| NEW YORK
NEW YORK Oct 21 Freeport-McMoRan Copper & Gold
Inc (FCX.N) said Wednesday it has decided to move forward on
three deferred copper mining projects, citing a positive
outlook for its metal markets and its ability to manage costs
during the global economic downturn.
"We're taking some steps today to invest in some projects
that we had deferred, but we're not taking a large scale change
to the strategy we had put in place at the outset of 2009,"
Chief Executive Richard Adkerson said on a conference call.
Speaking to analysts after the mining giant reported
surprisingly strong third quarter earnings, the CEO said
Freeport's capital expenditure budget for 2009 remained at $1.4
billion as it has all year, down from $2.7 billion in 2008.
He added that the world's second largest copper miner was
currently developing capital spending plans for 2010.
"We have added a couple of projects that would increase the
current outlook for 2010 to $1.4 billion, subject to continuing
analysis of where we're going," he said.
It plans to reinstitute a reclamation project of its old
Miami copper mine in Arizona, east of Phoenix.
The project's costs were originally set at $100 million,
but it will move some excess equipment from its scaled back
Arizona operations, lowering the cost to $40 million.
"It will give us some copper while we advance our
reclamation activities," said Adkerson.
In Peru, Freeport's will spend $50 million at its Cerro
Verde mine to increase the mill rate from 108,000 tonnes per
day to 120,000 tonnes as part of a long-term, major expansion.
"We are going to drill the resource there, to increase the
mill rate, and add 30 million lbs of incremental copper per
year at a very low cash cost," Akerson said, adding that both
projects "have extraordinarily high rates of return."
Freeport has decided to go ahead with a brownfield
expansion at the El Abra mine project in Chile, that would
extend the mine life by 10 years. the project had been deferred
at the end of 2008 as a result of deteriorating market
Adkerson also said El Abra would "provide significant
copper production" of around 300 million lbs of copper per year
with a total project cost of $600 million through 2015.
The initial phase will $450 million over the next three
years, with about $350 million of that cost remaining.
He said, drilling data for El Abra look "very encouraging,"
and beyond the current project are other possible expansions or
possible partnerships at other nearby mines.
In terms of demand for its metal output, Adkerson said he
sees those markets being driven by China, citing record copper
imports, a strong economy, with consumer spending and
infrastructure spending on items that use commodities.
For now, the Phoenix-based miner does not plan to restart
idled North American copper and molybdenum operations.
"But to have a full scale return to maximum production is
going to be contingent on our seeing clear evidence of recovery
of copper demand in the U.S. and Europe. And we haven't see
that yet," said Adkerson. [ID:nN21491100]
(Reporting by Carole Vaporean; Editing by Marguerita Choy)