Freeport-McMoRan Inc. said it has made continued progress in growing copper and gold volumes by 30 to 40 per cent, reducing net unit cash costs of copper by 25 per cent to approximately US$1.30 per pound, and more than doubling cash flows by 2021 compared with 2019.
The company remains focused on increasing volumes from its underground orebodies in Papua, Indonesia. Quarter-to-date through 5 March 2020, production from the Grasberg Block Cave and Deep MLZ orebodies averaged approximately 35,000 metric tonnes of ore per day, 35 per cent above the fourth quarter 2019 average and in line with expectations.
The miner also said its Lone Star project in the United States is nearing completion and is expected to be commissioned during 2020. Further, innovation and technology initiatives to enhance productivity and unit cost performance are ongoing and achieving durable results.
Richard C. Adkerson, Freeport-McMoRan president and chief executive officer, said, “Despite market volatility and potential economic impacts of the coronavirus and turmoil in the global oil market, our team remains focused on execution of our plans to enhance performance at low copper prices and provide opportunities for superior performance as market conditions improve. Copper is an essential element of the global economy and its fundamental long-term outlook remains favourable.”
Execution on these three important initiatives is expected to significantly enhance the company’s cash flows in 2021 and beyond. At copper prices ranging from US$2.75 to US$3.00 per pound, Freeport-McMoRan estimates free cash flow generation ranging from an average of over US$2 billion to nearly US$3 billion per annum in 2021 and 2022.
The miner also announced that there have been no significant disruptions to its supply chain or product shipments since the coronavirus outbreak. The company said it will continue to monitor the situation closely and will carefully manage all costs, capital expenditures and production plans during this period of uncertainty.