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FREEPORT-McMoRan COPPER & GOLD INC. 2010 Annual Report
13
Indonesia
FCX mines the world’s largest single reserve of both copper and gold through its
subsidiary, PT Freeport Indonesia, in the Grasberg minerals district in Papua, Indonesia.
PT Freeport Indonesia is pursuing several capital projects in the Grasberg minerals
district, including development of the large-scale, high-grade underground ore bodies
located beneath and nearby the Grasberg open pit, which is scheduled to be depleted in
2016. These projects include continued development of the Common Infrastructure
project, the Grasberg Block Cave, the Big Gossan underground mine and the Deep Mill
Level Zone underground mine. We will continue to benefit from the efficiencies of
large-scale operations once the underground mines reach full rates.
For 2010, consolidated sales from FCX’s Indonesia operations totaled 1.2 billion
pounds of copper at an average realized price of $3.69 per pound and 1.8 million
ounces of gold at an average realized price of $1,271 per ounce. For 2009,
consolidated sales totaled 1.4 billion pounds of copper at an average realized price of
$2.65 per pound and 2.5 million ounces of gold at an average realized price of
$994 per ounce. Lower copper and gold sales volumes in 2010 primarily reflected
mining in a lower grade section of the Grasberg open pit. FCX expects Indonesia sales
to approximate 1.0 billion pounds of copper and 1.3 million ounces of gold in 2011,
as production transitions to a lower grade section of the Grasberg open pit.
Operational Overview
2010 2011e
Cash Unit Costs (1)
Site Production & Delivery $ 1.53 $ 2.08
By-product Credits (1.92) (1.81)
Treatment Charges 0.22 0.17
Royalties 0.13 0.16
Unit Net Cash (Credits) Costs $ (0.04) $ 0.60
(1) Estimates assume average prices of $4.25/lb for copper and $1,350/oz for gold for 2011. Quarterly unit costs will vary significantly with
quarterly metal sales volumes.
Unit net cash costs for 2011 would change by approximately $0.065/lb for each $50/oz change in gold.
Note: e=estimate.
Indonesia Unit Production Costs
per lb of copper
Indonesia Copper
Reserves by Mine
32.7 billion
consolidated lbs
89% Underground
11% Open Pit
Indonesia
Copper Sales
in billion lbs
2011e2010
0.75
1.25
1.00
0.50
0.25
Indonesia
Gold Sales
in million ozs
2011e2010
1.0
2.0
1.5
0.5