Freeport-McMoRan 2003 Annual Report Download - page 76

74 FREEPORT-McMoRan COPPER & GOLD INC. 2003 Annual Report
Through its operating subsidiaries, FCX markets its
products worldwide primarily pursuant to the terms of
long-term contracts. As a percentage of consolidated
revenues, revenues under long-term contracts totaled
approximately 95 percent in 2003 and 2002 and 91
percent in 2001. The only customer under long-term
contracts with over ten percent of revenues in at least
one of the past three years is PT Smelting with 23
percent in 2003 and 20 percent in 2002 and 2001.
FCX revenues attributable to various countries based
on the location of the customer follow (in thousands):
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2003 2002 2001
Indonesia (PT Smelting) $510,245 $391,071 $ 374,050
Japan 412,440 342,899 283,577
Spain 372,791 378,817 357,865
Switzerland 130,518 146,062 221,865
United States 45,682 125,793 146,338
Others 740,489 525,820 455,171
Total $2,212,165 $1,910,462 $1,838,866
FCX revenues attributable to the products it produces follow (in thousands):
2003 2002 2001
Copper in concentrates
a
$612,443 $599,358 $ 548,821
Gold in concentrates 685,230 546,048 544,694
Silver in concentrates 16,374 14,740 14,207
Refined copper products 576,288 532,769 548,371
Gold and silver in slimes 272,050 209,136 189,142
Royalties (26,472) (24,532) (24,302)
Sulphur and other 76,252 32,943 17,933
$2,212,165 $1,910,462 $1,838,866
a. Amounts are net of treatment and refining charges totaling $179.1 million for 2003, $215.8 million for 2002 and $200.3 million for 2001.
apart or are otherwise less adequately spaced. The
degree of assurance, although lower than that for
proven reserves, is high enough to assume continuity
between points of observation.
All of PT Freeport Indonesia’s current aggregate
(including Rio Tinto’s share) proven and probable
reserves, shown below, are located in Block A of PT
Freeport Indonesia’s Contract of Work. The initial
term of the Contract of Work covering Block A
expires at the end of 2021. PT Freeport Indonesia
can extend this term for two successive 10-year
periods, subject to the approval of the Indonesian
government, which cannot be withheld or delayed
unreasonably. PT Freeport Indonesia’s reserve
amounts reflect its estimates of the reserves that
can be recovered before the end of 2041 (the expi-
ration of the two 10-year extensions). PT Freeport
Indonesia’s current mine plan has been developed
and its operations are based on receiving the
two 10-year extensions. As a result, PT Freeport
NOTE 13. SUPPLEMENTARY MINERAL RESERVE
INFORMATION (UNAUDITED)
Proven and probable reserves were determined by the
use of mapping, drilling, sampling, assaying and eval-
uation methods generally applied in the mining indus-
try, as more fully discussed below. The term
“reserve,” as used in our reserve data presented
here, means that part of a mineral deposit which can
be economically and legally extracted or produced
at the time of the reserve determination. The term
“proven reserves” means reserves for which (a)
quantity is computed from dimensions revealed in out-
crops, trenches, workings or drill holes; (b) grade
and/or quality are computed from the result of
detailed sampling; and (c) the sites for inspection,
sampling and measurements are spaced so closely
and the geologic character is sufficiently defined that
size, shape, depth and mineral content of reserves
are well established. The term “probable reserves”
means reserves for which quantity and grade are
computed from information similar to that used for
proven reserves but the sites for sampling are farther