|Traded as||NYSE: FCX
S&P 500 Index component
|Industry||Metals and Mining
|Gerald J. Ford, Chairman
Richard Adkerson, President & CEO
Kathleen L. Quirk, CFO
|Revenue||$14.830 billion (2016)|
|-$2.792 billion (2016)|
|-$4.154 billion (2016)|
|Total assets||$37.317 billion (2016)|
|Total equity||$6.051 billion (2016)|
Number of employees
11,000 in North America
12,200 in Indonesia
5,400 in South America
1,400 in Europe and other locations
|Subsidiaries||PT Freeport Indonesia
PT Irja Eastern Minerals
Atlantic Copper, S.A.
- 1 Current operations
- 2 History
- 3 References
- 4 External links
The company lists its mining operations as follows:
- Morenci, Arizona - 72% owned by FMCG (copper)
- Bagdad, Arizona - 100% owned (copper, molybdenum)
- Sierrita Mine, Arizona (includes Twin Buttes & Esperanza) - 100% owned (copper, molybdenum)
- Miami, Arizona - 100% owned (copper)
- Safford Mine, Safford, Arizona - 100% owned (copper)
- Chino mine, Santa Rita, New Mexico - 100% owned (copper, molybdenum)
- Tyrone, New Mexico - 100% owned (copper)
- Henderson molybdenum mine, Empire, Colorado - 100% owned (molybdenum)
- Climax mine, Leadville, Colorado - 100% owned (molybdenum)
In 1928, concerned that the management of the company was not moving aggressively to increase reserves, 25-year old investor Langbourne Meade Williams, Jr. collaborated with Payne Whitney to launch a proxy fight and gain control of the company.
In 1955, Freeport Nickel invested $119 million, of which $100 million came from the U.S. government, in constructing a nickel-cobalt mine at Moa Bay, Cuba, and a refinery at Port Nickel, Louisiana. On March 11, 1957, the U.S. government announced a contract with the company to buy nickel and cobalt. In 1960, Fidel Castro implemented a 25% ore tax, effectively nationalizing the facility.
In 1956, the company formed Freeport Oil Company.
Development of the Ertsberg deposit
In 1959, Freeport geologists confirmed the 1936 Dutch discovery of the rich Ertsberg copper and gold deposits, now known as the Grasberg mine, in extremely rugged, remote country in the Jayawijaya Mountains in then-Netherlands New Guinea.
In 1967, the company negotiated a contract with the Indonesian government to develop the Ertsberg deposit. In their feasibility study, Freeport geologists estimated that the orebody totaled 33 million tons averaging 2.5% copper, making it the largest above-ground copper deposit ever discovered. Construction of an open pit mine began in May 1970 and in mid-1973 the mine was declared fully operational. Officials at Bechtel, the primary project contractor, called mine development at Ertsberg "the most difficult engineering project they had ever undertaken." The challenges included building a 101-kilometre (63 mi) long access road (a project that required boring kilometer long tunnels through two mountains) and constructing the world's longest single span aerial tramway. The tramways were needed to move people, supplies and ore because a 2,000-foot (610 m) cliff separates the Ertsberg mine (at 12,000 feet (3,700 m) elevation) from the mill (at 10,000 feet). Moving copper concentrate from that mill to the shipping port required installation of a 109-kilometre (68 mi) slurry pipeline — then the world's longest. Mine construction and startup cost about US$200 million. The Ertsberg project was an engineering marvel, but the mine's early financial performance was disappointing. Depressed copper prices and high operating costs kept profits marginal during the 1970s.
In 1971, the company changed its name to Freeport Minerals Company to reflect its role as a diversified mineral producer.
In 1981, Freeport Minerals Company merged with the McMoRan Oil and Gas Company. The McMoRan Oil and Gas Company was founded in 1967 by three partners, William Kennon McWilliams Jr. ("Mc"), James Robert (Jim Bob) Moffett ("Mo"), who were both petroleum geologists, and Mack Rankin ("Ran"), "a specialist in land-leasing and sales operations." Kent McWilliams (died 1997) was extremely knowledgeable of the micro-paleontology of the Louisiana and Texas coasts. McMoRan's incredible record in hitting paydirt was based on the fundamental petro-geological learning of the founder and the young geologist he began mentoring in the early 1960s.
In 1982, Freeport Gold Company was the world's largest gold producer, producing 196,000 troy ounces (6,100 kg) of gold in its first full year of operation.
In 1985, the company sold a 25% interest in some oil and gas reserves to Britoil for $73.5 million.
In 1994, the company completed the corporate spin-off of its entire interest in Freeport-McMoRan Copper & Gold, which owned the Grasberg mine.
In 1997, IMC Global, a large fertilizer producer, acquired Freeport-McMoRan Inc., the former parent company that now owned the sulfur and fertilizer businesses, in a $750 million transaction. Shareholders of Freeport-McMoRan received shares of IMC Global.
The Indonesian government asked Freeport to substantiate Bre-X's claims of having found the largest gold mine ever discovered. In 1997, the company announced that its prospective partner Bre-X did not have gold reserves at its Indonesian mine, as it had reported. Bre-X subsequently was exposed as a fraud and went bankrupt.
In 1998, low commodity prices forced the company to suspend its dividend.
In 2003, the company was subpoenaed as part of an investigation by anti-trust authorities in the United States, Canada, and Europe into price fixing in the copper industry.
In 2006, the company acquired Phelps Dodge and became the largest copper producer of any public company in the world. The corporate headquarters was moved from New Orleans, Louisiana to Phoenix, Arizona.
In 2012, the company announced agreements to acquire affiliated companies McMoRan Exploration Company and Plains Exploration & Production Company for a total enterprise value of over $20 billion. The transaction added significantly to the company's petroleum assets. The transactions were criticized as being a conflict of interest due to the common ownership of the companies. In 2015, the company paid $137.5 million in a settlement to resolve claims that executives and directors had conflicts of interest that resulted in the company overpaying in the transaction.
On December 28, 2015, the company announced that James R. Moffett would resign as chairman of the company and would be replaced by Gerald J. Ford. Moffett received $16.1 million in severance pay and cash retirement plans totaling more than $63 million. Moffett continued to consult for the company for annual fees of $1.5 million.
In August 2017, the company agreed to give a 51% interest in the Grasberg mine to the Government of Indonesia and agreed to build a smelter in exchange for receiving a special permit to operate the mine until 2041.
Environmental, human rights, and corruption controversies at the Grasberg Mine
In 2005, The New York Times reported that the company paid local military and police generals, colonels, majors and captains, and military units, a total of nearly US$20 million between 1998 and 2004. One individual received up to US$150,000. The payments were meant to secure the reserve. The company responded that the payments were not for individuals, but rather for infrastructure, food, housing, fuel, travel, vehicle repairs and allowances to cover incidental and administrative costs. According to the report, anonymous sources within the company also claimed that company chairman James R. Moffet courted Indonesia's dictator and "his cronies", cutting them in on deals. Another employee is said to have worked on a program to monitor environmentalists' e-mails and telephone conversations, in cooperation with Indonesian military intelligence officers.
The Grasberg mine's tailings "severely impacted" more than 11 square miles (28 km2) of rainforest, according to a 1996 Dames & Moore environmental audit. The report, endorsed by Freeport, also estimated that during the life of the mine 3.2 billion tons of waste rock—a great part of which generates acid—will be dumped into the local river system. Overburden (waste rock) from the mine has polluted a nearby lake due to acid mine drainage.
Citing extensive, long-term and irreversible environmental damage in New Guinea, The Government Pension Fund of Norway has excluded Freeport-McMoRan from its investment portfolio, following a recommendation from the fund's ethical council.
Human rights record in Indonesia
The company is a signatory participant of the Voluntary Principles on Security and Human Rights. However, the company has been accused of funding the Indonesian government to secure its reserve through militaristic oppression of the native West Papuan people.
Production at the mine has been affected by several strikes:
On October 17, 2011, the company halted operations in Papua amid a strike that led to a deteriorating security situation and intensified calls for Papuan independence. Seventy percent of Grasberg workers joined the strike, appealing for higher pay September 15, 2011, blocking roads, clashing with police and cutting the pipeline in several places.
In October 2014, around 1,000 workers stayed home and demanded the firing of 50 managers as a result of a fatal accident at the Grasberg mine. Production declined to 60-70% of normal levels as a result of the strike.
In 2017, 5,000 workers as the mine participated in a labor strike that lasted over 4 months.
Based on 2014 data, the Political Economy Research Institute ranked Freeport-McMoRan 13th among corporations emitting airborne pollutants in the U.S. The ranking is based on emission quantities and toxicity.
- "Freeport-McMoRan 2016 Form 10-K Annual Report]]".
- Freeport article, Handbook of Texas
- Holusha, John (September 14, 1994). "Langbourne Williams Is Dead; Retired Businessman Was 91". The New York Times.
- Texas State Historical Association: Sulfur Industry
- Sulfur: History, Technology, Applications, and Infrastructure
- FundingUniverse.com: Freeport-McMoRan Copper & Gold, Inc. History
- Sherritt - Moa Bay Nickel
- Freeport Closes Shop in Cuba
- "Freeport McMoRan: A Timeline". The Austin Chronicle. November 10, 1995.
- Opening the Ertsberg District
- "A Gold Rush in Nevada's Hills is Spurred by New Technology". The New York Times. April 22, 1981.
- "Freeport-Britoil". The New York Times. March 21, 1985.
- "Freeport-McMoran Is Selling More Assets". The New York Times. Reuters. December 18, 1990.
- "Shares Sold in Mining Unit". The New York Times. May 13, 1995.
- Myerson, Allen R. (July 29, 1997). "IMC to Buy Freeport-McMoran Inc. for $750 Million". The New York Times.
- "No gold at Bre-X site". CNNMoney. May 5, 1997.
- "Freeport Drops Dividend". Reuters. The New York Times. December 10, 1998.
- MELLER, PAUL (May 15, 2003). "U.S., Europe and Canada Investigate Copper Pricing". The New York Times.
- "Freeport-McMoRan Copper & Gold to Acquire Phelps Dodge, Creating the World's Largest Publicly Traded Copper Company" (Press release). Business Wire. November 19, 2006.
- "Freeport-McMoRan Copper & Gold Inc. to Acquire Plains Exploration & Production Company and McMoRan Exploration Co. in Transactions Totaling $20 Billion, Creating a Premier U.S. Based Natural Resource Company" (Press release). PRNewswire. December 5, 2012.
- SWANN, CHRISTOPHER; ALLISON, KEVIN (December 5, 2012). "Freeport's Deals Epitomize Industry's Conflicts of Interest". The New York Times.(subscription required)
- Stempel, Jonathan (January 15, 2015). "Freeport-McMoRan in $137.5 million settlement over purchases". Reuters.
- "Freeport-McMoRan Announces Agreement to Sell Eagle Ford Interests for $3.1 Billion" (Press release). Business Wire. May 7, 2014.
- "Freeport-McMoRan announces 460 jobs lost at Sierrita Mine". News 4 Tucson. November 5, 2015.
- Wiles, Russ (December 28, 2015). "Moffett resigns as Freeport-McMoRan chairman". The Arizona Republic.
- "Freeport-McMoRan Completes Sale of 13% Interest in Morenci Mine for $1.0 Billion in Cash" (Press release). Business Wire. May 31, 2016.
- Sanderson, Henry (August 29, 2017). "Indonesia takes majority stake in Freeport-McMoRan copper mine". Financial Times.
- EMONT, JON (August 29, 2017). "Freeport to Give Indonesia a Majority Stake in Its Grasberg Mine". The New York Times.(subscription required)
- Rachman, Anita (August 29, 2017). "Freeport to Give Up Majority Stake in Indonesia's Grasberg Mine". The Wall Street Journal.(subscription required)
- Perlez, Jane; Bonner, Raymond (December 27, 2005). "Below a Mountain of Wealth, a River of Waste". The New York Times.
- Bryce, Robert (September 1996). "Spinning Gold". Mother Jones Magazine.
- "Two companies - Wal-Mart and Freeport - are being excluded from the Norwegian Government Pension Fund - Global's investment universe". Norwegian Ministry of Finance. June 6, 2006.
- Somba, Nethy Dharma (October 18, 2011). "Freeport halts work amid sabotage, separatist pleas". The Jakarta Post.
- Asmarini, Wilda; Kapa, Dennys (October 28, 2014). "Freeport Indonesia copper mine output drops due to strike -govt". Reuters.
- Asmarini, Wilda; Taylor, Susan (July 21, 2017). "Freeport Indonesia mine workers extend strike for fourth month". Reuters.
- "Toxic 100 Air Polluters Index (2016 Report, Based on 2014 Data)". Political Economy Research Institute.
- Schleifstein, Mark (April 30, 2012). "Freeport-McMoRan to pay $6.8 million to settle pollution complaints". The Times-Picayune.