Freeport McMoRan Copper & Gold stunned everyone with their earnings report this morning: $13.9 billion loss in 4th quarter 2008, a 9% drop in copper sales estimates for 2009, and 17% for 2010 estimates.
One of the statements that caught my attention in the 9-page report was that costs at Freeport's North American copper mines (4 in Arizona, 1 in NM) ranged from $0.05 per pound "at one mine" to $1.95 at the Morenci mine on a net cash basis. With copper up from its low of about $1.25 to the current $1.50, that would seem to put Morenci at risk.
But Freeport describes the cost-cutting and production cuts already implemented. Those, and reduced input costs, will mean that average production costs in 2009 should be about $1.17 on average, with the most expensive mine at $1.25 per pound.