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Energy Management


Our copper mining operations require significant energy inputs, principally diesel, purchased power, coal and natural gas, most of which is obtained from third parties under long-term contracts. Energy represented approximately 17 percent of our consolidated copper production costs during 2015.

Our worldwide total greenhouse gas (GHG) emissions, measured as carbon dioxide equivalent emissions, were approximately 10.6 million metric tons divided between direct (57 percent) and indirect (43 percent) emissions for 2015. The increase from 2014 was attributable to the completion of the Cerro Verde expansion project, an increase in production at PTFI, the new Morenci mill operating for a full year and the new mill coming online at Cerro Verde in the fourth quarter. Indirect emissions are primarily those emitted by our electricity providers. In 2015, approximately 67 percent of our purchased power was from low carbon sources, including natural gas and renewable energy.

Our direct emissions are primarily from fuel combustion in haul trucks, followed by the combustion of fuels to provide energy for roasting, smelting and other processes. The majority of our mining activity occurs in open pits. As an open pit matures, haul road length increases and haul trucks are required to move ore additional distances to the processing facility. While the amount of waste material moved fluctuates year to year, the haul distances also increase. When market conditions necessitate the mining and processing of lower grade ore, haul trucks must move more material per pound of processed metal.

Crushing, milling, pumping and electrowinning are the most significant power-consuming processes at our facilities. We have achieved significant improvements in energy efficiency with our new processing facilities, including new mills at Morenci and Cerro Verde. The Cerro Verde concentrator expansion, for example, includes a High Pressure Grinding Roll circuit that is approximately 40 percent more energy efficient than a traditional Semi-Autogenous Grinding mill circuit. TFM also is utilizing 14 megawatts of electricity produced from cogeneration at its two acid plants and is completing refurbishment of four hydropower turbines in the region.

We continue to invest annually in energy-related research and development through our technology center, technical services and operational improvement groups. We participate in utility demand side efficiency programs and support renewable energy standards when feasible, such as providing mining-related property for solar power generation.

Our mining operations are currently not located in jurisdictions where there is a direct cost associated with our GHG emissions. As countries implement programs to meet objectives stemming from the COP 21 agreement, from a medium to long-term perspective we may experience increased costs relating to changes in energy sources for, and GHG emissions from, our mining operations. In addition, the cost of electricity and other inputs that we purchase may increase if our suppliers incur increased costs from the regulation of their GHG emissions. We have modeled a hypothetical carbon tax of $50 per metric ton on our GHG emissions (Scope I and II) associated with our global copper mines. The associated hypothetical increase in operating costs would not necessitate operating plan changes as it is similar to possible fluctuations in mined ore grades. Applying this model to our forecasted emissions profile and five-year copper production plans does not alter our current operating plans.

2015 Total Energy Use and Related CO2-e Emissions
  Energy Consumed
in petajoules
Percent of Total
CO2-e
in million metric tons
Percent of total
Direct Sources
Liquid Hydrocarbons
41
40%
2.0
19%
Coal
20
20%
3.3
31%
Gaseous Hydrocarbons
6
6%
0.3
3%
Other
0
0%
0.4*
4%
Indirect Sources
Purchased Electricity
35
34%
4.6
43%
Total
102
100%
10.6
100%
* Emissions from non-energy consumption processes including leaching of calcite-containing ore, lime manufacturing and iron removal.


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