Freeport-McMoRan
| Company type | Public |
|---|---|
| Industry | Mining |
| Predecessor | Freeport Sulphur Company, McMoRan Oil and Gas Company |
| Founded | July 12, 1912 in Freeport, Texas, United States |
| Founder | Eric Pierson Swenson and investors |
| Headquarters | Phoenix , United States |
Area served | Worldwide |
Key people | Gerald J. Ford (Chairman) |
| Products | Copper, gold, molybdenum, sulfur (historically) |
| Website | www |
Freeport-McMoRan Inc. (commonly known as Freeport) is a mining corporation based in the Freeport-McMoRan Center located in Phoenix, Arizona. It holds the distinction of being the leading global producer of molybdenum, a significant copper supplier, and operates the Grasberg mine in Papua, Indonesia, which is recognized as the largest gold mine worldwide.
History
The origins of Freeport trace back to July 12, 1912, when Eric Pierson Swenson and a group of investors established the Freeport Sulphur Company to exploit sulfur deposits at the Bryan Mound salt dome along the Gulf Coast of the United States. The city of Freeport, Texas, was founded to facilitate these operations and to develop a port capable of competing with Galveston and Corpus Christi. By leveraging the Frasch process—whose patents had expired by 1908—Freeport transformed sulfur extraction by mechanizing access to previously unreachable deposits with reduced operational expenses.
Freeport Texas Company
In 1913, the Freeport Texas Company was formed as a holding entity to consolidate assets related to sulfur mining activities. Leadership included founder Eric P. Swenson as President, alongside board members from influential business families. The company secured funding through multiple stock offerings and convertible bonds, culminating in its listing on the New York Stock Exchange in 1919.
Freeport Texas established essential infrastructure such as ports, rail lines, and power generation facilities to underpin its mining endeavors. Its subsidiaries managed sulfur logistics, utilities including water and electricity, and oil refining operations. During the 1920s, the company transitioned its energy usage from oil to natural gas, achieving notable cost reductions.
Between the 1920s and 1950s, Freeport Sulphur expanded sulfur production capacity by acquiring additional mines in Texas and Louisiana. The company also diversified into nickel mining during World War II and launched Freeport Oil Company in the 1950s. In 1959, it confirmed the presence of copper and gold deposits at Ertsberg (later known as Grasberg) in Netherlands New Guinea.
Leadership Changes and Diversification
From 1928 to 1931, Langbourne Williams Jr. orchestrated a proxy battle resulting in his ascendancy to president in 1931. Under his guidance, Freeport broadened its portfolio by acquiring manganese mining operations in Cuba.
During the 1960s, following the nationalization of its Cuban nickel assets under Fidel Castro’s regime, Freeport redirected efforts toward kaolin extraction and expanded its presence in Australia through Freeport of Australia.
Mergers and Acquisitions
The McMoRan Oil and Gas Company was established in 1967 by petroleum geologists William McWilliams Jr., James Moffett, and Mack Rankin. A merger between McMoRan and Freeport Minerals Company (the successor to Freeport Sulphur) occurred in 1981, creating Freeport-McMoRan.
Headquarters relocated to New Orleans in 1985 as the company divested oil and gas properties to fund development at Grasberg mine. In 1995, RTZ (which later became Rio Tinto) invested $450 million into the firm. Subsequently, IMC Global purchased Freeport-McMoRan’s sulfur and fertilizer divisions for $750 million in 1997.
In 2007, Freeport-McMoRan acquired Phelps Dodge for $25.9 billion, propelling it to become the largest publicly traded copper producer globally and moving its corporate headquarters to Phoenix.
Recent Developments
In 2012, Freeport expanded its petroleum portfolio by acquiring McMoRan Exploration Company along with Plains Exploration & Production Company for more than $20 billion. These transactions faced scrutiny over potential conflicts of interest resulting in a $137.5 million settlement agreed upon in 2015.
The company divested Eagle Ford shale assets for $3.1 billion in 2014 and implemented workforce reductions at its Sierrita Mine amid commodity price downturns in 2015.
Leadership transitions included James R. Moffett stepping down as chairman in 2015 with a significant severance package; Gerald J. Ford succeeded him.
Between 2016 and 2017, Freeport sold its stake in Morenci Mine for $1 billion cash and divested deepwater assets to Anadarko Petroleum. Additionally, it consented to transfer majority ownership of Grasberg mine to Indonesia’s government by 2018 to maintain operational licensing.
Current Operations
Freeport continues to hold the position as the foremost global producer of molybdenum and a major supplier of copper. In 2019, copper generated 79% of the company’s total revenue, followed by gold at 11%, and molybdenum contributing 8%. The company's worldwide assets encompass:
- Africa: Previously owned the Kisanfu copper-cobalt project in the Democratic Republic of Congo until its divestment to China Molybdenum in 2020; the cobalt processing facility in Finland was sold to Umicore in 2019.
- North America: Operates several wholly owned copper and molybdenum mines located in Arizona (Bagdad, Miami, Morenci [72%], Safford, Sierrita), Colorado (Climax molybdenum mine), and New Mexico (Chino, Tyrone).
- South America: Holds majority ownership interests in El Abra (Chile) and Cerro Verde (Peru).
- Europe: Runs the Atlantic Copper refinery situated in Huelva, Spain.
- Indonesia: Maintains a 49% stake in the Grasberg mine.
Sulfur Mines
Freeport was an early adopter of the Frasch process for sulfur extraction, commencing operations at Bryan Mound in 1912. Production levels fluctuated due to strategic pauses intended to manage inventory. The company expanded its sulfur mining portfolio with operations at Hoskins Mound (Texas), Grand Ecaille (Louisiana), Garden Island Bay—which represented the largest new mine following Grand Ecaille—Grand Isle (the first offshore sulfur mine), Bay Ste. Elaine (notable for pioneering seawater use in Frasch mining), as well as Nash, Chacahoula, and Lake Pelto mines. These sites played a significant role during mid-20th century growth phases.
Metal Mines
Between 1931 and 1947, Freeport controlled manganese deposits near Santiago de Cuba through its acquisition of Cuban-American Manganese Corporation but exited the market after reserves were exhausted.
The Jerritt Canyon gold mine in Nevada was operated jointly with FMC Corporation beginning in 1981. Subsequent divestitures transferred ownership across multiple entities until its sale amid Canadian bankruptcy proceedings.
In May 2016, Freeport agreed to sell its interest in TF Holdings—including ownership of the Tenke Fungurume Mine—to China Molybdenum for $2.65 billion plus contingent payments. The Kisanfu exploration project was later sold separately in December 2020.
Past Board Members
Distinguished former board members include Henry Kissinger, John Hay Whitney—who served as chairman following a proxy contest in 1931—Robert A. Lovett, Benno C. Schmidt Sr., Augustus Long, Arleigh Burke, J. Stapleton Roy, Godfrey Rockefeller, and Jean Mauzé.
Safety Record
In 2011, Freeport faced penalties from the U.S. Mine Safety Administration after a workplace fatality that was linked to insufficient hazard warnings.
Grasberg Mine
Operating Papua Indonesia’s Grasberg mine—the largest gold mine worldwide—has subjected Freeport to several controversies:
- A deadly landslide occurred in 2003 initially attributed to operational negligence.
- Reports by The New York Times in 2005 alleged payments amounting to nearly $20 million made to Indonesian military and police officials to maintain operational security.
- Environmental degradation caused by tailings disposal has impacted over eleven square miles of rainforest.
- Norway’s Government Pension Fund excluded Freeport due to environmental concerns.
- In 2013, a tunnel collapse resulted in the deaths of 28 workers amid accusations of negligence directed at Indonesian authorities.
These challenges have affected Freeport’s corporate image despite its prominent standing as a leading entity within the global mining industry.
Human rights situation in Indonesia
As a participant in the Voluntary Principles on Security and Human Rights, Freeport-McMoRan has been criticized for allegedly collaborating with the Indonesian government to maintain control over its mineral reserves through military suppression of the indigenous West Papuan populations. Since its establishment in 1967, Freeport's interactions with the Amungme and Kamoro groups have been contentious. The corporation is accused of causing destruction to approximately 30,000 hectares of rainforest and contaminating two principal rivers, which are essential for the communities' cultural practices and sustenance. Tensions involving the tribal groups, Freeport, and Indonesian armed forces have escalated into violent episodes, including fatalities and mistreatment of defenseless locals, some of whom have aligned themselves with the Free Papua Movement insurgency.
Environmental performance
In 2014, the Political Economy Research Institute placed Freeport-McMoRan 13th among American companies based on the volume and toxicity of airborne pollutants emitted.
At the Cyprus Tohono mine site, contamination from uranium and sulfate prompted authorities to supply bottled water to residents of North Komelik until 2003, when new wells were developed. The use of chemical reagents during mining led to pollution of groundwater within the "basin-fill aquifer," a vital source of potable water for the Tohono O'odham Nation.
The City of Blackwell initiated legal action against Freeport-McMoRan in 2009 due to pollution originating from its Zinc Smelter, which adversely affected public health among its population of 7,200. The company resolved this matter by paying $54 million in 2010 and later agreed to an additional $119 million settlement with local residents in 2012.
In April 2012, Freeport agreed to pay $6.8 million to resolve federal and state allegations concerning hazardous discharges from its Morenci mine located in Arizona, which had detrimental effects on water quality, soil conditions, ecosystems, and wildlife habitats.
Carbon footprint
For the twelve-month period ending December 31, 2020, Freeport-McMoRan Inc reported total CO2e emissions (combining direct and indirect sources) amounting to 7,116 kilotonnes, marking an 8.4% reduction compared to the previous year. This downward trend in emissions has been consistent since 2015, reflecting the company's ongoing commitment to sustainability initiatives and environmental stewardship.
| Dec 2015 | Dec 2016 | Dec 2017 | Dec 2018 | Dec 2019 | Dec 2020 |
|---|---|---|---|---|---|
| 10,136 | 8,994 | 7,956 | 8,126 | 7,769 | 7,116 |