Freeport-McMoRan president and chief executive officer Richard Adkerson said expansion projects under way at several Freeport-McMoRan copper mines around the world hold the potential to add 1 billion lbs of incremental production for the company.
Adkerson, discussing the company’s second-quarter earnings, said Freeport-McMoRan has returned its existing copper mines to levels of production prior to the 2008 global financial crisis. Platts reported.
Output should only grow in the next few years as expansion projects come to fruition at several mines, including Morenci in Arizona; Grasberg in Indonesia; Cerro Verde in Peru, and Tenke Fungurume in Africa, he said.
“We hope to add 225 million lbs of copper annually [at Morenci],” once a current expansion is in full production in 2014, he said. And he hinted at more ambitious plans for the openpit operation, saying: “We’re really excited about a much larger expansion down the road at Morenci.”
Freeport-McMoran began construction on Tenke Fungurume, in the Katanga province in the Democratic Republic of Congo, in 2008, completing it 15 months later. Production at the mine “is going in a reasonable way,” Adkerson said, adding: At Grasberg, he said: “We are actively engaged in developing our underground resources.”
Meanwhile, an expansion at Cerro Verde "is going very well."
Exploration is the lifeblood of a copper miner, and this year Freeport-McMoRan plans to spend $275 million, half in North and South America, to prove up additional reserves. In the past five years, he said, the company has added 46 billion lb of copper reserves.
In general remarks, Adkerson said current copper markets “certainly reflect the global economy. Despite that, inventories have dropped globally and in many places, even in Europe, copper demand remain relatively tight.”
“With all the negative comments about the world economic situation, to have copper at $3.50/lb is notable, and the outlook is very positive,” he said.
Adkerson said that while Freeport-McMoran's growth strategy is not built on acquisitions or major greenfield development, “acquisitions are not off the table ... We’re always looking at opportunities.” But the company, he said, also is “fortunate that we’re not pushed to do anything.”