Freeport-McMoRan 2003 Annual Report Download - page 7

Download and view the complete annual report

Please find page 7 of the 2003 Freeport-McMoRan annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 80

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80

perform above design capacity of 35,000 metric tons
of ore per day and PT Freeport Indonesia is completing
studies to increase the capacity of the DOZ mine to
50,000 metric tons of ore per day, which would make
it one of the world’s largest underground operations.
Copper recovery rates for the full year 2003 were
89.0 percent, compared with 88.5 percent for the
2002 period. Gold was recovered at a rate of 87.3
percent for 2003, compared with 88.4 percent for
the year before.
Copper sales volumes declined 15 percent to
1.3 billion pounds in 2003 from 1.5 billion pounds in
2002 because of lower copper ore grades, production
and mill throughput. Gold sales volumes increased
eight percent to 2.5 million ounces in 2003 from
2.3 million ounces in 2002 because of higher gold
ore grades partly offset by lower mill throughput.
As a result of the mine sequencing changes at the
open pit, a portion of the higher grade ore previously
forecast to be mined in 2004 is expected to be
deferred to future periods, with the substantial majority
of the deferred ore expected to be mined in 2005.
We estimate 2004 production to be 1.0 billion pounds
of copper and 1.5 million ounces of gold, and 2005
production to be 1.5 billion pounds of copper and
2.9 million ounces of gold.
A SEMI-AUTOGENOUS
GRINDING MILL in PT Freeport
Indonesia’s concentrating
complex was a workhorse in
2003 – contributing to the
1.3 billion pounds of copper
and 2.5 million ounces of
gold produced at record low
average unit net cash costs.
Operations Overview FREEPORT-McMoRan COPPER & GOLD INC. 5
2003 Unit Cost Summary
By-Product Method Co-Product Method*
Copper Gold Silver
(¢/lb) (¢/lb) ($/oz) ($/oz)
Site Production and Delivery 48¢ 26¢ $113 $1
Gold and Silver Credits (70) – – –
Treatment Charges 18 10 42 1
Royalty on Metals 2 1 5 –
Net Cash Production
Costs (Credits) (2)¢ 37¢ $160 $2
*Note: Allocations for co-product method based on 2003 revenues.