Profile: Freeport-McMoRan Copper & Gold Inc (FCX.N)

Freeport-McMoRan Copper & Gold Inc. (FCX), incorporated on November 10, 1987, is an international mining company. FCX is one of the copper, gold and molybdenum mining companies in terms of reserves and production. Its portfolio of assets includes the Grasberg minerals district in Indonesia, mining operations in North and South America, and the Tenke Fungurume (Tenke) minerals district in the Democratic Republic of Congo (DRC). The Grasberg minerals district contains the recoverable copper reserve and the gold reserve. It also operates Atlantic Copper, its wholly owned copper smelting and refining unit in Spain. FCX has its operations into five primary divisions: North America copper mines, South America mining, Indonesia mining, Africa mining and Molybdenum operations. On January 21, 2013, FCX, through a newly formed joint venture, entered into a definitive agreement with OM Group, Inc. to acquire a large-scale cobalt refinery located in Kokkola, Finland, and the related sales and marketing business.

As of December 31, 2012, consolidated recoverable proven and probable reserves totaled 116.5 billion pounds of copper, 32.5 million ounces of gold, 3.42 billion pounds of molybdenum, 321.4 million ounces of silver and 0.84 billion pounds of cobalt. Approximately 33% of its copper reserves are in North America, 33% are in South America, 27% are in Indonesia and 7% are in Africa. 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 also 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, Tenke Fungurume Mining S.A.R.L. (TFM) operates the mine in the Tenke Fungurume minerals district (the Tenke mine). In addition to the operating mines, it has four non-operating copper mines: Ajo, Bisbee and Tohono in Arizona, and Cobre in New Mexico; and the Climax molybdenum mine in Colorado.

North America Copper Mines

As of December 31, 2012, 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, an unincorporated joint venture, in which it owns an 85% undivided interest. 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

FCX 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. South America mining includes open-pit and underground mining, sulfide ore concentrating, leaching and SX/EW operations. Production from its South America mines is sold as copper concentrate or copper cathode under long-term contracts. In addition to copper, the Cerro Verde mine also produces molybdenum concentrates, and the Candelaria and Ojos del Salado mines also produce gold and silver.

Indonesia Mining

Indonesia mining includes PT Freeport Indonesia’s Grasberg minerals district. FCX owns 90.64% of PT Freeport Indonesia, including 9.36% through its wholly owned subsidiary, PT Indocopper Investama. PT Freeport Indonesia produces copper concentrates, which contain gold and silver. All of PT Freeport Indonesia’s copper concentrates are sold under long-term contracts, of which approximately one-half is sold to affiliated smelters, Atlantic Copper and PT Smelting (PT Freeport Indonesia’s 25% owned copper smelter and refinery in Indonesia), and the remainder to other customers. The Company has several projects in progress in the Grasberg minerals district, including development of underground ore bodies located beneath and nearby the Grasberg open pit.

Africa Mining

Africa mining consists of the Tenke copper and cobalt mining concessions in the Katanga province of the DRC. The Tenke mine includes surface mining, leaching and SX/EW operations. Copper production from the Tenke mine is sold as copper cathode. In addition to copper, the Tenke mine produces cobalt hydroxide. All Africa mining operations are conducted by Tenke Fungurume Mining S.A.R.L. (TFM).

Molybdenum

FCX’s is an integrated producer of molybdenum, with mining, sulfide ore concentrating, roasting and processing facilities that produce molybdenum-based chemicals, molybdenum metal powder and metallurgical products, which are sold to customers worldwide. The Company’s molybdenum operations include the wholly owned Henderson molybdenum mine in Colorado and related conversion facilities. The Henderson underground mine produces chemical-grade molybdenum concentrates, which are typically further processed into molybdenum chemical products. The Molybdenum operations also include the wholly owned Climax molybdenum mine in Colorado; a sales company that purchases and sells molybdenum from its Henderson mine and from certain of its North and South America mines that produce molybdenum, and related conversion facilities that, at times, roast and/or process material on a toll basis for third-parties.

Atlantic Copper Smelting & Refining

Atlantic Copper, FCX’s wholly owned subsidiary located in Spain, smelts and refines copper concentrates and markets refined copper and precious metals in slimes. During 2012, Atlantic Copper purchased approximately 31% of its concentrate requirements from itsSouth America mining operations, approximately 16% from its North America copper mines and approximately 10% from its Indonesia mining operations.