Freeport-McMoRan 2011 Annual Report Download - page 110

108 | FREEPORT-McMoRan COPPER & GOLD INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
table below. A summary of the carrying amount and fair value of
FCX’s other nancial instruments as of December31 follows:
2011 2010
Carrying Fair Carrying Fair
Amount Value Amount Value
Cash and cash equivalents
a
$ 4,822 $ 4,822 $ 3,738 $ 3,738
MMR cost investment
b
475 507 500 623
Net embedded derivatives
included in accounts
receivable or payable
a
(10) (10) 242 242
Trust assets (current and
long-term)
a,c
152 152 148 148
Available-for-sale securities
(current and long-term)
a,c
11 11 34 34
Derivative assets
a,d
5 5 18 18
Derivative liabilities
a,e
(13) (13) (10) (10)
Debt (including amounts
due within one year)
f
(3,537) (3,797) (4,755) (5,146)
a. Recorded at fair value.
b. Recorded at cost and included in other assets. At December 31, 2011, these securities
were not actively trading; as such, fair value was based on a pricing simulation model
using MMR’s publicly traded common stock as the most significant observable input.
At December 31, 2010, fair value was based on a bid evaluation, which is an estimated
price at which a dealer would pay for a security.
c. Current portion included in other current assets and long-term portion included in
other assets.
d. Included in other current assets.
e. Included in accounts payable and accrued liabilities.
f. Recorded at cost except for long-term debt acquired in the FMC acquisition, which
was recorded at fair value at the acquisition date. Fair value of substantially all of FCX’s
long-term debt is estimated based on quoted market prices.
NOTE 17. Business Segments
FCX has organized its operations into ve primary divisions —
North America copper mines, South America mining,
Indonesia mining, Africa mining and Molybdenum operations.
Notwithstanding this structure, FCX internally reports information
on a mine-by-mine basis. erefore, FCX concluded that its
operating segments include individual mines. Operating segments
that meet certain thresholds are reportable segments. Further
discussion of the reportable segments included in FCX’s primary
operating divisions, as well as FCX’s other reportable segments —
Rod & Rening and Atlantic Copper Smelting & Rening —
follows. Refer to Note 2 for information on FCX’s ownership
interests and Note 14 for discussion of PT Freeport Indonesia’s and
TFM’s mining contracts.
North America Copper Mines. FCX has seven operating copper
mines in North America — Morenci, Sierrita, Bagdad, Saord and
Miami in Arizona, and Tyrone and Chino in New Mexico. e
North America copper mines include open-pit mining, sulde ore
concentrating, leaching and SX/EW operations. A majority of the
copper produced at the North America copper mines is cast into
copper rod by FCX’s Rod & Rening operations. e North
America copper mines include the Morenci copper mine as a
reportable segment.
Morenci. e Morenci open-pit mine, located in southeastern
Arizona, produces copper cathodes and copper concentrates. In
addition, the Morenci mine produces molybdenum concentrates.
e Morenci mine produced 42 percent of FCX’s North America
copper during 2011.
Other Mines. Other mines include FCX’s other operating
southwestern U.S. copper mines — Sierrita, Bagdad, Saord, Miami,
Tyrone and Chino. In addition to copper, certain of these mines
(primarily the Sierrita and Bagdad mines) produce molybdenum
concentrates.
South America. South America mining includes four operating
copper mines — Cerro Verde in Peru, and Candelaria, Ojos del
Salado and El Abra in Chile. ese operations include open-pit and
underground mining, sulde ore concentrating, leaching and
SX/EW operations. South America mining includes the Cerro Verde
copper mine as a reportable segment.
Cerro Verde. e Cerro Verde open-pit copper mine, located
near Arequipa, Peru, produces copper cathodes and copper
concentrates. In addition to copper, the Cerro Verde mine
produces molybdenum concentrates. e Cerro Verde mine
produced 50 percent of FCX’s South America copper during 2011.
Other Mines. Other mines include FCX’s Chilean copper mines —
Candelaria, Ojos del Salado and El Abra. In addition to copper, the
Candelaria and Ojos del Salado mines produce gold and silver.
Indonesia. Indonesia mining includes PT Freeport Indonesia’s
Grasberg minerals district. PT Freeport Indonesia produces copper
concentrates, which contain signicant quantities of gold and silver.
Africa. Africa mining includes the Tenke Fungurume minerals
district. e Tenke Fungurume mine includes open-pit mining,
leaching and SX/EW operations. In addition to copper, the Tenke
Fungurume mine produces cobalt hydroxide. Copper cathode
production commenced in March 2009.
Molybdenum. e Molybdenum segment is an integrated
producer of molybdenum, with mining, sulde ore concentrating,
roasting and processing facilities that produce high-purity,
molybdenum-based chemicals, molybdenum metal powder and
metallurgical products, which are sold to customers around the
world, and includes the wholly owned Henderson molybdenum
mine in Colorado and related conversion facilities. e Henderson
underground mine produces high-purity, chemical-grade
molybdenum concentrates, which are typically further processed
into value-added molybdenum chemical products. is segment
also includes a sales company that purchases and sells
molybdenum from the Henderson mine as well as from FCX’s
North and South America copper mines that also produce