Workforce shortage limits copper output in the United States
The mining industry is facing a human resources crisis in the United States at a time when demand for the products it produces is on the rise. Freeport-McMoRan is among the mining companies struggling with staffing issues.
After reporting better than expected quarterly earnings, president Kathleen Quirk told investors that “We could have in 2022 produced more (copper) if we were fully staffed. And I believe that is the case again this year,”
Reuters reported that Freeport-McMoRan currently has 1,300 job openings in the country, more than 10 percent of its U.S. workforce. The company's U.S. copper production fell 7 percent last quarter from the same period in 2021. For 2023, the company expects its U.S. copper output to slip nearly 1 percent from 2022 levels.
Executives noted they are not seeing the same trends in South America or Indonesia, where Freeport also operates large mines.
“Our work is hard work. And it’s harder to drive a big haul truck (at a copper mine) than it is to drive an Amazon or UPS or FedEx truck,” said Chief Executive Richard Adkerson, who called the worker shortage a “strategic challenge” for the Phoenix-based company.
To help retain its workforce, Adkerson said Freeport plans to give “substantial” pay raises to its U.S. staff this year. The company is working to train replacement workers, but added that the experience level of its staff in the United States is not what it was even five years ago.
“I think that does have some implications on our ability to develop a mine in the US,” Quirk said. More than half of Freeport’s estimated 235 billion pounds of copper resources are in the United States, and Adkerson has called the country key to Freeport’s growth plans.
Freeport posted fourth-quarter net income of $697 million, or 48 cents per share, compared with $1.1 billion, or 74 cents per share, in the year-ago period. Excluding one-time items, Freeport posted a quarterly profit of 52 cents per share, ahead of analysts’ estimate of 46 cents per share, according to Refinitiv data.
Freeport reported average realized copper prices of $3.77 per pound in the quarter, compared with $4.42 a year earlier. The company expects its annual capital expenditure to be about $5.2 billion, higher than $3.5 billion marked in 2022.
Despite recent macroeconomic concerns, especially in China, Freeport said it has not seen slowing demand for the red metal. “If we could produce more, our customers would want it,” Quirk said.