TORONTO (miningweekly.com) – Freeport-McMoRan Copper & Gold is still “aggressively” looking to increase production from its operations, to take advantage of what CEO Richard Adkerson said is a “very positive” outlook for copper.
Speaking on a conference call on Wednesday, Adkerson said the company will consider acquisition opportunities and closely monitor the activites of other industry players, but that the focus is heavily on developing its own projects.
“We are positioned so that if an attractive acquisition came to us, we are financially and technically available and prepared to take advantage of it,” he said.
“(But) we don't expect it, it's not part of our strategy, and if it did come to us it would have to be an extraordinary opportunity.”
Shares in Freeport, which is the biggest publicly traded copper miner, rose three percent on Wednesday, after the company said that first quarter sales were higher than forecast and raised its guidance for the full year. The firm also announced it would pay a supplemental dividend.
Freeport cut back sharply on production – especially at higher-cost mines in the US – when demand and prices fell in late 2008, and Adkerson was reluctant to bring production back on line last year until he was certain that demand growth was sustainable.
But the Phoenix, Arizona-based company is now pushing hard to ramp up production, and also has a long list of projects being implemented, planned or considered.
In North America, Freeport has restarted its Morenci mine and is achieving targeted throughputs. The company is looking at increasing the mining rate further and is also studying a mill expansion to increase production.
Restarts at both the Miami and Chino mines are also on schedule, Adkerson said.
In Chile, the firm started production in the first quarter from the new sulphides project at its El Abra mine, and continues to study milling capacity expansions at the operation.
Still in South America, the company will complete a feasibility study by mid-year on a large-scale concentrator expansion at the Cerro Verde mine in Peru, followed by the filing of an environmental impact assessment in the second half.
Freeport has been saying for some time that it is looking at either doubling or tripling capacity at Cerro Verde, and Adkerson indicated on Wednesday the company is now focused on a project that would triple mill throughput to 360 000 t/d.
“This will be one of the world's largest concentrator operations at this level of expansion,” he said.
The company also continues to invest in its big Grasberg operation in Indonesia.
Overall, capital spending this year is forecast at $2,5-billion in 2011 and $2,1-billion for 2012, although the numbers may be revised upwards as the company approves new projects.
“We expect our capital spending beyond 2011 will increase above our previous guidance as we get board approval for the Cerro Verde expansion and other projects," Adkerson said.
The company has yet to approve the start-up of its Climax molybdenum project, although construction is continuing and will likely be completed in early 2012.
Freeport is one of the biggest producers of molybdenum, which is used to strengthen steel in steel pipes and drills and other extreme high- or low-temperature applications, and to prevent corrosion.
At the Tenke Fungurume copper/cobalt mine in the Democratic Republic of Congo (DRC), Freeport is “actively” studying an expansion that would add about 150-million pounds a year of copper over the next couple of years, and engineering and exploration work aimed at further, larger expansions is also ongoing.
The company has already added mining equipment to take advantage of the fact that the mill, which was designed at 8 000 t/d, is operating well above that at close to 11 000 t/d.
“We'll have further opportunities for the available oxide ore. And we are looking at alternatives for processing the very large amounts of mixed ore and what appears to be a really large sulphide resource there, to provide us the long-term opportunities,” Adkerson said.
Earlier this week, DRC President Joseph Kabila formalised a new contract agreement for Tenke Fungurume, in which Freeport now owns 56%, partner Lundin Mining holds 24% and DRC government-owned Gecames owns the other 20%.
One of the options being considered for Tenke is the construction of a cobalt refinery, Adkerson said on Wednesday.
If it went ahead, the project could cost in the ballpark of $150-million to $200-million, he estimated.
Edited by: Creamer Media Reporter