Thursday, January 24, 2008

Freeport making major investment in new mines and production

Freeport McMoRan is expanding development at their Morenci, Sierrita, and Bagdad mines in Arizona and the Cerro Verde mine in Peru at a cost of about $400 million. These projects should add 200 million pounds of copper and 7 million pounds of moly by 2011. These figures were announced in Freeport’s 4th quarter earnings report yesterday.

Another $100 million is being invested to restart the Miami mine in Arizona. That should produce 100 million pounds of copper per year for 5 years starting in 2010.

Meanwhile, the $675 million Safford mine began producing copper by the end of 2007. [right - Safford assembly & staging area - from World of Mining Professionals]

Exploration drilling is underway at the nearby Lone Star project.

Freeports earnings were below expectations as the price of copper softened in expectations of reduced demand home and abroad – especially in China – due to the economic downturn.

However, the flailing of the world’s financial markets are pushing gold higher, hitting $916/ounce on Jan. 15 and running over $900 as I write this. Freeport reported gold production of 161,000 ounces in the 4th quarter, and 2.3 million ounces for all of 2007.

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