Freeport McMoRan CEO: Cobalt Focus Led To Refinery Purchase
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Freeport McMoRan Copper & Gold Inc. (FCX) acquired a share in a cobalt refinery in the Democratic Republic of Congo as part of the company's continued focus on cobalt production, chief executive Richard Adkerson said.
Freeport is the world's largest producer of cobalt, a metal primarily used to strengthen steel. The company's continued focus on this leadership position led to the acquisition of a cobalt refinery, Mr. Adkerson said, speaking on Freeport's earnings conference call.
Freeport spent $325 million on a 56% ownership of the Kokkola cobalt refinery, in a deal expected to close in the second quarter of 2013. The deal calls for Freeport to spend another $110 million over three years, contingent on the refinery's performance.
The Kokkola refiner has the capacity to refine 100% of the planned cobalt output from Freeport's Tenke Fungurume mine in the DRC.
Freeport expanded Tenke's mining rates to 150,000 metric tons per day from 60,000 tons per day, and raised its milling rates to 14,000 tons per day.
Mr. Adkerson said the expansion at Tenke Fungurume is "substantially complete on time and on budget, which is a significant accomplishment."
Write to Tatyana Shumsky at tatyana.shumsky@dowjones.com
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