Description: Grasberg is a world-class mining complex in Indonesia, where Freeport-McMoRan Copper & Gold is engaged in exploration and development, mining and milling of ore containing copper, gold and silver.

Did You Know? PT Freeport Indonesia commenced mining operations at this site in 1972 and in 1988 discovered the Grasberg mine. Today, after significant production, the Grasberg mining district contains the world’s largest recoverable copper reserve and the largest gold reserve.

Location:  Papua, Indonesia

Ownership: We own 90.64% of PT Freeport Indonesia, the principal operating subsidiary in Indonesia, including 9.36% owned through its wholly owned subsidiary, PT Indocopper Investama. The Government of Indonesia owns the remaining 9.36% of PT Freeport Indonesia.

FCX operates under an agreement with the Government of Indonesia, which allows us to conduct exploration, mining and production activities in a 24,700-acre area (Block A). We also conduct exploration activities in an approximate 500,000-acre area (Block B). All of our proven and probable mineral reserves and current mining operations are located in Block A.

Mines, Processes and Facilities: Two mines are currently in operation: the Grasberg open pit and the Deep Ore Zone (DOZ) underground block cave. The DOZ and the Ertsberg Stockwork Zone are adjacent to each other and are being mined together following our recently completed expansion of our underground operations to 50,000 metric tons per day, and the planned expansion to 80,000 metric tons per day.

Grasberg. We began open-pit mining of the Grasberg ore body in 1990. Open-pit operations are expected to continue until mid-2015 at which time the Grasberg underground mining operations are scheduled to begin. Production is currently at the 3,305- to 4,285-meter elevation level and totaled 57.5 million metric tons of ore in 2007 and 63.7 million metric tons of ore in 2006, which provided 75 percent of our 2007 mill feed and 80 percent of our 2006 mill feed.

Deep Ore Zone. The DOZ ore body lies vertically below the now depleted Intermediate Ore Zone. We began production from the DOZ ore body in 1989 using open stope mining methods, but we suspended production in 1991 in favor of production from the Grasberg deposit. Production resumed in September 2000 using the block-cave method. Production is at the 3,110 -meter elevation level and totaled 19.5 million metric tons of ore in 2007 and 16.5 million metric tons of ore in 2006. Production from the DOZ averaged 53,500 metric tons of ore per day in 2007 and 45,200 metric tons of ore per day in 2006. During 2007, we completed over 16,300 meters of development drifting in support of the block-cave mining method, and in mid-2007 PT Freeport Indonesia completed an expansion of the DOZ underground operation to allow a sustained rate of 50,000 metric tons of ore per day. Further expansion of the DOZ operation to 80,000 metric tons of ore per day is under way with completion targeted by 2010. Our success in developing the DOZ mine, one of the world’s largest underground mines, has given us additional confidence in the future development of PT Freeport Indonesia’s large-scale undeveloped ore bodies.

Development projects.  In addition to the Grasberg open pit, four other ore bodies (the underground Grasberg, Kucing Liar, Mill Level Zone/Deep Mill Level Zone and Big Gossan) are located in Block A. These ore bodies are at various stages of development, and are included in our proven and probable recoverable reserves.

Ores: Our ore bodies are located within and around two main igneous intrusions, the Grasberg monzodiorite and the Ertsberg diorite. The host rocks of these ore bodies include both carbonate and clastic rocks that form the ridge crests and upper flanks of the Sudirman Range, and the igneous rocks of monzonitic to dioritic composition that intrude them. The igneous-hosted ore bodies (the Grasberg open pit and block cave, and the Ertsberg Stockwork Zone block cave) occur as vein stockworks and disseminations of copper sulphides, dominated by chalcopyrite and, to a much lesser extent, bornite. The sedimentary-rock hosted ore bodies occur as “magnetite-rich, calcium/magnesian skarn” replacements, whose location and orientation are strongly influenced by major faults and by the chemistry of the carbonate rocks along the margins of the intrusions.

The copper mineralization in these skarn deposits is also dominated by chalcopyrite, but higher bornite concentrations are common. Moreover, gold occurs in significant concentrations in all of the district’s ore bodies, though rarely visible to the naked eye. These gold concentrations usually occur as inclusions within the copper sulphide minerals, though, in some deposits, these concentrations can also be strongly associated with pyrite.

The Grasberg complex shown below illustrates the layout of the current 2.7 billion metric ton Grasberg/Ertsberg minerals district reserves. The western side of the district is dominated by the Grasberg, with its massive open pit (final design shown) and block cave mineable reserves, and the Kucing Liar and Big Gossan ore bodies. The eastern side of the district is dominated by the Ertsberg East ore bodies Deep Ore Zone (DOZ), Mill Level Zone (MLZ), Deep Mill Level Zone (Deep MLZ) and Ertsberg Stockwork Zone (ESZ) to the north. The underground production and exploration access to these ore bodies is shown.

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