Apr. 23 at 4:28 PM
I still hold a few
$FCX contracts that I can't sell without incurring large taxable gains. Today's conference call is durably bad news, though.
The character of the Grasberg rock body has changed, perhaps durably. It's heavier, wetter, and finer than the block cave draw system was designed to carry. Part of this was damage to GBC in the crush, and part of it's water flow changes.
The draw system will be expensive and slow to fix, and the whole operation is potentially more expensive and slow to run going forward.
$FCX sold off into the 30s on cartoonish fears of this sort of problem, but today's sell-off feels underdone to me. Grasberg is vital to their earnings.
As I can't sell
$FCX, I added to
$IE and
$ERO instead. This is a lot of copper off the market into an existing shortage.
