Phelps Dodge Corp. to Construct Copper Concentrate Leaching and Electrowinning Facility in Arizona

Phelps Dodge Corp.'s mining unit has announced plans to build a large-scale copper concentrate leaching and direct electrowinning facility at its copper mine in Morenci, Arizona. The company will employ its own technology to process mixed primary and secondary copper ores, a process currently being demonstrated at its Bagdad, Arizona mine. The facility is being constructed in conjunction with the restart of the Morenci concentrator, which will affect several other Phelps Dodge facilities in Arizona and New Mexico. The project is expected to begin operations in 2007 and has been approved for $210 million in expenditures.

Key Takeaways:

• Phelps Dodge Corp.'s mining unit will construct a commercial-scale copper concentrate leaching and direct electrowinning facility at its Morenci, Arizona mine.
• The facility will employ technology developed by Phelps Dodge and will process mixed primary and secondary copper ores.
• The project is being built in conjunction with the restart of the idled concentrator at Morenci and is expected to begin operating in 2007.
• The facility will affect several other Phelps Dodge facilities in Arizona and New Mexico, including the Miami refinery, Chino smelter, and Tyrone and Cobre mines.
• The long-lived assets and related supplies at these facilities will be written down by approximately $420 million, or $321 million after taxes.
• The impairments will result in a noncash special charge of approximately $3.21 per share in the second quarter.

Statistics:

• $210 million: Expenditures approved by Phelps Dodge Corp.'s board for the construction of the leaching and electrowinning facility.
• 2007: Expected start-up date for the facility.
• $442 million: Total carrying value of the long-lived assets and related supplies at the affected facilities.
• $420 million: Approximate amount by which the assets will be written down.
• $321 million: Approximate amount by which the assets will be written down after taxes.
• $3.21: Approximate noncash special charge per share in the second quarter.

Sources:

• Phelps Dodge Corp.'s press release, dated June 2, 2005.
• Dow Jones Commodities News via Comtex, June 2, 2005.