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FREEPORT-McMoRan COPPER & GOLD INC. 2010 Annual Report
9
North America
FCX leads the metals industry in North America in the production of copper and
molybdenum. FCX operates seven open-pit copper mines in the United States
(Morenci, Sierrita, Bagdad, Safford and Miami in Arizona, and Tyrone and Chino
in New Mexico). FCX conducts molybdenum mining operations at the Henderson
underground mine in Colorado. Molybdenum is also produced by FCX’s Sierrita and
Bagdad mines.
FCX has restarted the Morenci mill to process available sulfide material currently
being mined and has commenced a staged ramp-up of the mining rate at the Morenci
mine. These activities at Morenci are expected to enable copper production to
increase by approximately 125 million pounds per year. Additionally, FCX is evaluating
further increases to Morenci’s mining rate and the potential of a new mill at Morenci.
FCX has also initiated limited mining activities at the Miami mine and has initiated
a restart of mining and milling activities at the Chino mine.
Construction activities at the Climax molybdenum mine are ongoing; FCX plans to
advance construction and conduct mine preparation activities during 2011. The
timing for start-up of mining and milling activities is dependent on market conditions.
FCX believes that this project is one of the most attractive primary molybdenum
development projects in the world, with large-scale production capacity, attractive
cash costs and future growth options.
Consolidated copper sales in North America totaled 1.1 billion pounds in 2010,
compared to 1.2 billion pounds in 2009. Consolidated molybdenum sales totaled
67 million pounds in 2010, compared to 58 million pounds in 2009. FCX expects
2011 sales from North America copper mines to approximate 1.2 billion pounds of
copper, which reflects increased mining and milling rates at the Morenci mine, and
molybdenum sales to approximate 70 million pounds.
Operational Overview
2010 2011e
Cash Unit Costs (1)
Site Production & Delivery $ 1.50 $ 1.73
By-product Credits (0.35) (0.44)
Treatment Charges 0.09 0.10
Unit Net Cash Costs $ 1.24 $ 1.39
(1) Estimates assume average prices of $4.25/lb for copper and $15/lb for molybdenum for 2011.
Unit net cash costs for 2011 would change by approximately $0.05/lb for each $2/lb change in molybdenum.
(2) Includes copper reserves from Safford, Miami, Tyrone, Chino and Cobre.
Note: e=estimate.
North America Unit Production Costs
per lb of copper
North America Copper
Reserves by Mine
42.2 billion
consolidated lbs
34% Morenci
29% Sierrita
20% Bagdad
17% Other (2)
North America
Copper Sales
in billion lbs
2011e2010
0.75
1.25
1.00
0.50
0.25
Molybdenum Sales+
in million lbs
2011e2010
40
80
60
20
+ Includes sales of
molybdenum produced
at FCX’s North and
South America copper
mines.