Freeport CEO: Surprised By Humala Peru Win, Not Discouraged
21 Juli 2011 - 7:26PM
Dow Jones News
A surprise change of government in Peru has not discouraged
Freeport-McMoRan Copper & Gold Inc. (FCX), Chief Executive
Richard Adkerson said on the company's conference call.
Freeport is poised for a major expansion at its Cerro Verde
copper and molybdenum mine in Peru, with capital costs of $3.5
billion and completion set for 2016.
Peru's President-Elect Ollanta Humala ran on a platform of
higher mining taxes, and has been considered a threat to the
country's booming resource sector.
"The election was a surprise. Humala wasn't expected to win,"
Adkerson said. "We're going forward with our expansion plans...it's
a question of time-will-tell, but we're not discouraged with where
we stand."
The plan is to expand Cerro Verde's mining rate to 850,000
metric tons a day, from current levels of 320,000 tons, and boost
milling capacity to 360,000 tons per day from current rates of
around 120,000 tons.
The expansion would increase Cerro Verde's copper output to 600
million pounds of copper and 15 million pounds of molybdenum per
year.
Freeport has a tax stability agreement in place for Cerro Verde,
which exempts the mine from royalty payments until it expires in
2013. Freeport has expressed interest in renewing this agreement,
and Adkerson said he looks forward to negotiations with the newly
named mining minister.
"There's been a few very encouraging public comments that Humala
has made," Adkerson said. "This is unfolding and we have to monitor
what goes on."
Freeport-McMoRan is the world's largest listed copper mining
company.
-By Tatyana Shumsky, Dow Jones Newswires; 212-416-3095;
tatyana.shumsky@dowjones.com
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