Freeport-McMoRan has cut operating rates at its Sierrita copper-molybdenum mine in the US and is assessing the possibility of mothballing the unit completely, the US miner said Thursday.
"During October 2015, FCX initiated a plan to reduce operating rates at its Sierrita mine in Arizona in response to low copper and molybdenum prices," the company said in its third-quarter results statement.
"Initially, the plan involves operating the Sierrita mine at 50% of its current operating rate," Freeport said, adding that it was "also evaluating the economics of a full shutdown."
The impact of a 50% curtailment is around 100 million lb/year of copper and 10 million lb/year of molybdenum, the company said, adding that combined with previously announced curtailments at its various operations, the consolidated impact is an aggregate reduction of 250 million lb/year of copper and 20 million lb/year of molybdenum.
In August, Freeport announced a range of adjustments to mining plans at its operations in North and South America.
The company operates seven open-pit copper mines in North America: Morenci, Bagdad, Safford, Sierrita and Miami in Arizona, and Chino and Tyrone in New Mexico.
Revised plans in North America announced earlier include reductions in mining rates to cut operating and capital costs, including the suspension of mining operations at its Miami mine (which produced 57 million lb in 2014), a 50% reduction in mining rates at the Tyrone mine (which produced 94 million lb) and adjustments to mining rates at other US mines.
In South America Freeport operates two copper mines, Cerro Verde in Peru and El Abra in Chile.
The revised operating plans for 2016 for the South America copper mines principally reflect adjustments to the mine plan at El Abra (which produced 367 million lb in 2014) to reduce mining and stacking rates by about 50% to achieve lower operating and labor costs, defer capital expenditure and extend the life of the existing operations.
Also in August, Freeport announced plans to operate its Henderson primary molybdenum mine in Colorado at a lower rate, resulting in a 35% reduction in Henderson's previous annual production estimate of 27 million lb.
Copper sales volumes from Freeport's North America mines of 483 million lb in the third quarter were higher than Q3 2014 sales of 436 million lb, primarily reflecting higher milling rates and ore grades at Morenci and Chino, and higher ore grades at Safford, the company said.
North American copper sales are estimated at approximately 1.95 billion lb for 2015, compared with 1.66 billion lb in 2014, it said.
