Freeport-McMoRan Copper & Gold, Inc.

Freeport-McMoRan Inc.

Company type	Public
Industry	Mining
Predecessor	Freeport Sulphur Company, Freeport Texas Company, McMoRan Oil and Gas Company, Freeport Minerals Company
Founded	July 12, 1912 (1912-07-12) in United States
Founder	Eric Pierson Swenson and investors
Headquarters	Phoenix , United States
Area served	Global
Key people	James R. Moffett (former Chairman)
Products	Copper, gold, molybdenum, cobalt
Website	www.fcx.com

Freeport-McMoRan Inc., often referred to simply as Freeport, is a mining corporation based in the Freeport-McMoRan Center located in Phoenix, Arizona. It stands as the top global producer of molybdenum, ranks among the foremost copper producers worldwide, and manages the largest gold mine on the planet, the Grasberg mine situated in Papua, Indonesia.

History

The origins of Freeport trace back to July 12, 1912, when Eric Pierson Swenson—son of banker Svante Magnus "E.M." Swenson—and a group of investors established Freeport Sulphur Company to exploit sulfur deposits at the Bryan Mound salt dome along the Gulf Coast of the United States. To accommodate laborers and develop port infrastructure, the community of Freeport, Texas was founded. The firm adopted the Frasch process, an automated sulfur extraction technique whose patent had expired in 1908, thereby transforming conventional sulfur mining methods.

Freeport Texas Company

In 1913, Freeport Texas Company was formed as a holding entity to unify Freeport Sulphur and associated assets into a vertically integrated mining enterprise. Leadership roles included Eric P. Swenson as President and Swante M. Swenson serving as Treasurer. The corporation secured funding through multiple rounds of stock sales and bond issuances spanning from 1913 to 1933.

To support its mining activities, the company developed critical infrastructure such as port facilities, rail lines including the Houston & Brazos Valley Railway, and power generation plants. Additionally, Freeport Sulphur broadened its shipping operations by establishing subsidiaries focused on oil transportation and sulfur logistics.

From the 1920s through the 1950s, Freeport Texas Company maintained a consistent pattern of dividend payments and stock splits aimed at fostering corporate growth. It gained listing on the NYSE starting in 1919 and featured on the Fortune 500 list several times during the mid-20th century.

Among its subsidiaries were Atlantic Copper S.A., PT Freeport Indonesia (holding 49%), and PT Irja Eastern Minerals.

Diversification and Expansion

In the late 1920s, Langbourne Meade Williams Jr. orchestrated a proxy contest that secured his control by 1931, initiating expansion into manganese resources located in Cuba. That same year, Freeport acquired Cuban-American Manganese Corporation, leveraging tariff benefits despite facing substantial import taxes.

Throughout the 1930s, Freeport broadened its sulfur extraction operations with new projects in Louisiana's Grand Ecaille region and transitioned from a holding company structure to an operating company model to enhance tax efficiency.

During the Korean War era in the 1950s, Freeport invested $25 million to develop additional sulfur mines as part of national defense efforts. The company also ventured into nickel production backed by significant government funding in Cuba until these assets were nationalized in 1960.

Oil exploration activities expanded following the establishment of Freeport Oil Company in 1956, culminating in asset divestitures totaling roughly $100 million.

In 1959, geological surveys verified substantial copper and gold reserves at Ertsberg—later known as Grasberg mine—in Dutch New Guinea.

1960s–1980s: Expansion in Mining and Corporate Consolidation

Following the nationalization of its Cuban nickel holdings in 1960, Freeport diversified into kaolin extraction starting in 1961 and established Freeport of Australia in 1964 to capitalize on opportunities within the Pacific region.

The development of the Ertsberg deposit commenced in 1967, involving intricate infrastructure projects such as constructing access roads, installing aerial tramways, and laying slurry pipelines, with total expenditures approaching $200 million. Although these engineering feats were successful, initial profitability was hindered by depressed copper market prices.

Also in 1967, McMoRan Oil and Gas Company was founded by William Kennon McWilliams Jr., James Robert Moffett, and Mack Rankin. This entity merged with Freeport Minerals Company in 1981, resulting in the formation of Freeport-McMoRan.

Throughout the 1980s, Freeport pursued joint ventures including operations at the Jerritt Canyon gold mine and relocated its corporate headquarters to New Orleans. Additionally, it divested certain oil and gas assets to fund development activities at the Grasberg mine.

1990s–2000s: Corporate Realignment and Strategic Acquisitions

In 1995, Freeport separated its stake in Freeport-McMoRan Copper & Gold, the proprietor of the Grasberg mine. That same year, RTZ (now Rio Tinto) made a $450 million investment.

By 1997, IMC Global purchased Freeport-McMoRan Inc.'s sulfur and fertilizer divisions for $750 million.

Freeport played a key role in uncovering fraudulent claims by Bre-X concerning Indonesian gold deposits during 1997.

Due to declining commodity prices, the company suspended dividend payments in 1998.

In 2003, Freeport was subject to antitrust scrutiny regarding allegations of copper price manipulation.

The acquisition of Phelps Dodge for $25.9 billion in 2007 elevated Freeport to the position of the largest publicly traded copper producer worldwide and prompted relocation of its headquarters to Phoenix.

2010s: Focused Acquisitions and Asset Sales

In 2012, Freeport expanded its petroleum portfolio by acquiring McMoRan Exploration Company and Plains Exploration & Production Company for over $20 billion. These transactions attracted conflict-of-interest allegations, culminating in a $137.5 million settlement in 2015.

The company divested Eagle Ford shale assets for $3.1 billion in 2014 and implemented workforce reductions at the Sierrita Mine due to commodity price challenges.

Leadership transitions included Chairman James R. Moffett stepping down in December 2015; his severance package exceeded $79 million, inclusive of consulting fees.

In 2016, Freeport sold a 13% stake in the Morenci Mine to Sumitomo Group for $1 billion cash and also divested deepwater oil assets to Anadarko Petroleum.

A significant agreement with the Indonesian government was reached in August 2017, granting Indonesia majority ownership of the Grasberg mine through a special permit valid until 2041; this transfer was completed by December 2018.

Reflecting its industry prominence, the company was ranked #176 on the Fortune 500 list in 2018.

Current operations

Freeport continues as the foremost global producer of molybdenum and remains a leading supplier of copper. In 2019, its revenue composition was predominantly copper (79%), followed by gold (11%) and molybdenum (8%). Sales figures include substantial volumes processed through a copper refining joint venture located in Gresik Regency, accounting for approximately 13% of total revenue.

Global Mining Operations

• Africa: Manages the copper-cobalt exploration initiative Kisanfu near Tenke in the Democratic Republic of Congo; owns a cobalt processing facility located in Kokkola, Finland. After unsuccessful negotiations to sell cobalt assets, the Kisanfu project was transferred to China Molybdenum in 2020.
• Europe: Disposed of its joint venture cobalt refinery asset in Kokkola by selling it to Umicore in December 2019.
• North America:
  • Arizona: Fully owns Bagdad, Miami, Safford, and Sierrita mines (including Twin Buttes & Esperanza); holds a 72% stake in Morenci.
  • Colorado: Entire ownership of Climax and Henderson molybdenum mines.
  • New Mexico: Complete ownership of Chino and Tyrone mines.
• South America:
  • Controls majority shares in El Abra mine, Chile (51% ownership).
  • Holds majority interest in Cerro Verde mine, Peru (54% ownership).
• Europe:
  • Owns Atlantic Copper refinery in Huelva, Spain outright.
• Indonesia:
  • Possesses an approximate 49% minority stake in the Grasberg mine, which produces copper, gold, and silver.

Sulfur mines

The company’s early focus was on sulfur extraction using the Frasch process at sites such as Bryan Mound and Hoskins Mound in Texas; Grand Ecaille, Garden Island Bay, Grand Isle offshore facility, Bay Ste. Elaine, Nash, Chacahoula, and Lake Pelto in Louisiana. These operations required significant infrastructure including power generation plants, pipelines for transporting molten sulfur, offshore platforms—the Grand Isle operation being the first offshore sulfur mine—and seawater injection technology to enhance recovery. Many of these mines operated under royalty agreements where oil companies like Texaco or Humble Oil retained a portion of the profits.

Metal mines

Historically, Freeport’s metal mining ventures included manganese extraction through the Cuban-American Manganese Corporation acquired in the early 1930s; this operation leveraged tariff benefits until depletion led to its closure by the late 1940s. The company also engaged in gold mining through joint ventures at locations such as Jerritt Canyon near Elko, Nevada before divesting these interests by the mid-2000s.

In May 2016, Freeport agreed to sell its majority stake held via TF Holdings in the Tenke Fungurume Mine to China Molybdenum for $2.65 billion plus contingent payments; this transaction excluded cobalt refinery assets following unsuccessful negotiations. Subsequently, later that year, the Kisanfu project was sold separately for $550 million.

Past board members

Among notable former board members are distinguished figures including Henry Kissinger, John Hay Whitney, Robert A. Lovett, Benno C. Schmidt Sr., Gus Long, Admiral Arleigh Burke, diplomat J. Stapleton Roy, financier Godfrey Rockefeller, and his relative by marriage Jean Mauzé.

Safety record

In 2011, Freeport incurred penalties from the U.S. Department of Labor's Mine Safety and Health Administration after a fatal accident attributed to inadequate hazard signage at one of its facilities.

Grasberg Mine

Managing the world’s largest gold mining operation presents significant environmental and social difficulties for Freeport. A deadly landslide in 2003, attributed to negligence as determined by government investigations, marked one of several tragic events; later incidents include fatalities from sulfur gas exposure and a tunnel collapse in 2013 that claimed 28 workers’ lives.

Investigations uncovered payments approaching $20 million made between 1998 and 2004 to Indonesian military units, allegedly for security services. These transactions raised serious ethical questions regarding corporate conduct.

Environmental assessments have recorded extensive destruction of rainforest spanning over due to the disposal of tailings at Grasberg. Forecasts indicate that billions of tons of waste rock have been discharged into nearby rivers, resulting in acid drainage contamination.

Reflecting concerns about these environmental consequences, Norway’s Government Pension Fund removed Freeport from its investment holdings starting in June 2006 following ethical advisory recommendations.

Human rights organizations have censured Freeport for safety oversights connected to fatal accidents at the Grasberg facility, urging enhanced monitoring and operational safeguards.

Human rights record in Indonesia

As a participant in the Voluntary Principles on Security and Human Rights, Freeport-McMoRan has encountered allegations of collaborating with the Indonesian government to protect its mineral assets through military actions targeting indigenous West Papuan populations. Since commencing operations in Indonesia in 1967, Freeport has experienced strained relations with the Amungme and Kamoro communities. It is reported that approximately 30,000 hectares of rainforest and crucial waterways supporting local subsistence have been adversely affected. These environmental and cultural disturbances have intensified conflicts involving the indigenous groups, Freeport, and Indonesian military forces, with documented instances of violence against unarmed villagers and some locals joining resistance movements.

Environmental record

In 2014, the Political Economy Research Institute placed Freeport-McMoRan 13th among U.S. companies for airborne pollutant emissions based on both volume and toxicity.

At the Cyprus Tohono mine, contamination of groundwater by uranium and sulfate led to bottled water being supplied to residents of North Komelik until new wells were established in 2003. The mine’s chemical processing caused hazardous liquids to infiltrate a vital aquifer serving the Tohono O'odham Nation.

In 2009, Freeport-McMoRan was sued by the City of Blackwell over pollution from its Zinc Smelter that resulted in 58 million pounds of toxic waste impacting 7,200 inhabitants. The company reached a $54 million settlement in 2010 and later agreed to an additional $119 million payout to affected residents in 2012.

In April 2012, Freeport resolved federal and state claims concerning toxic emissions from its Morenci mine in Arizona by paying $6.8 million. These discharges caused damage to water bodies, soil quality, habitats, and wildlife.

Carbon footprint

For the year ending December 31, 2020, Freeport-McMoRan Inc reported total CO2e emissions (both direct and indirect) amounting to 7,116 kilotonnes, marking an 8.4% reduction compared to the previous year. Emissions have consistently declined since 2015, reflecting the company’s ongoing dedication to integrating sustainability into its operational framework.

Annual total CO2e emissions (Direct + Indirect) for Freeport-McMoRan Inc (kilotonnes)

Dec 2015	Dec 2016	Dec 2017	Dec 2018	Dec 2019	Dec 2020
10,136	8,994	7,956	8,126	7,769	7,116

External links

• NASA Earth Observatory Satellite Image of Grasberg Mine