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To: pater tenebrarum who wrote (1003)	6/27/2000 10:58:00 PM
From: LLCF	Read Replies (1) \| Respond to of 436258

< OPEC is basically producing at full capacity now.> Ho ho.... music to my trust's ears, is this correct? DAK

To: pater tenebrarum who wrote (1003)	6/28/2000 7:52:00 AM
From: John Pitera	Read Replies (2) \| Respond to of 436258

Heinz, todays financial times has a special section on gold (the entire metals complex) and derivatives, very substantive and current articles and analysis, I have the dead tree, and they've got some great stuff. ft.com click on derivatives news.ft.com

To: pater tenebrarum who wrote (1003)	6/28/2000 8:55:00 AM
From: flatsville	Read Replies (1) \| Respond to of 436258

After the bell yesterday CNBS made mention of the Phelps Dodge earnings warning and noted the old saying, "Every bull market has a copper root." Here's a bit of "in your face reality." (BLS hide will find it increasingly hard to massage the increases that produced the situation below.) biz.yahoo.com Phelps Dodge Expects Second Quarter and Full-Year 2000 Results To Be Reduced By Operational Issues and Restructuring Charges PHOENIX, June 27 /PRNewswire/ -- Phelps Dodge Corporation today announced that it will report lower-than-expected earnings for the second quarter and full-year 2000 as a result of operational issues in its mining and manufacturing units and related restructuring charges. The company expects to report earnings before non-recurring items of $0.02 to $0.05 per share for the second quarter, and $0.60 to $0.75 for the full year (based on copper prices averaging $0.80 per pound during the second half of the year). Earnings before non-recurring items for the second quarter and full-year 1999 were $0.02 per share and $0.35 per share, respectively. Actual second quarter results will be announced on July 20. (excerpt) - Electric Power Costs During the second quarter, the combination of seasonal, scheduled maintenance by the electric power industry and unusually warm weather in the western United States resulted in both higher market electric rates and spot power shortages. As a result of the higher costs associated with buying power at market rates, copper production costs will be approximately 1.1 cent per pound higher than expected in the quarter, and when coupled with the lost gross margin from a 3.5 million pound reduction in copper production caused by power interruptions, the total earnings impact due to power market conditions will be approximately $8.0 million ($5.0 million, or $0.06 per share, after taxes). While Phelps Dodge expects power interruptions to become less frequent in the third quarter, there is concern that market power rates will remain unusually high. Although the company expects such costs to decrease somewhat in the fourth quarter as cooler temperatures return, its current estimate is that power costs will negatively impact second half 2000 earnings by approximately $12.4 million ($7.7 million, or $0.10 per share, after taxes). Despite the anticipated construction of a number of new power generation plants in the southwestern United States during the next several years, the impact of power costs in 2001 and beyond remains uncertain. In response to these developments in the electric power market, the company has initiated a wide-ranging action program. The company restarted the power plant at the Hidalgo smelter, where smelting operations were suspended last year. This increase in internal power generation capability will reduce dependence on power purchased at market rates. The company also has shifted activities with a high demand for power to less costly time periods, and is now idling equipment during those periods when power costs exceed the value of operating the equipment. Finally, the company is developing a program to shed non-essential power load during peak hours to minimize power costs. -- Fuel Costs Diesel and natural gas costs continue to have a negative impact on Phelps Dodge performance during the second quarter. Compared with the 2000 first quarter, diesel fuel costs are up approximately 10 percent and natural gas costs are up 25 percent, and these costs are up 90 percent and 35 percent respectively from the 1999 second quarter. The company estimates that higher than anticipated fuel costs will increase production costs by approximately $3.0 million ($1.9 million, or $0.02 per share, after taxes) during the second quarter. The company expects diesel and natural gas prices to remain high in the second half of the year, with limited opportunities to offset these costs in the short term; the company expects an impact on unit costs and profitability similar to those in the second quarter totaling approximately $6.0 million ($3.7 million, or $0.05 per share, after taxes).