By Fathin Ungku and Ernest Scheyder

SINGAPORE/HOUSTON (Reuters) – When miners at Indonesia’s giant Grasberg gold and copper mine started testing positive for coronavirus early in the pandemic, the mountain-top mining complex was quickly locked down with a skeletal staff left in place to maintain production.But as months of travel curbs dragged on, angry workers blockaded the mine for four days in August until the operator – a unit of U.S. miner Freeport McMoRan Inc – relented and let them resume weekly rotations out of the site via a four-hour trek by cable car and bus to towns below.

Now the workers are happier, but health experts fear the greater risk of a new outbreak.

The tensions expose the balancing act to maintain output at full blast, while containing COVID-19 in mines like Grasberg, the world’s largest gold mine and second-largest copper mine.

“We’ve put the priority and the health of our workers and community at the top of our list,” Freeport McMoRan Chief Executive Richard Adkerson told Reuters. “From the outset, we recognized that (Grasberg) was a particularly vulnerable place due to the size of the workforce” of nearly 30,000 people.

While Freeport has halted some global operations due to the pandemic, production has continued at the 14,000 foot (4,267 metre) -high Grasberg mine despite Indonesia facing one of the worst coronavirus outbreaks in Southeast Asia.

In May, Freeport said it would operate with a “skeletal team” because of a rise in coronavirus cases in the area, including at the workers’ living quarters. Freeport said at the time it was limiting contractors and removing “high-risk” workers but did not specify how many people would be working at the mine.

But the lockdown took a psychological toll on the workers stuck above the clouds at the site since April, some

By Fathin Ungku and Ernest Scheyder

SINGAPORE/HOUSTON (Reuters) – When miners at Indonesia’s giant Grasberg gold and copper mine started testing positive for coronavirus early in the pandemic, the mountain-top mining complex was quickly locked down with a skeletal staff left in place to maintain production.But as months of travel curbs dragged on, angry workers blockaded the mine for four days in August until the operator – a unit of U.S. miner Freeport McMoRan Inc – relented and let them resume weekly rotations out of the site via a four-hour trek by cable car and bus to towns below.

Now the workers are happier, but health experts fear the greater risk of a new outbreak.

The tensions expose the balancing act to maintain output at full blast, while containing COVID-19 in mines like Grasberg, the world’s largest gold mine and second-largest copper mine.

“We’ve put the priority and the health of our workers and community at the top of our list,” Freeport McMoRan Chief Executive Richard Adkerson told Reuters. “From the outset, we recognized that (Grasberg) was a particularly vulnerable place due to the size of the workforce” of nearly 30,000 people.

While Freeport has halted some global operations due to the pandemic, production has continued at the 14,000 foot (4,267 metre) -high Grasberg mine despite Indonesia facing one of the worst coronavirus outbreaks in Southeast Asia.

In May, Freeport said it would operate with a “skeletal team” because of a rise in coronavirus cases in the area, including at the workers’ living quarters. Freeport said at the time it was limiting contractors and removing “high-risk” workers but did not specify how many people would be working at the mine.

But the lockdown took a psychological toll on the workers stuck above the clouds at the site since April, some

Despite a relatively strong set of FQ1 numbers, I am concerned about the Conagra (NYSE:CAG) outlook on several fronts. Firstly, there will be some tough comparisons ahead as consumers eventually regain mobility, and the food at home tailwind fades. Secondly, I see the company’s low level of advertising reinvestment is negative for the future earnings outlook, especially with competitors stepping up investments in longer-term brand equity. At the current multiple, I don’t think CAG shares offer much in the way of long-term value.

Strong FQ1 Results Benefit from Packaged Food Tailwinds

CAG posted a better-than-expected set of FQ1 results, with EPS of $0.70 on the back of better-than-expected organic sales (+15.0%), significant gross margin expansion of c. 244 bps, and opex leverage.

Source: Conagra FQ1 Presentation Slides

The key to the quarter was continued demand for packaged foods through the pandemic, with retailer inventory restocking also providing a c. 600 bps benefit. The latter was reflected in Grocery & Snacks and Refrigerated & Frozen organic sales growth, which accelerated to +20.7% and 19.0%, respectively. Pricing trends also benefited from lower promotional activity in the quarter. On the other hand, foodservice trends remained under pressure, with organic sales down 20.3% due to lower away-from-home consumption.

Source: Conagra FQ1 Presentation Slides

While these are certainly very strong numbers, I do question the sustainability going forward. As both US retail segments were helped by a sizeable trade load that likely implies some front-loaded demand, I expect to see this reverse in the upcoming quarter. Additionally, top-line growth was also boosted by c. 70 bps from non-recurring trade accruals, implying a lower underlying growth trajectory.

Dissecting the Bottom-Line Strength

The bottom-line performance was also very commendable – gross margins reached 30.7%, above expectations on better volume leverage, and the trade spend accrual benefit. Meanwhile,

Sunak has already pumped billions into virus-related health spending and jobs support schemes


JOHN SIBLEY

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UK finance minister Rishi Sunak, battling record deficits and soaring debt due to his government’s emergency coronavirus response, faces a politically dangerous balancing act to pay the bill, analysts say.

As the outbreak raged, total public debt rocketed above £2.0 trillion for the first time, striking a record high proportion of 102 percent of gross domestic product (GDP).

Commentators argue that a combination of taxation, inflation, spending cuts, and even economic growth could help balance the books for Sunak.

But the public purse also faces the additional threat of a potential no-deal Brexit at the end of this year.

Public sector net borrowing — the state’s preferred measure of the deficit — hit a record £173.7 billion in the first five months of its 2020-2021 fiscal year, or April to August.

That was an eye-watering £145 billion more than the year-earlier figure.

‘Unavoidable’ tax hikes

“It is unavoidable that taxes will rise… but the right decision is to not raise taxes now,” Warwick University economics professor Arun Advani told AFP.

“It is hard to predict when — it will depend on the pandemic. If we see a winter not as bad as the spring, then end of March 2021 could be the time to… lay out an economic plan.”

Chancellor of the Exchequer Sunak, a rising star in Conservative Prime Minister Boris Johnson’s administration, has so far pumped billions into virus-related health spending and jobs support schemes.

Last week he launched a new coronavirus jobs protection initiative that will support wages of staff keeping at least one third of their usual working hours.

But the plan is dwarfed by the current generous furlough scheme, which is due to end next month after paying