Africa Mining. Through its 56 percent owned and wholly consolidated subsidiary Tenke Fungurume Mining S.A.R.L (TFM), FCX operates the Tenke Fungurume (Tenke) mine in the Katanga province of the Democratic Republic of Congo (DRC). In addition to copper, the Tenke mine produces cobalt hydroxide.
Operating and Development Activities. The milling facilities at Tenke, which were designed to produce at a rate of 8,000 metric tons of ore per day, continue to perform above capacity, with throughput averaging 12,900 metric tons of ore per day in second-quarter 2012 and 12,500 metric tons of ore per day for the first six months of 2012. Higher mining rates have increased copper production from the initial project capacity of 250 million pounds per year to approximately 290 million pounds per year.
FCX is constructing a second phase of the project, which would include optimizing the current plant and increasing capacity. FCX plans to expand the mill rate to 14,000 metric tons of ore per day and is constructing related processing facilities that would target the addition of approximately 150 million pounds of copper per year in 2013. The approximate $850 million project includes mill upgrades, additional mining equipment, a new tankhouse and a sulphuric acid plant expansion. Construction activities are progressing well and are expected to be completed by year-end 2012.
FCX continues to engage in drilling activities, exploration analyses and metallurgical testing to evaluate the potential of the highly prospective minerals district at Tenke. These analyses are being incorporated in future plans to evaluate opportunities for expansion. Future expansions are subject to a number of factors, including economic and market conditions, and the business and investment climate in the DRC.Operating Data. Following is summary consolidated operating data for the Africa mining operations for the second quarters and first six months of 2012 and 2011:
|Three Months Ended||Six Months Ended|
|June 30,||June 30,|
|Copper (millions of recoverable pounds)|
|Average realized price per pound a||$||3.45||$||4.08||$||3.54||$||4.11|
|Cobalt (millions of contained pounds)|
|Average realized price per pound||$||8.24||$||11.16||$||8.40||$||11.02|
|Unit net cash costs per pound of copper:|
|Site production and delivery, excluding adjustments||$||1.48||$||1.62||$||1.49||$||1.57|
|Cobalt credits b||(0.33||)||(0.77||)||(0.34||)||(0.76||)|
|Royalty on metals||0.07||0.09||0.08||0.10|
|Unit net cash costs c||$||1.22||$||0.94||$||1.23||$||0.91|