FCX expects Africa's sales to approximate 310 million pounds of copper and 25 million pounds of cobalt for the year 2012, compared with 283 million pounds of copper and 25 million pounds of cobalt for the year 2011.
Africa's unit net cash costs (net of cobalt credits) of $1.22 per pound of copper in second-quarter 2012 were higher than unit net cash costs of $0.94 per pound in second-quarter 2011 primarily reflecting lower cobalt credits, partly offset by higher copper volumes.
FCX estimates Africa's average unit net cash costs would approximate $1.16 per pound of copper for the year 2012, based on current sales volume and cost estimates and assuming an average cobalt price of $12 per pound for the second half of 2012. Africa's unit net cash costs for 2012 would change by approximately $0.06 per pound for each $2 per pound change in the average price of cobalt for the second half of 2012.
Molybdenum. FCX is the world's largest producer of molybdenum. FCX conducts molybdenum mining operations at its wholly owned Henderson underground mine and Climax open-pit mine in Colorado, and also sells molybdenum produced from its North and South America copper mines.Development Activities. Construction activities at the Climax molybdenum mine, which included the installation of a 25,400 metric ton per day mill facility, mining equipment and environmental management systems, is substantially complete. During second-quarter 2012, the operation began commercial production. Production from Climax is expected to ramp up to a rate of 20 million pounds of molybdenum per year during 2013 and, depending on market conditions, may be increased to 30 million pounds of molybdenum per year. FCX intends to operate the Climax and Henderson mines in a flexible manner to meet market requirements. FCX believes that Climax is one of the most attractive primary molybdenum mines in the world, with large-scale production capacity, attractive cash costs and future growth options. Operating Data. Following is summary consolidated operating data for the Molybdenum operations for the second quarters and first six months of 2012 and 2011:
|Three Months Ended||Six Months Ended|
|June 30,||June 30,|
|Molybdenum (millions of recoverable pounds)|
|Sales, excluding purchases b||20||21||41||41|
|Average realized price per pound||$||15.44||$||18.16||$||15.39||$||18.13|
|Henderson's unit net cash cost per pound|
|of molybdenum c||$||6.83||$||6.21||$||6.85||$||6.17|