PT Smelting’s operating plans.

During the first-quarter, PT-FI’s milling rate averaged about 118 000 t/d, which is about half of normal rates.

Freeport said it had deferred shipping about 125-million pounds of copper and 140 000 oz of gold in the period.

During the quarter, Freeport’s consolidated copper output fell 3.3% year-on-year to 948-million pounds. Gold output fell 1.7% to 231 000 oz and molybdenum output fell 8.3% to 24-million pounds.

Meanwhile, the realised prices for its main commodities also declined.

Freeport said its average realised price for copper was $3.14/lb, down from $3.51/lb a year earlier, while gold realised $1 300/oz, down from $1 606/oz, and molybdenum fetched $11.21/lb, down from $12.75/lb.

During the quarter, Freeport’s oil operations were an area of strength. The company produced 16.1-million barrels of oil equivalents (MMBOE) and said that it expected second-quarter output of 15.2 MMBOE.

The company booked an average selling price of $93.76/bbl compared with a cash cost of $18.51/bbl.

Freeport currently had about $20.85-billion in debt on its books and had targeted cutting its debt position to $12-billion by the end of 2016.

Around noon on Thursday, Freeport’s NYSE-listed shares traded at about $34.09, up $0.60 apiece on Wednesday’s closing price.