Freeport-McMoRan 2012 Annual Report Download - page 12

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SOUTH AMERICA
FCX operates four copper mines in South America — Cerro Verde in
Peru, and El Abra, Candelaria and Ojos del Salado in Chile. In addition to
copper, the Cerro Verde mine also produces molybdenum concentrates,
and the Candelaria and Ojos del Salado mines produce gold and silver.
FCX is engaged in a large-scale expansion project at Cerro Verde
that would expand the concentrator facilities from the current rate of
120,000 metric tons of ore per day to 360,000 metric tons of ore per
day and provide incremental annual production of approximately
600 million pounds of copper and 15 million pounds of molybdenum
beginning in 2016. FCX commenced construction on this project in the
first quarter of 2013.
FCX is also engaged in pre-feasibility studies for a potential large-scale
milling operation at El Abra to process additional sulfide material and
to achieve higher recoveries.
South America’s consolidated copper sales totaled 1.25 billion pounds
at an average realized price of $3.58 per pound in 2012, compared to
1.32 billion pounds at an average realized price of $3.77 per pound in
2011. Lower copper sales volumes in 2012 primarily reflected lower
ore grades at Candelaria and Cerro Verde, partly offset by higher
mining rates and ore grades at El Abra. FCX expects 2013 sales from
South America to increase to approximately 1.33 billion pounds
of copper, primarily reflecting higher-grade ore at Candelaria.
0.75
1.50
1.25
1.00
0.50
0.25
SOUTH AMERICA COPPER SALES
in billion lbs
2012 2013e*
Cash Unit Costs
Site Production & Delivery $ 1.60 $ 1.65
By-product Credits (0.26) (0.32)
Treatment Charges 0.16 0.17
Unit Net Cash Costs $ 1.50 $ 1.50
SOUTH AMERICA UNIT CASH COSTS
per lb of copper
SOUTH AMERICA COPPER RESERVES BY MINE
38.8 billion consolidated lbs
78%
Cerro Verde
11%
Candelaria
and Ojos
del Salado
11%
El Abra
OPERATIONAL OVERVIEW
Photo: Concentrating complex, Cerro Verde, Peru
2012 2013e
* Estimates assume average prices of $1,700/oz for
gold and $11/lb for molybdenum for 2013.
10