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Freeport-McMoRan Copper & Gold Inc. Reports Second-Quarter And Six-Month 2012 Results

At Cerro Verde, plans for a large-scale concentrator expansion continue to be advanced. The approximate $4 billion project would expand the concentrator facilities from 120,000 metric tons of ore per day to 360,000 metric tons of ore per day and provide incremental annual production of approximately 600 million pounds of copper and 15 million pounds of molybdenum beginning in 2016. An environmental impact assessment was filed in fourth-quarter 2011. Permitting is being advanced and engineering and procurement of long-lead items are in progress.

Operating Data. Following is summary consolidated operating data for the South America mining operations for the second quarters and first six months of 2012 and 2011:
  Three Months Ended   Six Months Ended
June 30, June 30,
  2012   2011 2012   2011
Copper (millions of recoverable pounds)
Production 304 327 597 644
Sales 301 331 587 643
Average realized price per pound $ 3.51 $ 4.24 $ 3.56 $ 4.24
Gold (thousands of recoverable ounces)
Production 18 24 37 48
Sales 16 25 35 49
Average realized price per ounce $ 1,596 $ 1,515 $ 1,630 $ 1,467
Molybdenum (millions of recoverable pounds)
Production a 2 3 4 6
Unit net cash costs per pound of copper:
Site production and delivery, excluding adjustments $ 1.56 $ 1.26 $ 1.55 $ 1.28
By-product credits (0.23 ) (0.37 ) (0.26 ) (0.37 )
Treatment charges 0.16   0.19   0.16   0.19  
Unit net cash costs b $ 1.49   $ 1.08   $ 1.45   $ 1.10  

a. Reflects molybdenum production from Cerro Verde. Sales of molybdenum are reflected in the Molybdenum division (refer to page 9).

b. For a reconciliation of unit net cash costs per pound to production and delivery costs applicable to sales reported in FCX's consolidated financial statements, refer to the supplemental schedule, "Product Revenues and Production Costs," beginning on page VII, which is available on FCX's website, " ."

Copper sales from South America mining of 301 million pounds in second-quarter 2012 were lower than second-quarter 2011 sales of 331 million pounds primarily reflecting anticipated lower ore grades at Cerro Verde and Candelaria, partly offset by increased production at El Abra.

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