|Traded as||NYSE: FCX|
S&P 500 Index component
|Industry||Metals and Mining|
|Founder||Eric Pierson Swenson, et al|
|Gerald J. Ford, Chairman|
Richard Adkerson, President & CEO
Kathleen L. Quirk, CFO
|Revenue||$15.86 billion (2017)|
|$3.633 billion (2017)|
|$1.81 billion (2017)|
|Total assets||$37.302 billion (2017)|
|Total equity||$7.977 billion (2017)|
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.
|Footnotes / references|
- 1 Current operations
- 2 Past holdings
- 3 History
- 3.1 Board members
- 3.2 Early history
- 3.3 Freeport Texas Company
- 3.4 1928 - 1931 shareholder proxy fight
- 3.5 1930s
- 3.6 1950s
- 3.7 1960s
- 3.8 1970s
- 3.9 1980s
- 3.10 1990s
- 3.11 2000s
- 3.12 2010s
- 3.13 Environmental, human rights, and corruption controversies at the Grasberg Mine
- 3.14 Environmental record
- 4 References
- 5 External links
Freeport is the largest producer of molybdenum, and second largest producer of copper, in the world. In 2015, 67% of its revenues were from the sale of copper, 11% from the sale of petroleum, 10% from the sale of gold, and 5% from the sale of molybdenum. In 2015, sales to Phillips 66 accounted for 7% of the total revenues of the company.
Some of the company's mining operations are as follows:
Freeport Cobalt holds a 100% interest in Kisanfu, a copper and cobalt exploration project located near Tenke. This subsidiary also owns a large cobalt refinery in Kokkola, Finland, along with a related sales and marketing business. FCX has an effective 56% of that enterprise. Negotiations in 2016 to include these cobalt projects in a sale to China Molybdenum of Tenke Fungurume Mine--a cobalt/copper mine in DRC Congo--in did not bear fruit.
- 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)
- Jerrit Canyon mine produces gold about 50mi north of Elko, Nevada. Originally a joint venture of Freeport McMoRan (FCX) with FMC, then with FMC Gold then Meridian Gold, Freeport's share of Jarrett Canyon Gold then sold to Independence Mining Co., a subsidiary of Minorco. Minorco later sold all its mining assets to AngloGold. AngloGold Ltd and Meridian Gold sold their shares of the mine to Queenstake Resource Ltd. in 2003. Yukon-Nevada, which became Veris Gold, was a subsidiary of Queenstake, and owned 80% of Veris Gold to the 20% of Whitebox Asset Management. Veris Gold had been operating under U.S. Bankruptcy Code and the Companies’ Creditors Arrangement Act bankruptcy protections of Canada since June 9, 2014. Sprott Mining bought the concern after the Canadian bankruptcy court ordered Veris to sell its assets.
- In May 2016 Freeport announced an agreement to sell its interests in TF Holdings to China Molybdenum Co., Ltd. (CMOC) for $2.65 billion in cash and possivly more if the average copper price rose enough to trigger the increase in the following 24 months. TF Holdings was a Bermuda holding company with indirect ownership of 80% of Tenke Fungurume Mine. Since FCX had owned 70% ownership of TF Holdings, the sale gave China Molybdenum a 56% interest in Tenke Fungurume Mine. The parties discussed including Kokkola refinery and Kisanfu Exploration in the sale, but did not agree on the terms to do so.
The current company was created in 1981 through the merger of Freeport Minerals, formerly Texas Freeport Sulphur Company and McMoRan Oil & Gas Company, becoming Freeport-McMoRan Inc.
Past board members include Henry Kissinger (1995 - 2001), John Hay Whitney, Robert A. Lovett, Benno C. Schmidt Sr. (1954 - 1967), Gus Long, Arleigh Burke, J. Stapleton Roy, Godfrey Rockefeller and his cousin-in-law, Jean Mauzé.
Freeport Sulphur Company was founded July 12, 1912 by the eldest son of Svante Magnus "E.M." Swenson, banker Eric Pierson Swenson, with a group of investors, to develop sulfur mining at Brian Mound salt dome, along the US Gulf Coast. Freeport, Texas was also established in Nov. 1912 to house workers, and serve as a port for Houston, rivaling Galveston and Corpus Christi.
Freeport mined sulphur along the Gulf Coast using the Frasch Process, the patents for which had expired in 1908. Previously, Union Sulphur Company founder and patent-holder Herman Frasch had enjoyed a monopoly on the process. The company became known as Freeport Sulphur, later changing its corporate name to Freeport Minerals.
Freeport Texas Company
Enterprise to support Freeport Sulphur's business and the new town's infrastructure led to the incorporation of a holding company on September 30, 1913, to join the newer assets with Freeport Sulphur. Officers of the new holding company, Freeport Texas Company, were:
- Eric. P. Swenson, President and Director (Freeport Sulphur founder, son of Swante M. Swenson)
- Edward E. Dickinson, Vice-President and Director
- F.M. Altz, Secretary
- Swante M. Swenson, Treasurer (son of Eric P. Swenson)
- Charles H. Findlay, Auditor (son of Hugh Findlay and his third wife, Mary Ellen Smith)
- Richard H. Williams, Director (son of Richard H. Williams)
- Harry K. Knapp, Director
- Samuel McRoberts, Director
- Charles P. Northrop, Director
- Charles A. Stone, Director
- Frank A. Vanderlip, Director
- Sidell Tilghman, Director (son of General Lloyd Tilghman)
- Eppa Hunton, Jr., Director (son of late Virginia Senator, Brig, Gen. Eppa Hunton)
- Charles E. Herrmann, Director.
The new corporation's principal assets were listed as:
- Freeport Sulphur
- Freeport Gas Co.
- Freeport Sulphur Transportation Company
- Freeport Town Site Co.
- Freeport Terminal Co.
- Freeport Light, Water & Ice Co.
- South Texas Stevedore Co.
- La Espuela Oil Co.
- Société pour l'Importation et la Vente des Soufres
- Houston & Brazoz Valley Ry
In 1919, minority stockholders John R. Williams & Sons, First National Bank of Richmond, Virginia vice-president, W. M. Addison, Benjamin P Alsopp, E. L. Norton, and Samuel W. Travers solicited proxies to use at the April 5th annual stockholders' meeting, claiming, according to reports, that "management has refused them adequate information regarding the property. President E.P. Swenson denies that information as been thus withheld and states that the board, which represents the dominant interests, has no vacancies at the present time."
in 1928, shareholder and scion of one of the founding investment firms, John Langbourne Williams & Sons, Langbourne Meade Williams, Jr. launched a proxy fight for control of the company. In 1929, he then sought help from his former supervisor at Lee, Higginson & Co., J.T. Claiborne, who then enlisted clerk John Hay Whitney — who had become one of the wealthiest men in America following the 1927 death of his father, Payne Whitney. Williams eventually gained control of the company from founder Swenson, becoming its president in 1931, with Claiborne as a Vice-President, and Whitney as Chairman. Williams also served as Chairman during 1958 - 1967.
In 1932, Freeport Sulphur Company acquired the sulphur rights for Lake Grande Ecaille and vicinity in Plaquemines Parish, Louisiana, and escalated the development of sulphur deposits in the Grand Ecaille dome in 1933, still using the Frasch Process developed by Dr. Herman Frasch, who had, in 1895, enjoined the American Sulphur Company into a partnership, forming the Union Sulphur Company, to initiate the first successful sulphur mining at Grand Ecaille, with which Freeport, like other competitors, would compete upon expiry of the Frasch patents in 1908. From its earliest inception, sulphur mining was the catalyst that developed Port Sulphur, Louisiana.
The company produced nickel during World War II and potash in the 1950s. In 1955, Freeport Nickel invested $119 million, of which $100 million came from the U.S. government, into construction of 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 to buy nickel and cobalt from the company.
In 1956, the company formed the Freeport Oil Company. In 1958, the company sold an oil discovery near Lake Washington in Louisiana for approximately $100 million to Magnolia Petroleum Company.
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 what was then called the Netherlands New Guinea.
- In 1960, Fidel Castro implemented a 25% ore tax, effectively nationalizing and seizing Freeport's nickel-mining operations in Cuba.
- In 1961, the company entered the kaolin business after purchasing the assets of Southern Clays Inc. In 1964, the company formed Freeport of Australia to pursue mining opportunities there and in the surrounding Pacific Ocean region.
Development of the Ertsberg deposit
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 1969, McMoRan Exploration Company was founded, which, in 1981, would merge with Freeport Minerals, formerly Freeport Sulphur, to form Freeport-McMoRan.
In 1971, the company changed its name to Freeport Minerals Company, (not to be confused with Freeport Minerals Corporation, founded in 1834).
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 about the micro-paleontology of the Louisiana and Texas coasts.
In 1981, the company formed a 70/30 joint venture with an affiliate of FMC Corporation to operate a gold mine in Jerrit Canyon, Nevada. 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 headquarters moved to New Orleans, Louisiana. The company also sold a 25% interest in some[which?] 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.
On March 19, 2007, 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 transaction was criticized as a conflict of interest due to the common ownership of the companies. In 2015, the company paid a $137.5 million settlement to resolve claims that executives and directors had conflicts of interest that resulted in the company overpaying in that transaction.
In 2014, the company sold its assets in the Eagle Ford shale to Encana for $3.1 billion. In 2015, the company announced job cuts at its Sierrita Mine in Arizona due to low copper and molybdenum prices.
On December 28, 2015, the company announced that James R. Moffett would resign as chairman of the company and 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 build a smelter in exchange for a special permit to operate the mine until 2041.
In 2018, the company ranked at number 176 on the Fortune 500 list. During this year, Indonesian president Joko Widodo also planned to take control of 51% of Freeport Indonesia's equity, effectively handing over control of Freeport Control to Indonesian government. The Indonesian government will need to settle payments of $3.85 billion during the takeover process. The Indonesian government planned to finalize the process on the middle of December 2018.
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 at 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. In 2012, the company paid a $6.8 million fine to the United States Department of the Interior for pollution at the company's Morenci copper mine in southeastern Arizona.
- "Freeport-McMoRan 2016 Form 10-K Annual Report]".
- "Freeport-McMoRan 2017 Form 10-K Annual Report" (PDF). p. 57].
- Nicole Mordan (February 26, 2018). "Miner Freeport says no plans to sell Congo cobalt asset as buyers circle". Reuters.
- Freeport McMoRan (May 9, 2016). "Freeport-McMoRan Announces Agreements to Sell its Interests in TF Holdings Limited for $2.65 Billion in Cash and Up to $120 Million in Contingent Consideration; and to Enter Exclusive Negotiations for the Sale of its Interests in Freeport Cobalt and Kisanfu Exploration Project for $150 Million". [EX-99.1 3 exhibit99105-09x2016.htm EXHIBIT 99.1] (Press release). US Securities and Exchange Commission.
- MARIANNE KOBAK McKOWN (Jun 26, 2015). "GOING PRIVATE: Canadian billionaire buys Jerritt Canyon". Elko Daily Free Press.
- Poor's Poor's Government and Municipal Supplement, Poor's Publishing Company, 1922, page 760.
- Freeport article, Handbook of Texas
- Haynes, Williams (1959). Brimstone, The Stone That Burns: The Story Of The Frasch Sulphur Industry. Princeton, N.J.: D. Van Norstrand Company, Inc. pp. 75–85.
- Texas State Historical Association: Sulfur Industry
- Hazleton, Jared "The Economics of the Sulphur Industry, Routledge, 2016, page 204.
- Poor's Poor's Government and Municipal Supplement, Poor's Publishing Company, 1922, page 760.
- Dana & Co.The Commercial and Financial Chronicle (Weekly), Volume 110, Part 2, William B. Dana Company, New York, 1920, page 760. Retrieved March 2, 2018.
- Poor's Poor's Government and Municipal Supplement, Poor's Publishing Company, 1922, page 758. Accessed March 2, 2018.
- Dana & Co. The Commercial and Financial Chronicle, Volume 110, Part 2, William B. Dana Company, 1920, page 1418. Retrieved March 21, 2018.
- NYTimes "JOHN HAY WHITNEY DIES AT 77; PUBLISHER LED IN MANY FIELDS", New York Times, February 9, 1982.
- "John Hay Whitney Elevated". The New York Times. 24 March 1934. Retrieved 1 December 2016.
- Holusha, John (September 14, 1994). "Langbourne Williams Is Dead; Retired Businessman Was 91". The New York Times.
- Peas, L, et al The assassinations: Probe magazine on JFK, MLK, RFK and Malcolm X, by James DiEugenio, Lisa Pease and Judge Joe Brown, 2003. ISBN 0922915822.
- Sulfur: History, Technology, Applications, and Infrastructure
- City of Sulphur "History of Sulphur". Retrieved October 11, 2018.
- Culbertson, Manie Louisiana: The Land and Its People, Pelican Publishing, USA, 1998, p. 49. Retrieved October 11, 2018.
- 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.
- Holusha, John "Langbourne Williams Is Dead; Retired Businessman Was 91", New York Times, September 14, 1994.
- Sherritt - Moa Bay Nickel
- 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". CNN. May 5, 1997.
- "Freeport Drops Dividend". The New York Times. Reuters. 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). PR Newswire. 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 (help)).
- 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 (help)).
- Rachman, Anita (August 29, 2017). "Freeport to Give Up Majority Stake in Indonesia's Grasberg Mine". The Wall Street Journal. (Subscription required (help)).
- "Freeport-McMoRan". Fortune. Retrieved 2018-11-22.
- Post, The Jakarta. "Freeport divestment to be completed by end of this year: Jokowi". The Jakarta Post. Retrieved 2018-12-13.
- Kusuma, Hendra. "Freeport Kembali ke Pangkuan Ibu Pertiwi Pertengahan Desember 2018?". detikfinance. Retrieved 2018-12-13.
- 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.