Freeport-McMoRan 2008 Annual Report Download - page 13

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As operations commence at
the Tenke Fungurume project
in the Democratic Republic
of Congo in the second half
of 2009, exploration activities
seek to uncover additional
high-grade reserves in the
highly prospective African
copper belt.
Photo: Tenke Fungurume processing
plant, March 2009
2008 Annual Report FREEPORT-McMoRan COPPER & GOLD INC. 11
Africa
The Tenke Fungurume project located in the Katanga
province of the Democratic Republic of Congo (DRC) remains
one of the world’s most exciting minerals development and
exploration projects. FCX, as operator, holds an effective
57.75 percent interest in the copper and cobalt mining
concession.
Construction activities progressed throughout 2008, and
production for the initial project is targeted to reach designed
rates during the second half of 2009. FCX is responsible for
funding 70 percent of project development costs and is also
responsible for certain cost overruns on the initial project
with respect to its partner’s 30 percent funding responsibility.
FCX estimates remaining costs to complete the initial project
will be slightly below its previous estimate of $1.75 billion.
Annual production in the initial years of the project is expected
to approximate 250 million pounds of copper and 18 million
pounds of cobalt. The initial project is based on mining and
processing ore reserves approximating 119 million metric
tons with average ore grades of 2.6 percent copper and 0.35
percent cobalt. FCX expects the results of drilling activities
will enable significant future expansion of initial production
rates. The timing of these expansions will depend on a number
of factors, including general economic and market conditions.
Reserves
FCX’s estimated consolidated recoverable reserves at
December 31, 2008, include 102.0 billion pounds of copper, 40.0
million ounces of gold and 2.48 billion pounds of molybdenum.
Estimated recoverable reserves were determined using
long-term average prices of $1.60 per pound for copper, $550
per ounce for gold and $8.00 per pound for molybdenum.
Net additions to recoverable copper reserves totaled
approximately 12.8 billion pounds, including additions of
3.9 billion pounds at the North America mines, 7.5 billion
pounds at the Cerro Verde mine in South America and 1.6
billion pounds at the Tenke Fungurume project in the DRC.
These additions reflect positive results of drilling programs
undertaken during 2007 and 2008. The increases in reserves
replaced over 300 percent of FCX’s 2008 copper production
and 700 percent of FCX’s 2008 molybdenum production.
Sustainable Development
As one of the world’s major producers of copper, gold and
molybdenum, FCX is committed to providing these essential
metals to today’s economies in a responsible manner — from
the time of exploration to site closure and remediation. At
every community where FCX operates, FCX minimizes,
mitigates and remediates its environmental impacts. FCX
implements development initiatives globally to protect human
rights and supports social development in local communities to
provide improved healthcare, education, housing, employment
and business development opportunities. As a founding
member of the International Council on Mining and Metals
(ICMM), we endorse the ICMM Sustainable Development
Framework and 10 Sustainable Development Principles.
Our Working Toward Sustainable Development
Report, a companion document to this Annual Report,
is available via our web site www.fcx.com.