Freeport-McMoRan 2005 Annual Report Download - page 10

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Leadership
PT฀Freeport฀Indonesia’s฀Grasberg฀complex฀is฀one฀of฀the฀world’s฀
richest฀ore฀bodies.฀Effectively฀managing฀a฀world-class฀operation฀in฀
one฀of฀the฀world’s฀most฀remote฀locations฀requires฀a฀highly฀skilled฀
team฀and฀an฀organizational฀culture฀of฀dedication฀and฀achievement.฀
Our฀team฀took฀important฀steps฀following฀the฀2003฀slippage฀events฀
to฀return฀safely฀to฀full฀mining฀operations฀at฀Grasberg,฀accessing฀
exceptionally฀high-grade฀ore฀during฀2005.฀As฀a฀result,฀we฀achieved฀
significantly฀higher฀production฀and฀sales฀at฀our฀Grasberg฀complex฀
in฀2005,฀reflecting฀higher฀ore฀grades฀and฀milling฀rates฀than฀in฀2004.฀
Sales฀totaled฀1.46฀billion฀pounds฀of฀copper฀and฀a฀record฀2.8฀million฀
ounces฀of฀gold฀in฀2005,฀compared฀with฀sales฀of฀1.0฀billion฀pounds฀of฀
copper฀and฀1.4฀million฀ounces฀of฀gold฀in฀2004.
PT฀Freeport฀Indonesia’s฀unit฀net฀cash฀costs,฀including฀gold฀and฀
silver฀credits,฀averaged฀$0.07฀per฀pound฀of฀copper฀in฀2005,฀compared฀
with฀$0.40฀per฀pound฀for฀2004.฀Unit฀site฀production฀and฀delivery฀
costs฀for฀the฀year฀benefited฀from฀higher฀volumes,฀as฀we฀and฀other฀
industry฀participants฀continue฀to฀be฀challenged฀by฀the฀effects฀of฀
higher฀energy฀costs,฀labor฀costs฀and฀other฀input฀factors.฀
Our฀mill฀processed฀an฀average฀of฀216,200฀metric฀tons฀of฀ore฀per฀
day฀in฀2005,฀compared฀with฀185,100฀metric฀tons฀of฀ore฀per฀day฀in฀the฀
previous฀year.฀Mill฀rates฀will฀vary฀during฀2006฀depending฀on฀ore฀types฀
mined฀and฀are฀expected฀to฀average฀in฀excess฀of฀220,000฀metric฀tons฀
of฀ore฀per฀day฀for฀the฀year.฀
Copper฀grades฀averaged฀1.13฀percent฀in฀2005,฀compared฀with฀0.87฀
percent฀in฀2004.฀Gold฀ore฀grades฀averaged฀1.65฀grams฀per฀metric฀ton,฀
compared฀with฀0.88฀grams฀per฀metric฀ton฀in฀the฀previous฀year.฀
Production฀from฀the฀Deep฀Ore฀Zone฀(DOZ)฀underground฀mine฀
averaged฀42,000฀metric฀tons฀of฀ore฀per฀day฀in฀2005,฀representing฀19฀
percent฀of฀our฀mill฀throughput฀as฀the฀underground฀operation฀
continued฀to฀perform฀above฀design฀capacity฀of฀35,000฀metric฀tons฀of฀
ore฀per฀day.฀PT฀Freeport฀Indonesia฀is฀expanding฀the฀capacity
of฀the฀DOZ฀operation฀to฀a฀sustained฀rate฀of฀50,000฀metric฀tons฀of฀
ore฀per฀day฀with฀the฀installation฀of฀a฀second฀crusher฀and฀additional฀
ventilation,฀expected฀to฀be฀completed฀in฀2007.฀The฀DOZ฀mine,
Annual Copper &
Gold Sales
1,500
3,000
0504
Cu in millions of pounds
Au in thousands of ounces
$0.20
$0.40
$0.60
$0.80
$1.00
0504030201009998
Unit Net Cash Costs (Credits)
per pound of copper
Operations Overview
8 | FREEPORT-McMoRan COPPER & GOLD INC. OPERATIONS OVERVIEW