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Released January 25, 2019 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Miner Freeport-McMoRan Incorporated (NYSE:FCX) (Phoenix, Arizona) has every reason to be optimistic about 2019 and subsequent years. At the end of 2018, the company resolved long-standing disputes with the Indonesian government involving ownership of the company's assets there. In addition, Freeport increased its reserves in the Americas by 35% and continues developing a large mine in Arizona.
In December 2018, Freeport worked out differences with the Indonesian government regarding its Grasberg copper and gold operations. Freeport is in the process of moving Grasberg from an open-pit to an underground operation, which it expects to wrap up this year. Under the new ownership structure, Freeport-McMoRan is expected to have an 81.28% economic interest in mine owner PT Freeport Indonesia, which is jointly owned by Freeport and Indonesia's state-owned mining company PT Inalum, until 2022. After 2022, Freeport will have a 48.76% ownership in the company.
In the company's conference call, Chief Executive Officer Richard Adkerson said, "I personally could not be more pleased with the outcomes of our negotiations with the Indonesian government. ... This was no easy feat in the complicated circumstances we faced, but at the end of the day, all of us are happy. We were successful in maintaining for Freeport the basic economics of this ore body... It sustains our exposure to this world-class asset: the world's second-largest copper mine and the world's largest gold mine. It's a remarkable asset and really worth all the effort that we've poured into it over the years."
Freeport will begin mining the underground structure of the mine next year, when it will begin closure and remediation of the open-pit portion. For more information, see Industrial Info's project report.
PT Freeport Indonesia also is planning to construct a copper smelter in the country. When questioned about future spending for the project, Adkerson said, "We have been spending some planning money to date; we will continue with that. Significant capital spending won't come into play until 2020, and we are now engaged in conversations about potential partners, about financing structure and how all that will be dealt with. We deferred that until we got our deal done, and now the deal is done. We're now actively pursuing that project, and you can expect updates through 2019 as we go forward." The facility would use copper from the Grasberg mine and would have an initial processing capacity of approximately 500,000 tons per year. For additional information, see Industrial Info's project report.
Freeport's other major mining project is in Arizona. Development of the Lone Star above-ground copper mine began last year. The mine is near Freeport's existing Safford mine, which is scheduled to depleted by 2021 and of which Freeport can use the processing infrastructure. Adkerson said, "We continue to drill the Lone Star ore body and resources, and really are identifying a massive new resource, which will be great for the future of our company." Lone Star is expected to support 200 million pounds per year of copper production, with a mine life of about 20 years. Fluor Corporation (NYSE:FLR) (Irving, Texas) is providing engineering, procurement and construction on the project, which is expected to be completed in the first half of 2020. For more information, see Industrial Info's project report and October 25, 2018, article - Freeport-McMoRan Sees Promise in Arizona Copper Mine.
Executives at the company said that Freeport's expected capital expenditures in 2019 will total $2.4 billion, with $1.3 billion going toward the Grasberg and Lone Star mines. While these remain the company's two major projects, Freeport is keeping an eye on continued future growth. Adkerson said, "We're going to look at other future growth opportunities from a large portfolio of reserves and resources. We have a great opportunity in Chile with our El Abra mine, and then we have a number of opportunities in U.S. mines. We're going to be evaluating them and ranking them and be prepared to go forward when markets give us the comfort to go forward."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 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.
In December 2018, Freeport worked out differences with the Indonesian government regarding its Grasberg copper and gold operations. Freeport is in the process of moving Grasberg from an open-pit to an underground operation, which it expects to wrap up this year. Under the new ownership structure, Freeport-McMoRan is expected to have an 81.28% economic interest in mine owner PT Freeport Indonesia, which is jointly owned by Freeport and Indonesia's state-owned mining company PT Inalum, until 2022. After 2022, Freeport will have a 48.76% ownership in the company.
In the company's conference call, Chief Executive Officer Richard Adkerson said, "I personally could not be more pleased with the outcomes of our negotiations with the Indonesian government. ... This was no easy feat in the complicated circumstances we faced, but at the end of the day, all of us are happy. We were successful in maintaining for Freeport the basic economics of this ore body... It sustains our exposure to this world-class asset: the world's second-largest copper mine and the world's largest gold mine. It's a remarkable asset and really worth all the effort that we've poured into it over the years."
Freeport will begin mining the underground structure of the mine next year, when it will begin closure and remediation of the open-pit portion. For more information, see Industrial Info's project report.
PT Freeport Indonesia also is planning to construct a copper smelter in the country. When questioned about future spending for the project, Adkerson said, "We have been spending some planning money to date; we will continue with that. Significant capital spending won't come into play until 2020, and we are now engaged in conversations about potential partners, about financing structure and how all that will be dealt with. We deferred that until we got our deal done, and now the deal is done. We're now actively pursuing that project, and you can expect updates through 2019 as we go forward." The facility would use copper from the Grasberg mine and would have an initial processing capacity of approximately 500,000 tons per year. For additional information, see Industrial Info's project report.
Freeport's other major mining project is in Arizona. Development of the Lone Star above-ground copper mine began last year. The mine is near Freeport's existing Safford mine, which is scheduled to depleted by 2021 and of which Freeport can use the processing infrastructure. Adkerson said, "We continue to drill the Lone Star ore body and resources, and really are identifying a massive new resource, which will be great for the future of our company." Lone Star is expected to support 200 million pounds per year of copper production, with a mine life of about 20 years. Fluor Corporation (NYSE:FLR) (Irving, Texas) is providing engineering, procurement and construction on the project, which is expected to be completed in the first half of 2020. For more information, see Industrial Info's project report and October 25, 2018, article - Freeport-McMoRan Sees Promise in Arizona Copper Mine.
Executives at the company said that Freeport's expected capital expenditures in 2019 will total $2.4 billion, with $1.3 billion going toward the Grasberg and Lone Star mines. While these remain the company's two major projects, Freeport is keeping an eye on continued future growth. Adkerson said, "We're going to look at other future growth opportunities from a large portfolio of reserves and resources. We have a great opportunity in Chile with our El Abra mine, and then we have a number of opportunities in U.S. mines. We're going to be evaluating them and ranking them and be prepared to go forward when markets give us the comfort to go forward."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 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.
