| Type | Public |
|---|---|
| Traded as | NYSE: FCX S&P 500 Component |
| Industry | Mining |
| Founded | 1912 |
| Headquarters | Phoenix, Arizona, USA |
| Area served | Worldwide |
| Key people | James R. Moffett (Chairman of the Board) Richard C. Adkerson (President) (CEO) (Director) William Kennon McWilliams, Jr' (Founder) |
| Products | Copper Gold Molybdenum |
| Revenue | $ 18.982 billion (2010) |
| Operating income | $ 8.987 billion (2010) |
| Profit | $ 4.336 billion (2010) |
| Total assets | $ 29.386 billion (2010) |
| Total equity | $ 12.504 billion (2010) |
| Employees | 29,700 - June 2011 |
| Website | FCX.com |
Freeport-McMoRan Copper & Gold Inc., (FMCG, NYSE: FCX) often called simply Freeport, is the world's lowest-cost copper producer[1] and one of the world's largest producers of gold. It was formerly based in New Orleans, Louisiana but moved its headquarters to Phoenix, Arizona, after acquiring copper producer Phelps Dodge in 2007; its headquarters are located in the Freeport-McMoRan Center in downtown Phoenix. In addition to Phelps Dodge, its subsidiaries include PT Freeport Indonesia, PT Irja Eastern Minerals and Atlantic Copper, S.A. Freeport is the largest publicly traded copper and molybdenum producer in the world.
Best known for its Grasberg mine in Papua province, Indonesia, the company is the largest taxpayer to the Indonesian government. It mines and mills ores containing copper, gold, molybdenum and silver for the world market. Richard C. Adkerson is President and Chief Executive Officer of Freeport-McMoRan Copper & Gold and James R. Moffett is the company's Chairman.
McMoRan Exploration Company (NYSE: MMR) is a separately traded firm with some shared management with Freeport-McMoRan Copper & Gold Inc.[2] Richard C. Adkerson and James R. Moffett are co-chairmen of McMoRan Exploration. McMoRan Exploration, an oil and gas exploration and production firm based in New Orleans, Louisiana, was created in 1998 by the merger of McMoRan Oil & Gas and Freeport-McMoRan Sulphur. In 2008, McMoRan Exploration acquired the famed Blackbeard offshore prospect in the Gulf of Mexico, that Exxon Mobil Corp. abandoned in 2006 after drilling a 30,000-foot (9,100 m) dry hole. As of mid-2008, McMoRan Exploration's Blackbeard well is below 32,550 feet (9,920 m), the deepest oil exploration well ever recorded.[3]
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The company was founded as the Freeport Sulphur Company in 1912, and the company founded Freeport, Texas that same year, near its new sulphur mines, then the largest in the world.[4] Freeport pioneered mining sulphur by the Frasch Process at mines along the US Gulf Coast. Freeport Sulphur began to diversify in 1931, purchasing manganese deposits in Oriente Province, Cuba. The company produced nickel during WW2, and potash in the 1950s. In 1955, Freeport invested $119 million in constructing a nickel -cobalt mine at Moa Bay, Cuba and a refinery at Port Nickel, Louisiana. On March 11, 1957 the US government announced a contract buying Freeport production of nickel and cobalt from Cuba until June 30, 1965 as strategic commodities. In July 1957 the House Committee referred charges to the Justice Department against Freeport for investigation of a government trying to reduce the multi-million dollar contract. In 1960 the Castro government nationalized the Cuban facility.[5]
In 1956, the company formed Freeport Oil Company, and sold a Louisiana oil discovery for $100 million in 1958. In 1961, the company entered the kaolin business, and in 1964 formed Freeport of Australia to pursue mining opportunities there and in the surrounding Pacific Ocean region. In 1960, a team of Freeport geologists confirmed the Dutch discovery of the rich Ertsberg copper and gold deposits, located in extremely rugged, remote country in the Jayawijaya Mountains, in then-Netherlands New Guinea. In 1966, Freeport founded Freeport Indonesia, Inc. and negotiated a contract with the Indonesian government, which had taken over the former Dutch colony in 1963, to develop the Ertsberg deposit. In their feasibilty study, Freeport geologists estimated that the orebody totaled 33 million tons averaging 2.5% copper. The Ertsberg was the largest above-ground copper deposit ever discovered.[6]
Construction of an open pit mine began in May 1970, and in mid-1973 the new Ertsberg mine was declared fully operational. Officials at Bechtel, the primary contractor on the project,called mine development at Ertsberg "the most difficult engineering project they had ever undertaken." The many challenges included building a 101 kilometer long access road (a project that required boring kilometer long tunnels through two mountains) and constructing the world's longest single span aerial tramway. Aerial tramways were needed to move people, supplies, and ore because a 2,000-foot (610 m) cliff separates the Ertsberg mine (at 12,000 feet (3,700 m) elevation) from the mill (at 10,000 feet). Getting copper concentrate from that mill to the shipping port required installation of a 109-kilometer long slurry pipeline - then the world's longest.
Mine construction and startup cost about US$200 million. The development of the Ertsberg District was an engineering marvel, but the mine's early financial performance was disappointing. Depressed copper prices and high operating costs kept the operation marginal during the 1970s.[6]
In 1971 the company changed its name to Freeport Minerals Company (FMC) to reflect its role as a diversified mineral producer. FMC formed Freeport Gold Company in 1981 to operate a rich new gold discovery at Jerrit Canyon, Nevada.
McMoRan Oil & Gas was formed in 1967 by three partners, William Kennon McWilliams Jr. ("Mc"), James R. (Jim Bob) Moffett ("Mo"), who were both petroleum geologists, and B.M. Rankin, Jr. ("Ran"), "a specialist in land-leasing and sales operations."[5] During the 1970s, the company acquired a reputation as an aggressive petroleum explorer with cost-efficient drilling programs. It formed drilling partnerships with several companies, including Freeport. In 1981 Freeport Minerals merged with McMoRan Oil & Gas to form Freeport-McMoRan Inc.
Since 1973, Freeport has operated the world's largest gold mine, located in Indonesia's Papua province.
In 1982 Freeport Gold Company was the world's largest gold producer, producing 196,000 troy ounces (6,100 kg) of gold in its first full year of operation.
By 1989 Freeport-McMoRan had two world-class mines to develop: the new discovery at Grasberg, Indonesia, with the world's largest gold ore reserve, and one of the world's largest copper reserves; and the Main Pass sulfur-oil-gas deposit offshore from Louisiana, with estimated reserves totalling 67 million tonnes of sulfur, 39 million barrels (6,200,000 m3) of oil, and 7,000,000,000 cubic feet (0.20 km3) of natural gas. These were rich deposits, but would be very expensive to develop. Freeport sold about $1.5 billion in assets to finance the development of these two projects.[5]
By 1991, Freeport-McMoRan Inc. was basically a holding company for its two principal assets, Freeport-McMoRan Copper & Gold (FMCG) and Freeport-McMoRan Resource Partners, which ran the sulphur and fertilizer business. Freeport's focus was to raise enough cash to finance the development of the huge finds at Grasberg and Main Pass. Both of these assets got better the more they were studied: Main Pass was the second largest recoverable sulphur reserve then known, and Grasberg's ore reserves—and profit potential—were truly enormous.
In 1994 Freeport-McMoRan spun off its entire interest in Freeport-McMoRan Copper & Gold, which became an independent company, fully focussed on the Indonesian operation. In 1997 Freeport-McMoRan Inc., the former parent company, was itself acquired by IMC Global, a large fertilizer producer.
In 1997 the company exposed the Bre-X Gold Scandal. Brought in by the Indonesian government, Freeport was not able to substantiate Bre-X's claims to having found the largest gold mine ever discovered; Bre-X subsequently was exposed as a fraud and went bankrupt.
The Grasberg mine, FMCG'S crown jewel, soon became a source of violent trouble and terrible publicity,[7] which continues today. It is also the world's most profitable mine.[8] The Grasberg mine's tailings have "severely impacted" more than 11 square miles (28 km2) of rainforest, according to a 1996 Dames & Moore environmental audit. The report, endorsed by Freeport, also estimates that during the life of the mine 3.2 billion tons of waste rock - a great part of which generates acid - will be dumped into the local river system. Overburden (waste rock) from the mine has polluted a nearby lake due to acid mine drainage.[9]
Freeport-McMoRan is a signatory participant of the Voluntary Principles on Security and Human Rights.
North American operations:[10]
South American operations:
European operations:
African project:
Asian operations:
In 2003 Freeport acknowledged it had been paying the local Indonesian military and police to handle the Grasberg mine's security operations. Freeport argues that this is necessary to provide security to its employees, both local and foreign. The Indonesian security forces commit systematic human rights violations, particularly against environmental groups and supporters of a return to West Papuan independence as before the Indonesian military seized power in 1969.[11]
In 2005, the New York Times reported that company records showed the total amount paid between 1998 and 2004 amounted to nearly US$20 million, distributed among both officers and units, with one individual receiving up to US$150,000. The company response was that there was "no alternative to our reliance on the Indonesian military and police in this regard", and that the support provided was not for individuals, but rather for infrastructure, food, housing, fuel, travel, vehicle repairs and allowances to cover incidental and administrative costs.
Since October 17, 2011 the company halted mining operation in Papua, amid a strike that has led to a deteriorating security situation and intensified calls for independence. 70 percent of workers joined the strike appeal to increase the salary since September 15, 2011, block the roads, clash with policemen, killing of 3 people by unidentified gunmen and cut concentrate pipeline in several places.[12]
Claims of severe environmental damages caused by the company's engagements in the Grasberg mine in Indonesia has led The Government Pension Fund of Norway, the world's largest pension fund [13], to exclude Freeport-McMoRan from its investment portfolia, after a recommendation from the fund's ethical council.[14]
The Political Economy Research Institute ranks Freport-McMoRan 22nd among corporations emitting airborne pollutants in the United States. The ranking is based on the emission quantity (4 million pounds in 2005) and toxicity.[15]
The company was founded by Langbourne Williams Snr. as Freeport Texas in 1912 in the sulphur mining industry, in 1929 Langbourne Williams Jnr. collaborated with Payne Whitney to regain control of the company. In 1935 the Board of Directors included chairman John Hay Whitney, Kidder, Peabody & Co., Eugene L. Norton, Langbourne M. Williams Jr. (president), Monro B. Lanier, Chauncey Stillman, Godfrey Stillman Rockefeller, David M. Goodrich. The company change name to Freeport Sulphur in December 1936. Other directors have included Augustus Long, Robert A. Lovett, Charles Wight from 1947, Benno Schmidt 1954-1997, Jean Mauzé, Robert W. Bruce III, Robert C. Hills, Paul W. Douglas 1981-1983 after serving on Freeport Minerals 1975-1981, Henry Kissinger 1988-1995, George Putnam, Mikhael Yosia and J. Taylor Wharton.
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