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8 FREEPORT-McMoRan COPPER & GOLD INC. 2008 Annual Report
Operational Overview
North America
Freeport-McMoRan Copper & Gold Inc. (FCX), the leader in
North America copper production, currently operates five
open-pit copper mines in the southwestern United States
(U.S.), including Morenci, Sierrita, Bagdad and Safford
in Arizona and Tyrone in New Mexico. FCX conducts
molybdenum mining operations at the Henderson underground
mine in Colorado, in addition to sales of by-product
molybdenum from Sierrita and Bagdad. Consolidated copper
sales in North America totaled 1.4 billion pounds in 2008
compared to approximately 1.3 billion pounds in 2007. The
average realized price for copper sold in 2008 was $3.07 per
pound, compared to $3.10 in 2007. Consolidated molybdenum
sales, including production from FCX’s Henderson primary
molybdenum mine and by-product molybdenum from North
and South America copper mines, totaled approximately
71 million pounds in 2008, compared to 69 million pounds
in 2007. The average realized price for molybdenum in
2008 was $30.55 per pound, compared to $25.87 in 2007.
In response to weak market conditions, during the
fourth quarter of 2008 and January 2009 FCX revised its
operating plans at its North America copper mines to
achieve a 50 percent reduction in the mining and crushed-
leach rates at the Morenci mine, a 50 percent reduction
in the mining and stacking rates at the Safford mine, a 50
percent reduction in the mining rate at the Tyrone mine
and a suspension of mining and milling activities at the
Chino mine in New Mexico. The revised plans also include
capital cost reductions, including deferrals of incremental
expansion projects at the Sierrita and Bagdad mines and
the planned restart of the Miami mine in Arizona.
FCX also revised operating plans at its Henderson
primary molybdenum mine to operate at a curtailed rate,
initially to achieve an approximate 25 percent reduction
in Henderson’s annual production.
For the year 2009, FCX expects sales from North America
copper mines to approximate 1.1 billion pounds of copper
and molybdenum sales to approximate 60 million pounds.
FCX suspended construction activities associated with the
restart of the Climax molybdenum mine near Leadville,