Profile: Freeport-McMoRan Inc (FCX)
23 Jul 2014
Freeport-McMoRan Inc., incorporated on November 10, 1987, is a United States-based natural resources company with a global portfolio of mineral assets, including copper, gold, and molybdenum, in addition to oil and gas resources. FCX's portfolio of assets includes the Grasberg minerals district in Indonesia; mining operations in the Americas, including the large-scale Morenci minerals district in North America and the Cerro Verde operation in South America; the Tenke Fungurume minerals district in the Democratic Republic of Congo, and oil and natural gas assets in North America, including reserves in the Deepwater GOM, onshore and offshore California and in the Haynesville natural gas shale play, and a position in the water Inboard Lower Tertiary/Cretaceous natural gas trend on the Shelf of the GOM and onshore in South Louisiana.
As of December 31, 2013, consolidated recoverable and probable mineral reserves totaled 111.2 billion pounds of copper, 31.3 million ounces of gold, 3.26 billion pounds of molybdenum, 308.5 million ounces of silver and 0.87 billion pounds of cobalt. Molybdenum concentrate is also produced by certain of its North America copper mines (Sierrita, Bagdad, Morenci and Chino). In addition to copper, the Cerro Verde mine also produces molybdenum concentrates, and the Candelaria and Ojos del Salado mines produce gold and silver. In Indonesia, PT Freeport Indonesia operates the mines in the Grasberg minerals district. In addition to copper, the Grasberg minerals district also produces of gold and silver. In Africa, its subsidiary Tenke Fungurume Mining S.A.R.L. (TFM) operates the mines in the Tenke minerals district. In addition to copper, the Tenke minerals district also produces cobalt hydroxide.
North America Copper Mines
As of December 31, 2013, the Company operated seven copper mines in North America: Morenci, Bagdad, Safford, Sierrita and Miami in Arizona, and Tyrone and Chino in New Mexico. All of these mining operations are wholly owned, except for Morenci. The Company records its 85% joint venture interest in Morenci using the proportionate consolidation method. The North America copper mines include open-pit mining, sulfide ore concentrating, leaching and solution extraction/electrowinning (SX/EW) operations. Molybdenum concentrate is also produced by certain of its North America copper mines (Sierrita, Bagdad, Morenci and Chino). A majority of the copper produced at its North America copper mines is cast into copper rod by its Rod & Refining operations. The remainder of its North America copper sales is in the form of copper cathode or copper concentrate.
South America Mining
The Company operates four copper mines in South America: Cerro Verde in Peru, and El Abra, Candelaria and Ojos del Salado in Chile. The Company owns a 53.56% interest in Cerro Verde, a 51% interest in El Abra and an 80% interest in both Candelaria and Ojos del Salado mining complex. South America mining includes open-pit and underground mining, sulfide ore concentrating, leaching and SX/EW operations. Production from our South America mines is sold as copper concentrate or copper cathode under long-term contracts. Its South America mines ship a portion of their copper concentrate inventories to Atlantic Copper. In addition to copper, the Candelaria and Ojos del Salado mines produce gold and silver, and the Cerro Verde mine produces molybdenum concentrates.
Indonesia mining includes PT-FI’s Grasberg minerals district. The Company owns 90.64% of PT-FI, including 9.36% owned through its wholly owned subsidiary, PT Indocopper Investama. PT-FI produces copper concentrates, which contain quantities of gold and silver. Substantially all of PT-FI’s copper concentrates are sold under long-term contracts, of which approximately one-half is sold to Atlantic Copper and PT Smelting, and the remainder to other third-party customers. PT-FI proportionately consolidates certain unincorporated joint ventures with Rio Tinto plc (Rio Tinto), under which Rio Tinto has a 40% interest in certain assets and future production exceeding specified annual amounts of copper, gold and silver.
Africa mining includes TFM's Tenke minerals district. It holds an effective 56% interest in the Tenke copper and cobalt mining concessions in the Katanga province of the DRC through its consolidated subsidiary TFM, and it is the operator of Tenke. The Tenke operation includes surface mining, leaching and SX/EW operations. Copper production from the Tenke minerals district is sold as copper cathode. In addition to copper, the Tenke minerals district produces cobalt hydroxide.
The Company has two wholly owned molybdenum mines in North America the Henderson underground mine and the Climax open-pit mine, both in Colorado. The Henderson and Climax mines produce high-purity, chemical-grade molybdenum concentrates, which are typically further processed into value-added molybdenum chemical products. The majority of the molybdenum concentrates produced at the Henderson and Climax mines, as well as from certain of its North and South America copper mines, are processed at its own conversion facilities.
Smelting & Refining
Atlantic Copper, its wholly owned subsidiary located in Spain, smelts and refines copper concentrates and markets refined copper and precious metals in slimes. During 2013, Atlantic Copper purchased 32% of its concentrate requirements from its South America mining operations, 16% from its Indonesia mining operations and 13% from its North America copper mines, with the remainder purchased from third parties. Through this form of downstream integration, the Company is assured placement of a portion of its concentrate production. Smelting and refining charges consist of a base rate and, in certain contracts, price participation based on copper prices. Treatment charges for smelting and refining copper concentrates represent a cost to its mining operations, and income to Atlantic Copper and PT Smelting. Thus, higher treatment and refining charges benefit its smelter operations and adversely affect its mining operations. Its North America copper mines are less affected by changes in treatment and refining charges because these operations are largely integrated with its wholly owned smelter located in Miami, Arizona.
Oil and Gas Operations
The Company’s oil and gas operations provide exposure to energy markets with positive fundamentals, margins and cash flows and a resource base with financially attractive exploration and development opportunities. The portfolio of assets includes oil production facilities and growth in the Deepwater GOM, oil production from the onshore Eagle Ford shale play in Texas, oil production facilities onshore and offshore California, onshore natural gas resources in the Haynesville shale play in Louisiana, natural gas production from the Madden area in central Wyoming and an industry position in the shallow-water Inboard Lower Tertiary/Cretaceous natural gas trend on the Shelf of the GOM and onshore in South Louisiana. In 2013, more than 90% of its oil and gas revenues were from oil and NGLs.
333 N Central Ave
PHOENIX AZ 85004-2121
Company Web Links
- UPDATE 3-Freeport says Indonesia exports could resume soon
- METALS-Copper hits highest since Feb, zinc races to 3-year peak
- Copper miners' paths diverge over Indonesia export tax
- Freeport says draft MoU agreed but not signed, no export timeframe
- Freeport agrees contract MoU, Indonesia govt officials say