Freeport reports lower Q3 copper, gold production from Indonesian ops
Thursday, October 25 2007 - 12:07 AM WIB
US mining giant Freeport-McMoRan Copper & Gold Inc. (FCX) reported on Wednesday that its Indonesian unit PT.Freeport Indonesia (PT-FI) produced and sold less copper and gold in the third quarter of 2007 due to lower grade of ore processed,
Consolidated Third Quarter Nine Months
Indonesian Mining Operations 2007 2006 2007 2006
Copper (millions of recoverable pounds):
Production 177 308 943 766
Sales 197 324 948 769
Average realized price per pound $3.63 $3.43 $3.48 $3.38
Gold (thousands of recoverable ounces):
Production 182 449 2,051 1,218
Sales 234 478 2,061 1,228
Average realized price per ounce $694.95 $608.57 $668.47 $540.67
FCX’s consolidated share of annual sales from in 2007 is projected to approximate 1.1 billion pounds of copper and over 2.1 million ounces of gold, in excess of 100,000 ounces higher than previous estimates because of higher ore grades. At the Grasberg mine, the sequencing in mining areas with varying ore grades causes fluctuations in the timing of ore production, resulting in varying quarterly and annual sales of copper and gold. PT-FI expects to be mining in a relatively low-grade section of the Grasberg open pit in the fourth quarter of 2007 and in the first half of 2008. As a result, fourth-quarter 2007 projected sales volumes, totaling approximately 165 million pounds of copper and 70 thousand ounces of gold, reflect the processing of lower ore grades.
PT-FI’s unit net cash costs, including gold and silver credits, averaged $1.30 per pound of copper during the third quarter of 2007, compared with $0.70 per pound in the 2006 quarter. The higher unit net cash costs in the 2007 quarter compared with the 2006 quarter reflect the significantly lower copper and gold volumes, partly offset by higher gold prices.
Third Quarter Nine Months
2007 2006 2007 2006
Per pound of copper:
Site production and delivery, after adjustments $ 1.76 $ 1.10 $ 1.10 $ 1.1
Gold and silver credits (0.90) (0.95) (1.50) (1.02)
Treatment charges 0.34 0.44 0.35 0.43
Royalties 0.10 0.11 0.12 0.11
Unit net cash costs a $ 1.30 $ 0.70 $ 0.07 $ 0.69
FCX also reported that several projects in PT-FI are in progress throughout the Grasberg District, including developing its large-scale underground ore bodies located beneath and adjacent to the Grasberg open pit. The Deep Ore Zone (DOZ) 50,000 metric tons of ore per day expansion is complete with third-quarter rates averaging 55,600 metric tons per day. A further expansion to 80,000 metric tons per day is under way with completion targeted by 2010, the company said.
Other projects include the development of the high-grade Big Gossan mine, expected to ramp-up to full production of 7,000 metric tons per day in late 2010, the continued development of the Common Infrastructure project, which will provide access to the Grasberg underground ore body, the Kucing Liar ore body and future development of the mineralized areas below the DOZ mine.
PT-FI’s 2007 exploration efforts in will continue to test extensions of the Deep Grasberg and Kucing Liar mine complex and to evaluate targets in the area between the Ertsberg East and Grasberg mineral systems from the new Common Infrastructure tunnels. Initial drill results from the Common Infrastructure tunnel are positive and additional drilling is in process. FCX continues its efforts to resume exploration activities in certain prospective areas in Papua, outside Block A (the Grasberg contract area).(denny)