Freeport-McMoRan Copper & Gold Inc.’s (FCX) $3.5 billion Cerro Verde project expects to increase its annual output by 45% to 1 billion pounds of copper.
At Cerro Verde, the feasibility study for a large-scale concentrator expansion was expected to be completed in second-quarter 2011. In the second quarter, management had stated that the $3.5 billion project would expand the concentrator facilities from 120,000 metric tons of ore per day to 360,000 metric tons of ore per day and provide incremental annual production of approximately 600 million pounds of copper beginning in 2016.
Freeport expects to file an environmental impact assessment in the second half of 2011.
Cerro Verde is an open-pit copper and molybdenum mining complex, which was once government-owned. The Peruvian government acquired the property from Anaconda in 1970 and divested the property in 1994. Cerro Verde has the third oldest SX/EW facility in the world.
Cerro Verde is 53.56% owned by Freeport, 21% by SMM Cerro Verde Netherlands B.V., 19.3% by Compania de Minas Buenaventura S.A.A., and 6.14% by other shareholders, whose shares are publicly traded on the Lima Stock Exchange.
On July 21, 2011, Freeport reported a profit of $1.37 billion or $1.43 per share in the second quarter of 2011, which more than doubled from $649 million or 70 cents per share in the same quarter of 2011. The profit exceeded the Zacks Consensus Estimate by 9 cents per share.
Revenues in the quarter surged 50% to $5.81 billion, surpassing the Zacks Consensus Estimate of $5.63 billion. Consolidated sales from mines totaled 1.0 billion pounds of copper, 356,000 ounces of gold and 21 million pounds of molybdenum compared with 914 million pounds of copper, 298,000 ounces of gold and 16 million pounds of molybdenum in the second quarter of 2010.
Headquartered in Phoenix, Arizona, Freeport-McMoRan Copper & Gold Inc. is engaged in mineral exploration and development; mining and milling of copper, gold, molybdenum and silver; as well as the smelting and refining of copper concentrates.
The company conducts its operations primarily through its principal operating subsidiaries, PT Freeport Indonesia, Freeport-McMoRan Corporation (formerly Phelps Dodge) and Atlantic Copper. Its major competitors include Newmont Mining Corp. (NEM) and Southern Copper Corp. (SCCO). It currently retains Zacks #3 Rank on the stock, which translates to short-term rating of “Hold”.
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