Freeport-McMoRan 2012 Annual Report Download - page 10

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NORTH AMERICA
FCX leads the North America metals industry in the production
of copper and molybdenum. In North America, FCX currently
operates seven copper mines — Morenci, Bagdad, Sierrita, Safford
and Miami in Arizona, Tyrone and Chino in New Mexico, and
two molybdenum mines — Henderson and Climax in Colorado.
Certain of FCX’s North America copper mines (Sierrita, Bagdad,
Morenci and Chino) also produce molybdenum concentrates.
FCX has completed projects to increase production at the North
America copper mines, including restarting certain mining and
milling operations and increasing mining rates at Morenci and
Chino. Ramp up activities at Chino are continuing, with annual
production of approximately 250 million pounds of copper targeted
in 2014. FCX is also engaged in a project to advance mining and
milling capacity at Morenci, which targets incremental annual
production of approximately 225 million pounds of copper in 2014.
In May 2012, the Climax molybdenum mine began commercial
operations. FCX intends to operate the Climax and Henderson
molybdenum mines in a flexible manner to meet market requirements.
North America’s consolidated copper sales totaled 1.35 billion pounds
at an average realized price of $3.64 per pound in 2012, compared to
1.25 billion pounds at an average realized price of $3.99 per pound in
2011. Consolidated molybdenum sales totaled 83 million pounds in
2012, compared to 79 million pounds in 2011. FCX expects 2013 copper
sales from North America to increase to approximately 1.45 billion
pounds (primarily reflecting higher production at Morenci and Chino)
and molybdenum sales to increase to approximately 90 million pounds
(primarily reflecting increased production from Climax).
0.75
1.50
1.25
1.00
0.50
0.25
NORTH AMERICA COPPER SALES
in billion lbs
NORTH AMERICA MOLYBDENUM SALES*
in billion lbs
100
60
80
40
20
* Include sales of molybdenum produced at FCX’s North and
South America copper mines.
2012 2013e*
Cash Unit Costs
Site Production & Delivery $ 1.91 $ 1.98
By-product Credits (0.36) (0.26)
Treatment Charges 0.12 0.10
Unit Net Cash Costs $ 1.67 $ 1.82
NORTH AMERICA UNIT CASH COSTS
per lb of copper
NORTH AMERICA COPPER RESERVES BY MINE
38.8 billion consolidated lbs
34%
Morenci
31%
Sierrita
21%
Bagdad
14%
Other *
* Includes copper reserves from Chino, Safford, Tyrone, Miami and Cobre.
OPERATIONAL OVERVIEW
Photo: New mill construction, Morenci, Arizona
2012
2012
2013e
2013e
* Estimates assume an average price of $11/lb for
molybdenum for 2013. Unit net cash costs for 2013 would
change by approximately $0.04/lb for each $2/lb change in
the average price of molybdenum.
8