American miner, Freeport-McMoRan Inc., (NYSE: FCX) aimed to expand its existing copper smelter at Gresik, East Java by 30 percent - Photo by Finance Ministry

JAKARTA (TheInsiderStories) – American miner, Freeport-McMoRan Inc., (NYSE: FCX) aimed to expand its existing copper smelter at Gresik, East Java by 30 percent, said the company yesterday. The company also wants to adding a precious metals refinery in place of constructing an entirely new smelter nearby.

The CEO, Richard Adkerson, said in a statement, the company choose to expand the smelter and adding a precious metals refinery rather than building a new smelter. In addition, He stated, there would have to be an agreement allowing his company to export the excess.

In the report, he announced, the ramp-up of at the Grasberg mines managed by PT Freeport Indonesia (PTFI) in Papua continues to advance on schedule. During third-quarter 2020, a total of 55 new drawbells were added at the Grasberg Block Cave and Deep Mill Level Zone (DMLZ) underground mines, bringing cumulative open drawbells to over 300.

Combined average production from the Grasberg Block Cave and DMLZ mines approximated 60,000 metric tons of ore per day during third-quarter 2020, 9 percent above the second-quarter 2020 average but approximately 15 percent below the July 2020 forecast, primarily reflecting unplanned downtime and a brief labor-related work stoppage.

However, metal volume targets were achieved during third-quarter 2020 as a result of higher ore grades. At the end of September 2020, combined average production from the Grasberg Block Cave and DMLZ mines totaled approximately 94,000 metric tons of ore per day and the ramp-up schedule remains on track.

PTFI expects its 2021 production to approximate 1.4 billion pounds of copper and 1.4 million ounces of gold, which is nearly double projected 2020 levels. The successful completion of this ramp up is expected to enable the unit to generate average annual production for the next several years of 1.55 billion pounds of copper and 1.6 million ounces of gold at an average unit net cash cost of approximately $0.20 per pound of copper assuming an average price of $1,400 per ounce of gold and achievement of projected sales volumes and cost estimates.

The joint venture firm with state-owned mining holding, PT Indonesia Asahan Aluminium (MIND ID) estimated annual capital spending on underground mine development projects is expected to average approximately $900 million per year for the three-year period 2020 through 2022, net of scheduled contributions from the partner.

Adkerson also reported, the FCX’ consolidated copper sales from PTFI of 219 million pounds in third-quarter 2020 were higher than third-quarter 2019 consolidated copper sales of 139 million pounds, primarily reflecting higher copper ore grades and timing of shipments in third-quarter 2019, partly offset by anticipated lower mining and milling rates associated with the ramp-up of underground mining at the Indonesian unit.

The miner’ consolidated gold sales from PTFI of 230 thousand ounces in third-quarter 2020 were slightly lower than third-quarter 2019 consolidated gold sales of 239 thousand ounces, primarily reflecting lower mining and milling rates, partly offset by timing of shipments in third-quarter 2019. FCX’ consolidated sales volumes from PTFI are expected to approximate 790 million pounds of copper and 800,000 ounces of gold for the year 2020.

As the unit continues to ramp-up production from its underground ore bodies, metal production is expected to improve significantly in 2021, compared with 2020 and 2019. Until September, said Adkerson, Freeport-McMoRan posted a net loss attributable to common stock of $329 million, $0.22 per share and $(109) million, $(0.08) per share.

After adjusting for debt extinguishment costs and other net charges totaling $101 million, $0.07 per share, adjusted net income attributable to common stock totaled $430 million, $0.29 per share, in third quarter 2020. For background, FCX has a 48.76 percent ownership interest in PTFI and manages its mining operations.

Under the terms of the shareholders agreement, FCX’ economic interest in PTFI approximates 81 percent through 2022.

Written by Editorial Staff, Email: theinsiderstories@gmail.com