Freeport-McMoRan focuses on Indonesian mine: Report

The chief executive of Freeport-McMoRan Copper & Gold Inc. said that the mining company had no plans to make any acquisitions and would focus on developing its Grasberg mine in Indonesia, Reuters reported Friday.

"We're focused on this asset," Richard Adkerson said in a speech to the Atlanta Society of Financial Analysts on Wednesday. "We're not looking to buy other companies or invest in other mining projects."

Production at the mine, known as the Grasberg Complex, was curtailed last October after a pit wall gave way, allowing water to enter the mine. The road leading to the mine's most productive area was blocked by debris a few months later.

Adkerson said the mine was returning to normal operations and forecast that it would produce 1 billion pounds of copper and 1.5 million ounces of gold this year. The company expects it to produce 1.5 billion tons of copper and 2.9 million ounces of gold in 2005.

Adkerson also forecast that the New Orleans-based company would generate $1 billion in operating cash flow and $800 million in free cash flow next year if copper and gold prices remained strong.

He said his cash flow forecast was based on a price of $400 per ounce for gold and $1.20 per pound for copper.

Despite Freeport-McMoRan's current aversion to acquisitions, the company is not eschewing expansion, especially around Grasberg. It is located in the Indonesian province of Irian Jaya, which borders Papua New Guinea.

The company abandoned development plans in Papua New Guinea in the mid-1990s, but expects to return now that key metal prices have rebounded.

"There is no reason to think that mineralization stopped at that political border," said Adkerson, who noted that the company quit exploring Papua New Guinea due to low commodity prices.

"We would expect as early as next year to be back out in the field pursuing exploration opportunities in this area."

The company posted net income of $1.07 per share on revenues of $2.2 billion in 2003. (*)