Freeport CEO: Congo deadline "a challenge"

By Steve James

NEW YORK (Reuters) - It will be "challenging" for Freeport-McMoRan Copper & Gold (FCX.N: Quote, Profile, Research, Stock Buzz) to meet its target date to start mining in Democratic Congo by next year, its chief executive said on Wednesday.

Although the political situation in the central African nation has stabilized recently, much infrastructure is "non-existent" and has to be built before the company can begin producing copper and cobalt from its vast Tenke Fungurume project, Richard Adkerson said.

"It's a real challenge and if we can meet that target I would be very happy with that," he told the Reuters Global Mining and Steel Summit when asked if production would start in the last quarter of 2008, as it has said.

Freeport-McMoRan, the world's largest publicly traded copper company, acquired Tenke Fungurume when it bought mining rival Phelps Dodge for $25.9 billion earlier this year.

Asked if it was on track to meet its goal of producing 115,000 tonnes of copper and 8,000 tonnes of cobalt per year in 2009, Adkerson said: "That's what the initial project is designed to produce, so that's what we're working towards producing. (But) The timing issue is challenging."

In an earlier interview, Colin Benner, vice chairman of Lundin Mining (LUN.TO: Quote, Profile, Research, Stock Buzz), which will be a minority partner in the project, said Freeport wanted to quadruple output in 7 years.

"Freeport has indicated that they would like to double that (output) by 2011 and double it again by 2015," Benner told the Reuters Summit by telephone from Vancouver.

"It's quite conceivable that by 2015, it could be producing 400,000-plus (tonnes) copper cathode and about 30,000 per year of cobalt," he said.

Next month, Lundin is expected to finalize its $1.3 billion acquisition of Tenke Mining TNK.TO which has an almost 25 percent stake in Tenke Fungurume.

Benner's comments appeared to catch Adkerson offguard during the teleconference with Reuters journalists from Freeport's headquarters in Phoenix, Arizona.

"We haven't made comments like that ... in the public arena. I'm not saying those estimates are unrealistic."

Adkerson noted the Congo concession is some 600 square miles in size -- bigger than the city of Phoenix. "It has its challenges. It's in the middle of Africa, in an emerging country. It's had its difficulties."

Roads and power plants are more or less non-existent, he noted.

Meeting start-up goals depends on "a contract situation that will allow you to commit capital and on our ability to construct infrastructure to conduct mining operations."

Benner, who was at Tenke Fungurume a month or two ago, said the ground had not yet been cleared for the processing facilities, waste stock piling area and tailings pond.  Continued...