In its July 21, 2011, report of second-quarter financial results, Freeport-McMoRan Copper & Gold (FCX) included updates on major project developments at its operations worldwide.

At the Climax molybdenum mine near Leadville, Colorado, USA, construction activities for a restart of mining were 75% complete, and production is expected to begin during 2012. Production is planned to ramp up to a rate of 20 million lb/y of molybdenum during 2013 and, depending on market conditions, may be increased to 30 million lb/y. Freeport intends to operate its Climax and Henderson molybdenum mines in a flexible manner to meet market requirements. The company sees Climax as one of the most attractive primary molybdenum development pro-

jects in the world, with large-scale production capacity, attractive cash costs, and future growth options. Estimated remaining costs for the initial phase of the project approximate $250 million.

At Morenci, Arizona, USA, Freeport has completed its project to ramp up mining rates to 635,000 mt/d of ore and milling rates to approximately 50,000 mt/d, resulting in a production increase of 125 million lb/y of copper. Freeport is advancing a feasibility study to expand mining and milling capacity at Morenci to process additional sulphide ores identified through positive exploratory drilling over the past few years. This project, which would require significant investment, would increase milling rates to approximately 115,000 mt/d and would target incremental annual copper production of approximately 225 million lb/y within three years, following completion of the feasibility study, expected by year-end 2011.

During second-quarter 2011, Freeport successfully restarted mining and milling activities at the Chino mine in New Mexico. Planned mining and milling rates are expected to be achieved by the end of 2013. Incremental additional copper production is expected to be 100 million lb each in 2012 and 2013, and 200 million lb in 2014. Costs for the project associated with equipment and mill refurbishment are expected to approximate $150 million.

At Tenke Fungurume in the Democratic Republic of the Congo, milling facilities that were designed to produce at a capacity rate of 8,000 mt/d of ore have performed above capacity, with throughput averaging 9,700 mt/d during the second quarter 2011. Mining rates have been increased to enable copper production to increase from the initial project capacity of 250 million lb/y to approximately 290 million lb/y.

Freeport is planning a second phase of the Tenke project, which would include optimizing the current plant and increasing capacity. As part of the second phase, the company is completing studies to expand the milling rate to 14,000 mt/d of ore and to construct related processing facilities that would target the addition of approximately 150 million lb/y of copper in an approximate two-year timeframe.

At El Abra in Chile, during the first quarter of 2011, Freeport began production from newly commissioned stacking and leaching facilities to transition from oxide to sulphide ores. Production from the sulphide ores, which is projected to reach design levels in the second half of 2011, is expected to approximate 300 million lb/y of copper, replacing the currently depleting oxide copper production. The aggregate capital investment for this project is expected to total $725 million through 2015, including $565 million for the initial phase of the project expected to be completed in 2011.

Freeport is also conducting prefeasibility studies for a potential large-scale milling operation at El Abra to process additional sulphide material and to achieve higher recoveries.

At Cerro Verde in Peru, the feasibility study for a large-scale concentrator expansion was completed in the second quarter of 2011. The $3.5-billion pro-

ject would expand concentrator throughput capacity from 120,000 mt/d to 360,000 mt/d of ore and provide approximately 600 million lb/y of additional copper production beginning in 2016. Freeport expects to file an environmental impact assessment for the project in the second half of 2011.

In Indonesia, Freeport has several projects in progress in the Grasberg minerals district, primarily related to the development of the large-scale, high-grade underground orebodies located beneath and nearby the Grasberg open-pit. In aggregate, these underground orebodies are expected to ramp up to approximately 240,000 mt/d of ore following the currently anticipated transition from the Grasberg open-pit in 2016.

The Deep Ore Zone (DOZ) mine has been expanded to a capacity of 80,000 mt/d, and a feasibility study for the Deep Mill Level Zone (DMLZ) has been completed. The high-grade Big Gossan mine, which began producing in fourth-quarter 2010, is expected to reach full rates of 7,000 mt/d of ore by the end of 2012. Substantial progress has been made in developing infrastructure and underground workings will enable access to the underground orebodies. Development of the terminal infrastructure and mine access for the Grasberg Block Cave and DMLZ orebodies is in progress. Over the next five years, estimated aggregate capital spending is expected to average approximately $635 million per year on underground development activities.