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Released July 27, 2017 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Freeport-McMoRan Incorporated (NYSE:FCX) (Phoenix, Arizona) is cutting back on its global production outlook for 2017, but expects that a much-needed rise in copper prices will mitigate much of the effects from lower volumes. The mining giant already is seeing positive results from higher prices, posting a $268 million profit in second-quarter 2017, compared with a $479 million loss in the same period last year. Industrial Info is tracking more than $2.6 billion in active projects involving Freeport, including major copper projects in Indonesia, Africa and the U.S.
Freeport-McMoRan revised much of its full-year production guidance downward from its predictions made in the previous quarter: It now expects to mine 3.7 billion pounds of copper, as opposed to the previous prediction of 3.9 billion pounds, and 1.6 million ounces of gold, down from 1.9 million ounces. Molybdenum remained unchanged at 93 million pounds. Much of the decline has been attributed to labor disputes at the Grasberg Mine in Indonesia, which have followed similar disputes seen by other mining companies in Asia and South America.
Miners at Grasberg currently are on strike, following a decision in which Freeport slashed 10% of its Indonesian work force to reduce costs. About 5,000 workers recently extended the strike for another week, according to Jakarta Times. Ironically, such worker-related issues have contributed to supply-side concerns that have only pushed the price of copper prices to a five-month high earlier this week, according to MarketWatch, which helped to offset much of Freeport's concerns about volumes. Stronger growth in Europe and Asia, particularly China, have been another driving factor behind stronger copper prices.
The Grasberg Mine is expected to provide copper feedstock to Freeport's proposed, $2.3 billion copper smelter in Gresik, Indonesia. The facility is expected to process 1.6 million tons per year of copper concentrates into 400,000 tons per year of copper cathodes, which are used to produce copper rods for the wire and cable industry. For more information, see Industrial Info's project report.
Chief Executive Officer Richard Adkerson's expressed confidence in a quarterly earnings conference call that his company would secure a new mining agreement by October for Grasberg mine, the world's second-largest copper mine. Indonesia is seeking 51% ownership of the mine, while Freeport wants the government's share to stay at the current 30%. But Adkerson warned that without a long-term permit, Freeport could withhold $700 million and $750 million budgeted in 2017 and 2018, respectively, on a major underground mine development planned for Grasberg.
Freeport also is weighing its options for a proposed, $50 million mine and concentrator addition at the Kisanfu Copper Mine in Democratic Republic of Congo. Phelps Dodge Congo SPRL, a subsidiary of Freeport, is considering a 2 million-ton-per-year, open-pit mine, which would include a 4,000-ton-per-day separation plant. For more information, see Industrial Info's project report.
It was as late as last year when weak commodity prices were forcing many mining companies to sell off copper and other assets to balance their books. Freeport had been planning to sell the Kisanfu Mine to China Molybdenum Company Limited (CMOC) in an effort to divest from its cobalt assets, but talks proved fruitless; CMOC had an exclusive right to negotiate for the assets, but that exclusivity period ended in February, according to Reuters. Earlier this year, CMOC agreed to pay $2.65 billion for Freeport's stake in Congo's Tenke Fungurume Mine, one of the world's largest copper deposits, according to Reuters.
In the U.S., Freeport is considering a $150 million sulfuric plant addition at the Safford Copper Mine in Safford, Arizona. As currently envisioned, the company would construct a second, 1,300-ton-per-day sulfuric acid plant at the 103,000-ton-per-day mine, to provide acid for leaching pads and waste heat from sulfur burner. For more information, see Industrial Info's project report.
The Safford facility also could be the site of a future mining project. Adkerson explained: "As the Safford mine is depleting from the oxide minerals that we have there, we're pointing toward a plan of producing oxide from the [nearby] Lone Star [ore] deposit, which would make use of these facilities that we have available, and also serve to expose a very large sulfide resource at Lone Star that underlies the oxide ore body. Using existing infrastructure, this project would be relatively easy."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
Freeport-McMoRan revised much of its full-year production guidance downward from its predictions made in the previous quarter: It now expects to mine 3.7 billion pounds of copper, as opposed to the previous prediction of 3.9 billion pounds, and 1.6 million ounces of gold, down from 1.9 million ounces. Molybdenum remained unchanged at 93 million pounds. Much of the decline has been attributed to labor disputes at the Grasberg Mine in Indonesia, which have followed similar disputes seen by other mining companies in Asia and South America.
Miners at Grasberg currently are on strike, following a decision in which Freeport slashed 10% of its Indonesian work force to reduce costs. About 5,000 workers recently extended the strike for another week, according to Jakarta Times. Ironically, such worker-related issues have contributed to supply-side concerns that have only pushed the price of copper prices to a five-month high earlier this week, according to MarketWatch, which helped to offset much of Freeport's concerns about volumes. Stronger growth in Europe and Asia, particularly China, have been another driving factor behind stronger copper prices.
The Grasberg Mine is expected to provide copper feedstock to Freeport's proposed, $2.3 billion copper smelter in Gresik, Indonesia. The facility is expected to process 1.6 million tons per year of copper concentrates into 400,000 tons per year of copper cathodes, which are used to produce copper rods for the wire and cable industry. For more information, see Industrial Info's project report.
Chief Executive Officer Richard Adkerson's expressed confidence in a quarterly earnings conference call that his company would secure a new mining agreement by October for Grasberg mine, the world's second-largest copper mine. Indonesia is seeking 51% ownership of the mine, while Freeport wants the government's share to stay at the current 30%. But Adkerson warned that without a long-term permit, Freeport could withhold $700 million and $750 million budgeted in 2017 and 2018, respectively, on a major underground mine development planned for Grasberg.
Freeport also is weighing its options for a proposed, $50 million mine and concentrator addition at the Kisanfu Copper Mine in Democratic Republic of Congo. Phelps Dodge Congo SPRL, a subsidiary of Freeport, is considering a 2 million-ton-per-year, open-pit mine, which would include a 4,000-ton-per-day separation plant. For more information, see Industrial Info's project report.
It was as late as last year when weak commodity prices were forcing many mining companies to sell off copper and other assets to balance their books. Freeport had been planning to sell the Kisanfu Mine to China Molybdenum Company Limited (CMOC) in an effort to divest from its cobalt assets, but talks proved fruitless; CMOC had an exclusive right to negotiate for the assets, but that exclusivity period ended in February, according to Reuters. Earlier this year, CMOC agreed to pay $2.65 billion for Freeport's stake in Congo's Tenke Fungurume Mine, one of the world's largest copper deposits, according to Reuters.
In the U.S., Freeport is considering a $150 million sulfuric plant addition at the Safford Copper Mine in Safford, Arizona. As currently envisioned, the company would construct a second, 1,300-ton-per-day sulfuric acid plant at the 103,000-ton-per-day mine, to provide acid for leaching pads and waste heat from sulfur burner. For more information, see Industrial Info's project report.
The Safford facility also could be the site of a future mining project. Adkerson explained: "As the Safford mine is depleting from the oxide minerals that we have there, we're pointing toward a plan of producing oxide from the [nearby] Lone Star [ore] deposit, which would make use of these facilities that we have available, and also serve to expose a very large sulfide resource at Lone Star that underlies the oxide ore body. Using existing infrastructure, this project would be relatively easy."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
