The move is on in Arizona and LBSR will not be left behind. Read the following article
Freeport-McMoRan Copper and Gold is ramping up its mine production in Arizona to dig for more copper while prices are high, and officials predict the boom will continue amid high global demand for the metal.
Phoenix-based Freeport has hired 431 people for a total of 5,386 working at its five mines in Arizona in the past year as it expands its Morenci mine and restarts its Miami project.
The company expects to continue a gradual increase in its Arizona employment and mining activity until 2011.
The boost is fueled by higher copper prices, which helped Freeport raise second-quarter profits about 10 percent even though it pulled less metal from the ground globally.
"We are doing this in an organized, systematic way to control our costs," President and CEO Richard Adkerson said. "If we have an opportunity to increase our (mining) rates, we are studying that."
Morenci will mine 635,000 metric tons of ore per day, up 41 percent from the current mining rate, the company reported. The mill at Morenci was restarted in March and also will increase its operations.
Freeport expects to retrieve an additional 125 million pounds of copper from the mine by 2011 thanks to the increased activity, the company said.
Freeport is investing $40 million to restart mining in Miami and expects to recover 100 million pounds of copper a year from that project by late 2011. It is cost effective because the equipment is already at the site, officials said.
"This will generate revenues to contribute to our business," Adkerson said.
It also is investing $150 million in Safford to build a sulfur burner, which will make sulfuric acid used to process copper ore. Having a local production facility will cut the company's transportation expenses.
Of its five Arizona projects, only the Bagdad mine west of Prescott had fewer people on the payrolls this year than last, a decrease of 29, to 787.
Freeport also is considering restarting mining at the Chino mine in New Mexico, which was suspended in 2008 as the economy slowed and the company cut costs and activity.
The company produced 930 million pounds of copper in the second quarter, compared with 1.07 billion pounds at the same time last year, and sold about 18 percent less of the metal. But Freeport saw an average price of $3.06 per pound of copper sold, compared with $2.22 in the same quarter last year.
The company reported Wednesday it earned $649 million, or $1.40 per share, in the second quarter, compared with $588 million, or $1.38 per share, in the same quarter last year.
"Overall the copper markets we are seeing on the ground day to day in the U.S., northern Europe and, to some extent, Korea and Japan are stronger than we've seen in some time," Adkerson said.
"We are optimistic about copper markets. We think it will be important in the future."
Revenue for the quarter rose to $3.9 billion from $3.7 billion in the same quarter last year. Through the first six months of 2010, revenue is up 31 percent, to $8.23 billion.
Credit Suisse analyst David Gagliano called Freeport a "cash machine" in a research note Wednesday after the company reported its financial results.
"(Freeport) continues to evaluate a host of potential projects that, in total, have the potential to increase annual copper output by about 50 percent in the next 5-10 years," he wrote.
Credit Suisse analysts have a $95 target price on the stock.
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