| Will Freeport-McMoRan’s Growth Projects Pay Off? | |
| | |
|
Freeport-McMoRan’s 2Q15 Earnings: An Investor's Guide (Continued from Prior Part) Freeport-McMoRan’s debt situation
Previously, we looked at Freeport-McMoRan’s (FCX) precarious debt situation. The company has generated negative free cash flow for five consecutive quarters. The negative free cash flows are partially due to falling commodity prices, which have negatively impacted Freeport’s earnings.
Another factor contributing to Freeport’s negative free cash flow is the massive capital expenditure (capex) Freeport is incurring.
Capital expenditure
The above graph shows Freeport’s capex over the last few quarters. Freeport has reduced its capex budget for 2015, but it’s still quite substantial. Freeport has a capex budget of $6.3 billion in 2015. It expects to spend $3.5 billion on mining projects and $2.8 billion in the oil and gas business.
Major growth projects
Expansion of the Cerro Verde mill is a major growth project Freeport is pursuing. Freeport owns a 53.56% stake in Cerro Verde, which is located in Peru (ILF). The total project cost for this expansion is $4.6 billion. Freeport has already incurred $3.9 billion in costs.
The Cerro Verde project, which is ~87% complete, is expected to come online later in 2015. It’s expected to become the world’s largest copper concentration capacity. Freeport expects incremental annual production of 600 million pounds of copper and 15 million pounds of molybdenum after the completion of the project.
Freeport is also expected to invest $15 billion in its Grasberg mine in Indonesia (EIDO). However, this will only happen if Freeport is able to sign a long-term agreement with the Indonesian government. Rio Tinto (RIO) is Freeport’s partner in the Grasberg mine.
Newmont Mining (NEM) and Freeport are the leading copper producers in Indonesia.
In the next part, we’ll look at Freeport’s oil and gas projects.
Continue to Next Part Browse this series on Market Realist:
|
|
|
Freeport McMoRan Copper and Gold Inc.
|
|
PRODUCER |
CODE : FCX |
ISIN : US35671D8570 |
|
| |
ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
Freeport McMoran is a gold and copper producing company based in United states of america. Freeport McMoran produces gold, copper, cobalt, molybdenum and silver in Chile, in Congo Dem. Rep. of, in Indonesia and in Peru, develops copper in Peru, and holds various exploration projects in Chile. Its main assets in production are CANDELARIA, EL ABRA, CHINO - MILL, HENDERSON, MIAMI - ROM LEACH, MORENCI - MILL, OJOS DEL SALADO, MORENCI and MORENCI - ROM LEACH in Chile, GRASBERG, SIERRITA and BAGDAD in Indonesia, TENKE FUNGURUME and TYRONE in Congo Dem. Rep. of and CERRO VERDE in Peru, its main asset in development is SAFFORD in Peru and its main exploration properties are BAGDAD - ROM LEACH and CHINO - ROM LEACH in Peru and CERRO VERDE - MILL, CERRO VERDE - CRUSHED LEACH, CERRO VERDE - ROM LEACH, EL ABRA - ROM LEACH and CLIMAX in Chile. Freeport McMoran is listed in Germany and in United States of America. Its market capitalisation is US$ 69.9 billions as of today (€ 65.3 billions). Its stock quote reached its lowest recent point on March 06, 2020 at US$ 10.00, and its highest recent level on April 24, 2024 at US$ 48.31. Freeport McMoran has 1 448 000 000 shares outstanding. |