Freeport McMoRan Copper and Gold Inc.

Published : January 30th, 2016

Why the Grasberg Mine Is Crucial for Freeport-McMoRan’s 2016 Plans

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Keywords :   Copper | Georgia | Gold | Indonesia | Lead | Market | Mines | Mongolia |

Why the Grasberg Mine Is Crucial for Freeport-McMoRan’s 2016 Plans

Freeport-McMoRan Stock Whipsawed after 4Q15 Earnings Release

(Continued from Prior Part)

Grasberg mine

Previously, we’ve seen that Freeport-McMoRan (FCX) expects its copper unit cash costs to fall steeply in 2016. Freeport-McMoRan owns the Grasberg mine in Indonesia (EIDO), and Rio Tinto (RIO) is Freeport’s partner in this mine.

Rio Tinto also owns the Oyo Tolgoi mine in Mongolia through its subsidiary Turquoise Hill Resources (TRQ). In this part of the series, we’ll explore why the Grasberg mine is so critical for Freeport’s 2016 operating plans.

2016 unit cash costs

The graph above shows Freeport’s 2016 unit cash costs guidance. In 2016, Freeport expects its copper unit cash costs to fall across all its mines expect for those in Africa. The company expects its unit cash costs to average $1.49 per pound in North America and $1.50 per pound in South America (ILF) this year. On a consolidated basis, Freeport expects copper unit cash costs to fall to $1.10 per pound in 2016 from $1.53 per pound last year.

However, most of the expected reduction in unit cash costs seem to be coming from the Grasberg mine, where Freeport expects unit cash costs after by-product credits to average only $0.17 per pound—down from $1.09 per pound in 2015. This 84% reduction in unit cash costs at the Grasberg mine is expected to help Freeport reduce its consolidated unit cash costs.

More gold

Freeport-McMoRan expects to produce more gold in 2016 from the Grasberg mine as it completes the open pit operations. This will lead to higher by-product credits and hence drive down the unit production costs. The Grasberg mine will need to be converted into an underground mine in the next two years.

However, Freeport must sign an agreement with the Indonesian government to extend its mining contract. In the next part of this series, we’ll discuss what the company’s management had to say about the progress in their talks with the Indonesian government.

Continue to Next Part

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Data and Statistics for these countries : Georgia | Indonesia | Mongolia | All
Gold and Silver Prices for these countries : Georgia | Indonesia | Mongolia | All

Freeport McMoRan Copper and Gold Inc.

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CODE : FCX
ISIN : US35671D8570
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Freeport McMoran is a producing gold and copper company based in United states of america.

Freeport McMoran produces gold, copper, cobalt, molybdenum and silver in Chile, in Congo Dem. Rep. of, in Indonesia and in Peru, develops copper in Peru, and holds various exploration projects in Chile.

Its main assets in production are CANDELARIA, EL ABRA, CHINO - MILL, HENDERSON, MIAMI - ROM LEACH, MORENCI - MILL, OJOS DEL SALADO, MORENCI and MORENCI - ROM LEACH in Chile, GRASBERG, SIERRITA and BAGDAD in Indonesia, TENKE FUNGURUME and TYRONE in Congo Dem. Rep. of and CERRO VERDE in Peru, its main asset in development is SAFFORD in Peru and its main exploration properties are BAGDAD - ROM LEACH and CHINO - ROM LEACH in Peru and CERRO VERDE - MILL, CERRO VERDE - CRUSHED LEACH, CERRO VERDE - ROM LEACH, EL ABRA - ROM LEACH and CLIMAX in Chile.

Freeport McMoran is listed in Germany and in United States of America. Its market capitalisation is US$ 15.2 billions as of today (€ 13.8 billions).

Its stock quote reached its lowest recent point on December 21, 2018 at US$ 10.00, and its highest recent level on September 20, 2019 at US$ 10.47.

Freeport McMoran has 1 448 000 000 shares outstanding.

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NYSE (FCX)FRANKFURT (FPMB.F)
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