(Reuters) -Freeport-McMoRan reported a fall in its first-quarter profit on Thursday and said the tariffs proposed by U.S. President Donald Trump could increase the cost of goods the copper miner purchases in the country by about 5%.
His sweeping tariffs on most U.S. imports and a rapidly intensifying trade war with China have sparked uncertainty across the mining industry and left companies scrambling to look for alternative supply chains.
Trump in February had ordered a probe into potential new tariffs on copper imports to rebuild U.S. production of the metal critical to electric vehicles, military hardware, power grid and many consumer goods.
“FCX is monitoring potential indirect impacts of U.S. trade policy on economic growth and the potential for impacts on demand for copper,” it said. “Efforts are under way to evaluate alternative sourcing options to mitigate potential impacts.”
Phoenix, Arizona-based Freeport provides roughly 70% of the total U.S. refined copper production. Its copper output during the quarter declined 20% due to a major maintenance project in Indonesia.
It produced 868 million recoverable pounds of copper in the first quarter, compared with 1.09 billion recoverable pounds a year earlier.
The decrease in production, however, was partly offset by rising commodity prices. Copper prices on the London Metal Exchange jumped 10.7% during the January to March period, spurred by higher demand from China’s economic stimulus and supply concerns sparked by Trump’s sweeping tariffs.
The company’s average realized price for copper rose 12.7% to $4.44 per pound.
Freeport’s net income attributable to common shareholders fell to $352 million, or 24 cents per share, for the three months ended March 31, from $473 million, or 32 cents per share, a year earlier.
(Reporting by Vallari Srivastava in Bengaluru; Editing by Shilpi Majumdar)
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