Per Freeport McMoran Copper and Gold (FCX) CEO Richard Adkerson, spending on energy accounts for about 25% of FCX's TOTAL Annual Costs.
While the company burns about 225 million gallons of diesel a year in operations, Mr. Adkerson believes Freeport's business is (positively) CORRELATED with rising energy costs...he believes the price of copper is being pressured UPWARDS by the same factors causing the price of crude oil to soar.
*FCX's Copper Margin:
FCX's Avg COST of producing Copper: $1.00/lb.
FCX's Avg PRICE realized selling Copper: $3.70/lb.
*FCX's 2007 Profits % Commodity Breakdown:
1. Copper: 78%
2. Molybdenum: 12%
3. Gold: 10%
*FCX's Consolidated Reserves as of 2007:
1. Copper: 93.2 billion lbs (21 years reserve life)
2. Molybdenum: 2.0 billion lbs (24 yrs reserve life)
3. Gold: 41.0 million ozs (22 yrs reserve life)
Lastly, while INDIA is FCX's fastest growing copper customer, India's consumption today only accounts for about 3% of the company's total annual production. In other words, between the slowly but surely emerging middle classes of China and India (some 2.5 billion people), Freeport McMoran offers some impressive LONG TERM earnings GROWTH visibility.
http://www.fcx.com/metals/downloads/GeoDiver_MAR08.pdf
Data Courtesy: CNBC interview, FCX.com.
Full Disclosure: I own shares of FCX.
While the company burns about 225 million gallons of diesel a year in operations, Mr. Adkerson believes Freeport's business is (positively) CORRELATED with rising energy costs...he believes the price of copper is being pressured UPWARDS by the same factors causing the price of crude oil to soar.
*FCX's Copper Margin:
FCX's Avg COST of producing Copper: $1.00/lb.
FCX's Avg PRICE realized selling Copper: $3.70/lb.
*FCX's 2007 Profits % Commodity Breakdown:
1. Copper: 78%
2. Molybdenum: 12%
3. Gold: 10%
*FCX's Consolidated Reserves as of 2007:
1. Copper: 93.2 billion lbs (21 years reserve life)
2. Molybdenum: 2.0 billion lbs (24 yrs reserve life)
3. Gold: 41.0 million ozs (22 yrs reserve life)
Lastly, while INDIA is FCX's fastest growing copper customer, India's consumption today only accounts for about 3% of the company's total annual production. In other words, between the slowly but surely emerging middle classes of China and India (some 2.5 billion people), Freeport McMoran offers some impressive LONG TERM earnings GROWTH visibility.
http://www.fcx.com/metals/downloads/GeoDiver_MAR08.pdf
Data Courtesy: CNBC interview, FCX.com.
Full Disclosure: I own shares of FCX.
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