Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Freeport McMoRan’s Board of Directors have aggressively pursued maximum cash flow and cost reduction in the face of the pandemic, while also implementing measures intended to maintain strong liquidity in this uncertain market. 


The company has yet to decide on cutting copper production at some North American locations. According to Richard C Adkerson, Freeport McMoRan’s chief executive officer, the company is trying to establish low-cost production at its underground ore bodies in Grasberg, which would build cash flow beyond 2020. 


Hudbay Minerals also announced temporary operational cessation at Costancia after the Peruvian goverment declared a state of emergency. The company initially weathered the storm, but rapid changes in the situation obstructed its ability to obtain critical supplies, forcing the company to halt operations. The shutdown will last for three days, after which time a small workforce will help ramp up production. Hudbay operations in the Canadian province of Manitoba are unaffected and have kept shipping concentrate and zinc. However, the company is preparing a contingency plan should operations in the province have to close.


First Quantum Minerals has not experienced significant interruptions to its production or to its sales because of the pandemic, and announced it will maintain its production guidance for the year. Operations in Zambia have surpassed expectations this year, however, South African shipment restrictions have forced the company to choose a different route.


Cobre-Panama copper production projections are on pace for 285,000-310,000mt this year. However, due to safety restrictions, production might be affected during H1 2020. The company is using all of its operating sites to maintain productivity and cost efficiency. 


The Port of Seattle is remaining open amid COVID-19 concerns. The Port has monitored the situation since January, it said on its website, and set up protocols to protect workers. Although Governor Jay Inslee ordered workers in the State of Washington to work from home, Peter Steinbrueck, Port of Seattle Commission’s president, noted the port functions as an essential business.


The Port of Los Angeles and San Pedro Bay Port Complex will also remain operational. The US Coast guard is assessing all incoming vessels, with no COVID-19 infections to report as of Tuesday evening. The Port of Los Angeles said it is conducting business as usual.

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