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Freeport forecasts increase in NA copper sales

Keywords: Tags  Freeport-McMoRan Copper & Gold, earnings report, copper, McMoRan Exploration, Plains Exploration, Suzy Waite


NEW YORK — Freeport-McMoRan Copper & Gold Inc. expects its North American copper sales will increase 7 percent this year, primarily due to higher production at its Morenci Mine in Arizona and its Chino Mine in New Mexico.

The Phoenix-based company forecast North American copper sales of 1.45 billion pounds in 2013 vs. 1.35 billion pounds last year.

The company’s North American production rose 1.8 percent to 343 million pounds in the first quarter from 337 million pounds in the same period last year, a direct result of improved production at Morenci and Chino.

First-quarter copper sales rose 15 percent to 954 million pounds on higher production from the company’s mines in Africa and Indonesia, but net income fell 15.2 percent to $648 million from $764 million a year earlier.

Freeport said it will continue to ramp up its operations in Indonesia over the next several years, aiming to start production at its Deep Mill Level Zone Mine by 2015 and its Grasberg Block Cave Mine by 2017.

The company also is continuing its exploration activities near existing mines in the belief that there are "significant future potential reserve additions" near its sites in Africa and the Americas.

Freeport said it is on track to complete the acquisition of oil and gas producers Plains Exploration & Production Co., Houston, and McMoRan Exploration Co., New Orleans, by the second quarter. The company completed $10.5 billion in debt financing in the quarter for the pending acquisitions, consisting of $4 billion in bank term loans and $6.5 billion in senior notes.

Freeport announced its plans to acquire Plains Exploration and McMoRan Exploration in December ( amm.com, Dec. 5). The move quickly came under fire from critics who charged that the two different industries were incompatible ( amm.com, Dec. 6).

Freeport maintains that the acquisitions should be seen as an add-on to its mining business rather than a diversion from it.


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