Freeport-McMoRan reported consolidated sales of 4.2 billion lb of copper, 1.8 million oz of gold and 75 million lb of molybdenum for 2022. Last year the company sold 3.8 billion lb of copper. Sales for 2023 are expected to be approximately 4.2 billion lb of copper, 1.7 million oz of gold and 80 million lb of molybdenum. The average realized prices in Q4 2022 were $3.77/lb for copper, $1,789/oz for gold and $18.94/lb for molybdenum.
Freeport invested $3.5 billion in capital projects last year (including $1.7 billion for major mining projects and $800 million for the Indonesian smelter project). Capital expenditures for the year 2023 are expected to be approximately $5.2 billion (including $2.3 billion for major mining projects and $1.8 billion for the Indonesian smelter project).
“The Freeport team’s performance in 2022 was solid,” Richard C. Adkerson, chairman and CEO, Freeport-McMoRan said. “We achieved another year of growth in production volumes and enhanced our position as a leading producer of copper. I am particularly proud of the notable successful execution of our long-term projects in Indonesia and the significant accomplishments of our entire global team to address challenges faced by the global mining industry.”
Freeport is advancing efforts to improve copper recovery from its leach processes, including initiatives across its North and South American operations to incorporate new applications, technologies and data analytics. The company believes these leach innovation initiatives provide potential opportunities to produce incremental copper from its large existing leach stockpiles and lower-grade material currently classified as waste. Initial results support the potential for incremental low-cost additions to its production and reserve profile and the company said it has identified opportunities to achieve an annual run rate of 200 million lb/y of copper through these initiatives by the end of 2023.
Freeport operates seven open-pit copper mines in North America: Morenci, Bagdad, Safford (including Lone Star), Sierrita and Miami in Arizona, and Chino and Tyrone in New Mexico. In addition to copper, some of these mines produce molybdenum concentrate, gold and silver.
Lone Star is increasing its operating rates to achieve targeted production of approximately 300 million lb/y of copper from oxide ores in 2023 (compared with the initial design capacity of 200 million lb/y of copper). The oxide project at Lone Star advances the opportunity for development of the underlying, large-scale sulfide resources.
Freeport is planning an expansion to double the concentrator capacity of the Bagdad operation in northwest Arizona. The company said it is engaging stakeholders and is conducting a feasibility study, which is expected to be completed in 2023. FCX is advancing plans for expanded tailings infrastructure projects to support Bagdad’s long-range plans.
Increased operating rates at Cerro Verde and higher mining and stacking activities at El Abra resulted in a 12% increase in copper production from South America this year compared to 2021, which was impacted by COVID-19 protocols.
El Abra’s large sulfide resource could support a potential major mill project similar to the large-scale concentrator constructed at Cerro Verde in 2015. The company continues to evaluate the optimal scope and timing for the sulfide project. Freeport said it is advancing plans to invest in water infrastructure to provide options to extend existing operations, while continuing to monitor potential changes in Chile’s regulatory and fiscal matters. The company said it will defer major investment decisions pending clarity on such matters.
PT-FI operates one of the world’s largest copper and gold mines at the Grasberg minerals district in Central Papua, Indonesia. It currently has three underground operating mines in the Grasberg minerals district: Grasberg Block Cave, Deep Mill Level Zone (DMLZ) and Big Gossan. PT-FI’s milling rates for ore extracted from its underground mines averaged 198,100 metric tons per day (mt/d) of ore in Q4 2022. The installation of additional milling facilities at PT-FI is currently expected to be completed in late 2023, which would increase milling capacity to approximately 240,000 mt/d which would allow the operation to produce 1.6 billion lb/ of copper and 1.6 million oz/y of gold.
In 2018, PT-FI committed to constructing additional domestic smelting capacity totaling 2 million mt/y of concentrate by the end of 2023. Construction of a greenfield smelter in Gresik, Indonesia with a capacity to process approximately 1.7 million mt/y of copper concentrate was approximately 50% complete at the end of last year, and is expected to be commissioned during 2024 at an estimated cost of $3 billion.
Expansion of PT Smelting’s capacity by 30% to 1.3 million mt/y of copper concentrate is expected to be completed by the end of 2023. PT-FI is funding the cost of the expansion, estimated to approximate $250 million, with a loan that will convert to equity, increasing ownership in PT Smelting from PT-FI’s current 39.5% ownership interest to a majority ownership interest upon project completion. PT-FI will consolidate PT Smelting’s results following the increase to majority ownership.