Freeport-McMoRan 2011 Annual Report Download - page 46

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44 | FREEPORT-McMoRan COPPER & GOLD INC.
Operating Data. Following is summary operating data for our
Africa mining operations for the years ended December 31.
2011 2010 2009
a
Copper (millions of recoverable pounds)
Production 281 265 154
Sales 283 262 130
Average realized price per pound
b
$ 3.74 $ 3.45 $ 2.85
Cobalt (millions of recoverable pounds)
Production 25 20 N/A
c
Sales 25 20 N/A
c
Average realized price per pound $ 9.99 $ 10.95 N/A
c
Ore milled (metric tons per day) 11,100 10,300 7,300
Average ore grade (percent):
Copper 3.41 3.51 3.69
C obalt 0.40 0.40 N/A
c
Copper recovery rate (percent) 92.5 91.4 92.1
a.
Results for 2009 represent mining operations that began production in March 2009.
b.
Includes adjustments for point-of-sale transportation costs as negotiated in customer
contracts.
c.
Comparative results for the 2009 period have not been included as start-up activities were
still under way.
2011 compared with 2010. Copper sales volumes from our Africa
mining operations increased to 283 million pounds of copper in
2011, compared with 262 million pounds of copper in 2010,
primarily reecting higher production in 2011.
Consolidated sales volumes from our Africa mining operations
are expected to approximate 290 million pounds of copper and
25 million pounds of cobalt in 2012.
2010 compared with 2009. Copper sales volumes from our
Africa mining operations increased to 262 million pounds of copper
in 2010, compared with 130 million pounds of copper in 2009,
reecting higher operating rates and a full year of production
in 2010.
Unit Net Cash Costs. Unit net cash costs per pound of copper is a
measure intended to provide investors with information about
the cash-generating capacity of our mining operations expressed
on a basis relating to the primary metal product for our
respective operations. We use this measure for the same purpose
and for monitoring operating performance by our mining
operations. is information diers from measures of performance
determined in accordance with U.S. GAAP and should not be
considered in isolation or as a substitute for measures of
performance determined in accordance with U.S. GAAP. is
measure is presented by other mining companies, although our
measure may not be comparable to similarly titled measures
reported by other companies.
Gross Profit per Pound of Copper and Cobalt. e following
table summarizes the unit net cash costs and gross prot per pound
of copper and cobalt at our Africa mining operations for the
years ended December 31. Comparative information for the 2009
period has not been included as start-up activities were still
under way. Refer to “Production Revenues and Production Costs”
for an explanation of “by-product” and “co-product” methods
and a reconciliation of unit net cash costs to production and
delivery costs applicable to sales reported in our consolidated
nancial statements.
2011 2010
By-Product Co-Product Method By-Product
Co-Product Method
Method Copper Cobalt Method Copper Cobalt
Revenues, excluding adjustments
a
$ 3.74 $ 3.74 $ 9.99 $ 3.45 $ 3.45 $ 10.95
Site production and delivery, before net noncash
and other costs shown below 1.57 1.39 5.58 1.40 1.23 5.78
Cobalt credits
b
(0.58) — — (0.58) — —
Royalty on metals 0.08 0.07 0.16 0.08 0.06 0.19
Unit net cash costs 1.07 1.46 5.74 0.90 1.29 5.97
Depreciation, depletion and amortization 0.50 0.42 0.78 0.49 0.41 1.03
Noncash and other costs, net 0.16 0.14 0.25 0.11 0.10 0.23
Total unit costs 1.73 2.02 6.77 1.50 1.80 7.23
Revenue adjustments, primarily for pricing on
prior period open sales — — 0.06 — — 0.18
Other non-inventoriable costs (0.04) (0.04) (0.07) (0.08) (0.07) (0.16)
Gross profit per pound $ 1.97 $ 1.68 $ 3.21 $ 1.87 $ 1.58 $ 3.74
Copper sales (millions of recoverable pounds) 283 283 262 262
Cobalt sales (millions of contained pounds) 25 20
a. Includes adjustments for point-of-sale transportation costs as negotiated in customer contracts.
b. Net of cobalt downstream processing and freight costs.
MANAGEMENT’S DISCUSSION AND ANALYSIS