Freeport-McMoRan 2008 Annual Report Download - page 6

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4 FREEPORT-McMoRan COPPER & GOLD INC. 2008 Annual Report
To Our Shareholders
The theme of this year’s annual report, “Core Assets,”
reflects the strength of our company and our optimism for
the future at a time when our industry and the world’s
economies face significant challenges. With the sharp
and sudden downturn in copper and molybdenum prices
and the weak, uncertain economic outlook, we quickly
changed our business to adapt so that our shareholders
can prosper when business conditions improve.
We entered 2008 in a strong position, having repaid $10
billion in debt associated with our March 2007 acquisition
of Phelps Dodge. Our balance sheet remains strong
with no significant debt maturities for the next several
years. We made important progress during the year in
defining the potential of our significant resources on four
continents, which enabled us to add to our reserves and
establish a roadmap for future reserve additions and
growth opportunities. Our 2008 copper sales of 4.1 billion
pounds established a new record for the company.
As the world’s largest publicly traded producer of copper
and the global leader in molybdenum production, our
revenues and cash flows are being significantly affected
by the sharp decline in prices that occurred in late 2008.
Copper prices averaged $3.61 per pound in the first nine
months of 2008 and declined to a low of $1.26 per pound in
Focused Strategy
Our near-term business strategy is focused on protecting
our liquidity position and preserving our large mineral
resources and growth opportunities for anticipated
improved market conditions in the longer term. We
benefit from having as one of our “Core Assets” the
world’s largest gold mine at our Grasberg minerals
district in Indonesia (pictured), where we are mining in
a high-grade section of the mine at a time of high gold
prices. Grasberg is also the world’s largest copper mine
in terms of recoverable reserves.