Freeport-McMoRan 2006 Annual Report Download - page 10

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The success of the development of the DOZ mine,
already one of the world’s largest underground mines,
provides confidence in the future development of
PT Freeport Indonesia’s large-scale undeveloped ore bodies.
Mill throughput, which varies depending on ore types being
processed, averaged 229,400 metric tons of ore in 2006,
compared with 216,200 metric tons of ore in 2005. Mill rates
will vary during 2007 depending on ore types mined and are
expected to average in excess of 210,000 metric tons of ore
per day for the year.
Copper ore grades averaged 0.85 percent and recovery rates
averaged 86.1 percent, compared with 1.13 percent and
89.2 percent in 2005. Gold ore grades averaged 0.85 grams per
metric ton and recovery rates averaged 80.9 percent in 2006,
compared with 1.65 grams per metric ton and 83.1 percent in
2005. The 2006 ore grades and recoveries for copper and gold
reflect the mining of lower grade material compared with the
extraordinarily high grades mined in 2005. Average annual copper
and gold ore grades for 2007 are projected to approximate the
2006 ore grades with higher grades projected in the first half of
2007 than in the second half because of mine sequencing.
PT Freeport Indonesia’s unit net cash costs, including gold and
silver credits, averaged $0.60 in 2006, compared with $0.07
per pound of copper in 2005. Unit site production and delivery
costs for the year were primarily impacted by lower volumes,
higher input costs (including energy) and the adoption of new
accounting guidance for recognizing stripping costs as incurred.
Treatment charges were also higher because of higher market
rates and higher copper prices, and royalties also increased as
a result of prices.
The DOZ mine is
one of the world’s
largest underground
mines. Our success in
block caving is important
for the development of our
future underground reserves.
25,000
50,000
06050402 0300 01
DOZ Underground Mine
thousands of metric tons per day
ActualOriginal 1998 Feasibility
8FREEPORT-McMoRan COPPER & GOLD INC. 2006 Annual Report