(Reuters) -Copper miner Freeport-McMoRan reported a first-quarter profit on Thursday that slightly beat Wall Street's expectations but said tariffs proposed by U.S. President Donald Trump could increase the cost of materials needed for its U.S. mines by about 5%.

Shares of the Arizona-based company, which operates across the Americas, Indonesia and Europe, were 5.2% higher in midday trading.

Trump's 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.

The U.S. president in February had also 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.

Freeport has yet to directly comment on Trump's tariff plans, but both Chairman Richard Adkerson and CEO Kathleen Quirk repeated their concerns on Thursday about how broad levies could affect the global economy.

"Government policy and tariffs are dominating financial markets, yet at Freeport we are focused on the basics to drive long term value," Adkerson told investors on an earnings conference call.

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, as production in Indonesia fell sharply due to maintenance.

By that measure, analysts had expected earnings of 23.8 cents per share, according to IBES data from LSEG.

Phoenix-based Freeport operates one of two U.S. copper smelters and provides roughly 70% of the country's refined copper production. Company-wide copper output during the quarter declined 20% due to a major maintenance project in Indonesia.

Demand for copper in the U.S. and China – the world's largest markets for the red metal – remains strong, said Quirk, who became CEO last year.

"The fundamentals of the copper market are among the most compelling of any commodity," she said.

The company 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 tariffs.

The company's average realized price for copper rose 12.7% to $4.44 per pound.

Freeport's gold production in Indonesia dropped 77% due to maintenance, but the jump in the price of gold to more than $3,000 per ounce helped offset that dip.

(Reporting by Ernest Scheyder in Houston and Vallari Srivastava in Bengaluru; Editing by Shilpi Majumdar and Susan Fenton)