The Freeport-McMoRan Environmental Policy, updated in 2018, is based on our objective to be compliant with laws and regulations and to minimize environmental impacts using risk management strategies based on valid data and sound science. It requires that we review and take account of the environmental effects of each activity, whether exploration, mining or processing, and that we plan and conduct the design, development, operation and closure of facilities in a manner that optimizes the economic use of resources while minimizing adverse environmental effects.
All of our mining and mineral processing operations maintain Environmental Management Systems (EMS) certified to ISO 14001:2015, which are independently audited on an annual basis. As part of the EMS, employees and contractors are trained on site-specific subject areas, including chemical management, waste management, air quality controls, and spill prevention and response. In addition to job-specific training, workforce members receive annual environmental refresher training and are monitored and supported in the field by environmental professionals. Site management teams identify, manage and mitigate environmental risks through our structured risk register process.
During 2018, we conducted internal environmental audits at 10 operations, and our facilities were inspected by governmental regulatory agencies on approximately 100 occasions. Since 1996, an independent environmental audit has been conducted at PTFI every three years. An executive summary and responses to the 2017 audit recommendations are posted below. All operations have corrective action programs associated with the overarching EMS as well as audit and inspection findings.
When operations receive a Notice of Violation (NOV) from a regulatory agency such as shown in the table below, the citations typically have involved brief and minor exceedances of permit conditions or other recordkeeping violations, which have zero or minimal environmental impact. We had two dust-related NOVs in late 2018 at Sierrita.
We operate mines, smelters, processing facilities and reclamation projects around the world that require water for metal production or for site rehabilitation. Our mining operations are in areas where competition for water supplies is significant. We recognize that access to safe and clean water and sanitation is a fundamental human right and understand the critical importance of responsible water management.
Our operations utilized1 approximately 1,540 million cubic meters of water during 2018, including water withdrawals2 of approximately 300 million cubic meters. Eighty-one percent of our total utilized water was from recycled or reused sources. Our objective is to maintain high rates of recycled or reused water and our performance has approximated 80 percent in recent years. We are implementing the ICMM Water Position Statement and applying its water reporting guidelines, which include a water use efficiency metric that takes into account our water discharged back to the environment at applicable operations. By accounting for discharge quantities of 96 million cubic meters, our water use efficiency was 86 percent for 2018.
Freeport-McMoRan maintains a global water management program designed to (1) increase water use efficiency in our processes and minimize the fresh water used by the operations; (2) maximize the reuse of water introduced to our operations; (3) replace traditional water supplies with renewable or recycled water supplies; and (4) collaborate with catchment stakeholders including local communities. The process begins with applying operational-based water models to understand our water use in order to minimize water losses (such as evaporation or seepage), maintain quality standards and identify opportunities for reuse. This allows us to seek a reduction in water needs where operational efficiencies allow, depending on production requirements. In addition to optimizing water use at our mining facilities, our water management practices are aligned with strategic objectives designed to maintain the safe operation and structural stability of our tailings storage facilities.
Minimizing our reliance on makeup water for operations is only one part of our water management program. To achieve a reduced water footprint within multi-user catchments, we continuously analyze the sources of our water and actively seek renewable and recycled sources. We have made progress in achieving this management objective, including:
- Replacing 50 percent of the makeup water needs at Cerro Verde with treated effluent from a newly-constructed waste water treatment plant in Arequipa, Peru.
- Securing long-term and annual allocations of Colorado River water, considered a renewable source in Arizona, where the company operates in an arid climate. This effort is focused on obtaining both short-term and long-term water supply contracts with multiple Native American tribes who have senior water rights in the state. These agreements reduce our reliance on local groundwater and surface water and help Arizona accomplish its goal of moving industrial water users away from groundwater sources. The company is also partnering with other key business and governmental entities to develop water exchanges and additional water pipelines that will assist in the flexibility to utilize newly acquired alternative water sources such as treated effluent. In 2018, the company was able to offset 70 percent of its fresh water needs in Arizona through recharging Colorado River water in areas of the state where water is needed.
- Evaluating a large-scale expansion at El Abra in the Chilean Atacama Desert, where rainfall averages less than an inch per year to process additional sulfide material and to achieve higher recoveries. The project would likely include construction of a desalination plant and accompanying 90-mile pipeline. Technical and economic studies are being advanced to determine the optimal scope and timing for the project.
- Serving as a leading member of an international coalition conducting studies to bring desalinated water to the southwest United States, and working with another international coalition that would work to capture raw sewage to convert it into usable water.
- Evaluating a proposal for a joint water storage project to capture runoff in the Rocky Mountain region that would support existing mine water supplies and development of new supplies for local communities.
1 Total Utilized Water = withdrawals + recycled + reused
2 Withdrawals or Makeup Water = surface water + groundwater + stormwater + sea water + third-party supply (such as municipal waste water effluent)
Preventing on-site and off-site impacts to water resources also is core to our water management system. Stormwater is actively managed and contained on-site for operational use by utilizing various piping systems, sumps, containment structures and dams. We are reviewing the potential for more frequent and intense precipitation events that could result in impacts to on-site and off-site water resources. During such events, it is critical to route on-site water from areas in danger of overflowing to areas with adequate storage capacity.
At the operating-level, each active mining and metals processing facility evaluates climate-related risks and opportunities through its sustainable development risk register process. This includes reviewing the potential for physical climate risks, including impacts from extreme weather events, that could jeopardize the resiliency of revenue generating operations).
Freeport-McMoRan recognizes that climate change poses significant near-term, medium-term and longer-term challenges for society. We also understand that climate change presents risks and opportunities for our operations and our financial performance. We aim to manage and mitigate, to the extent possible, associated risks to our business with the ambition of being a net positive contributor to climate solutions through delivery of copper to global markets.
We are continuing a multi-year process to address the core reporting recommendations of the Task Force on Climate- Related Financial Disclosures (TCFD). In doing so, we focus on the copper-producing operations1 of Freeport Minerals Corporation (FMC) where we can make meaningful improvements in energy efficiency as well as increase the percentage of power purchased from low-carbon sources. We exclude PTFI, which accounts for approximately 56 percent of the company’s total direct emissions primarily due to its self-generation of coal-fired electricity for reliant power because of its extremely remote location.
1 Includes Bagdad, Chino/Cobre, Morenci, Safford, Sierrita, Tyrone and the Miami smelter in North America as well as Cerro Verde and El Abra in South America.
Energy and Emissions Management
Within FMC, we generally operate very large, low-grade copper deposits. These open-pit operations require significant energy, principally diesel, electricity and natural gas, most of which are obtained from third parties under long-term contracts. Energy represented approximately 20 percent of our copper mine operating costs in 2018. This is why our asset-level objectives include a sharp focus on minimizing operating costs. Truck haulage is a major contributor to both cost and direct greenhouse gas (GHG) emissions.
As our open pits continue to mature, haul road length increases, and trucks are required to move ore farther distances to processing facilities. In 2018, we increased mining rates, which included reactivation of significant truck haulage capacity. In doing so, we continued to use real-time systems coupled with big data analytics to enhance predictive maintenance and operational performance to enable achievement of the highest availability and utilization of our haul trucks. A global benchmark of this metric continues to indicate that FMC achieves operational efficiencies 10 percent greater than our average mining company peer. Maintaining top-quartile equipment utilization supports our low cost profile with the benefit of emissions avoidance associated with inefficient asset use.
FMC’s total GHG emissions in 2018 were 4.9 million metric tons compared to 5 million metric tons the year prior. Direct, or Scope I, emissions increased approximately 300,000 metric tons, primarily driven by fuel consumption associated with higher mining rates and stripping activity at the Lone Star project (accounted by Safford).
In 2018, FMC’s purchased power from renewable and low carbon sources increased to 83 percent from 80 percent the year prior. Thirty-six percent of the purchased power was solely generated from renewable sources. As sufficient information has become accessible for determining the sources of our purchased power at most operations, we have transitioned to a market-based methodology for indirect, or Scope II, emissions accounting. While consumption of purchased power slightly increased from the year prior, our Scope II emissions decreased by approximately 280,000 metric tons. As the percentage of low carbon and renewable power in electric grids increases, we expect we can further reduce our Scope II emissions over time.
El Abra in Chile recently extended its energy supply contract that increases its consumption of renewable power, and by 2021, the operation expects 100 percent of its electrical power requirements will be sourced from renewables. Other operations participate in utility demand-side efficiency programs and support renewable energy standards when feasible, such as providing mining-related properties for solar power generation, including 20MW of solar generation in Arizona. Additionally, in late 2018, Freeport entered into a 14MW renewable purchase power agreement to source wind generation from Wyoming to mining operations in Arizona.
Rocky Mountain Institute’s Sunshine for Mines (SfM) program recently completed screenings of six of our copper mines in the southwestern U.S. to determine the potential for economic solar power development and generation. Initial results indicate significant potential for project development and further detailed economic modeling for project prioritization continues. A similar assessment will be conducted at El Abra and Cerro Verde in 2019, and Morenci is planning to undertake a wind resource assessment.
We do not currently operate in jurisdictions where existing mechanisms for carbon pricing signal a material increase to our costs. However, as countries implement programs to meet objectives of the COP 21 agreement (Nationally Determined Contributions), we may experience increased costs relating to changes in energy sources for, and GHG emissions from, our operations. In certain jurisdictions, however, we expect to enter into favorably priced power contracts with utilities as economic, renewable sources represent larger percentages of generation capacity.
In addition to related disclosures in our 2018 Working Toward Sustainable Development report and throughout our website, we have prepared a separate Climate Impacts and Opportunities report. The report, along with an independent verification statement of our 2018 greenhouse gas footprint, can be found here.
We recognize that the failure of tailings and other impoundments at any of our mining operations could cause severe, and in some cases catastrophic, property and environmental damage and loss of life. Many of our tailings impoundments are located in areas where a failure has the potential to impact individual dwellings and a limited number of impoundments are in areas where a failure has the potential to impact nearby communities or mining infrastructure. As a result, our programs take into account the significant consequences resulting from a potential failure, and we apply substantial financial resources and technical resources, both internal and external, to materially reduce the likelihood of failures.
Freeport-McMoRan’s objective is to have zero catastrophic structural failures of tailings storage facilities (TSFs). We maintain a tailings management and stewardship program designed for continual improvement and assurance, currently operating 18 TSFs and managing 58 TSFs that are inactive or have been reclaimed. The Tailings Stewardship Program includes inspection and management processes associated with water dams and crush leach stockpiles.
ADDITIONAL INFORMATIONSite-Specific Tailings Information Controlled Riverine Tailings Management at PT Freeport Indonesia Mining Reclamation in North America Tailings Dust Management at Sierrita Sulfate Information at Sierrita Tailings Dust Management at Morenci
Mine reclamation is the process of taking land once used by the operation and implementing measures that allow the land to develop natural features or meet an alternate economic or ecological use (a post-mining land use). Generally speaking, reclamation incorporates aspects relating to surface and groundwater quality, air quality, erosion concerns from stormwater (and in some cases wind), and revegetation of suitable plant species (if applicable) and wildlife habitat in combination to promote ecosystem reestablishment. Alternate land uses in mine reclamation may include open space, wildlife habitat, grazing habitat, recreation and educational areas, renewable energy sites, industrial land, and other economically or ecologically productive land uses.
We monitor reclaimed lands to evaluate that they are developing consistent with the designated post-mining land use. Landscape Function Analysis (LFA) monitoring is one example of a tool used to assess how well certain reclamation areas are functioning as a natural system. We also monitor vegetation on reclaimed lands, including assessing plant variety and growth on reclaimed surfaces. Data generated allows for comparisons between reclaimed lands and native surrounding areas (reference sites) which represent mature native functional landscapes, and provide target values for the final reclaimed landscape. In 2018, we continued LFA, erosion, and vegetation monitoring on reclaimed lands at multiple sites in Arizona and New Mexico.
Large-scale reclamation projects continued during 2018 at our Miami mine and the historic and non-operating Bisbee mine in Arizona. We continue work on over 1,450 acres of reclamation at the Miami mine. Reclamation in 2019 will focus on continued construction of designed stormwater conveyance structures and reclamation of some tailings dam slopes in Miami. At the historic Bisbee mining district in Arizona, reclamation crews and experts continued working on voluntary reclamation projects. We are continuing the reclamation efforts on the South Bisbee Stockpile stormwater controls and evapo-transpiritive cover. The final reclamation plan for the South Bisbee Stockpile, which is approximately 135 acres in size, includes pioneering efforts around stormwater attenuation to match local infrastructure. Reclaimed surfaces in Bisbee total over 1,200 acres.
Since large-scale tailings reclamation efforts in New Mexico were completed during 2014, we have transitioned to the monitoring and maintenance stage. With future stockpile reclamation in mind, we continue to add reclamation test plots at our mine properties. A new reclamation test plot at the Chino mine site was constructed in 2018 and will be used to evaluate alternative cover material resources. We have over 6000 combined acres of reclamation completed at our Tyrone and Chino mines in New Mexico where monitoring to achieve our long term goals includes LFA (as mentioned above), erosion, infiltration, and wildlife monitoring.
In 2018, we continued our five-year, $2.5 million commitment to assist the Colorado Inactive Mine Reclamation program in leveraging funds from government agencies, industrial partners, and non-profit environmental organizations to reclaim abandoned mine sites (AMLs) that are not associated with our current or prior operations but are primarily within the watersheds in which we operate. We have expanded the watersheds to include areas where the company has legacy liabilities. We engaged both the Colorado AML team and Trout Unlimited to provide reclamation support in 2018 at the Keystone Mine near Crested Butte, Colorado - the funding for their work is in addition to our funding commitments to support their efforts on abandoned mine sites elsewhere in Colorado. Trout Unlimited also successfully completed work at the Evans Gulch and Illinois Gulch mine sites near Leadville and Breckenridge respectively, with source control and flow attenuation measures the primary focus.
Plans for the Cerro Verde reclamation test plots were re-engineered in 2018 to locate the plots closer to the active mine site. The test plots will be studied to confirm the long-term effectiveness of the purposed closure methods. The closure methods and test plots are designed to evaluate cover material placement on tailings storage facilities. The objective of the test plot program is to validate the effectiveness of closure methods and designs outlined in the most recent Cerro Verde Closure Plan update.
ADDITIONAL INFORMATIONMining Reclamation in North America Freeport-McMoRan partners with Trout Unlimited to restore habitats in Colorado (see pages 4-5)
We are committed to minimizing the impacts of our operations on biodiversity and ecosystem services while promoting opportunities to conserve and enhance resources in the areas in which we operate.
Biodiversity considerations are integrated into our EMS, which enable us to understand potential impacts of our operations, to minimize adverse impacts to the maximum extent practicable and to seek opportunities to promote conservation outcomes throughout all phases of a project. As a member of the ICMM, we are addressing the commitments within its Mining and Protected Areas Position Statement, including not mining or exploring in World Heritage sites. We are also developing guidance for our sites to address the ICMM Performance Expectation regarding implementation of the mitigation hierarchy with the ambition of no net loss.
Our commitment to biodiversity conservation is further supported by the implementation of Wildlife Protection Plans at North American operations. These plans present biodiversity baseline conditions, assess potential wildlife risks associated with our operations and identify protection measures. They also incorporate an adaptive management approach to promote continual improvement in wildlife protection and allow us to effectively address new risks arising from operational and ecological changes. Based upon the results of the wildlife risk assessment processes, several operations have also adopted Avian Protection Plans to minimize potential risks to migratory birds. At international operations we apply similar Biodiversity Action Plans to address risks to important species while promoting conservation opportunities.
In 2018, we continued long-term programs to promote the conservation of imperiled species. Examples include:
- Tyrone, Morenci and Miami operations implemented management plans developed in consultation with the U.S. Fish and Wildlife Service to support conservation of several endangered species such as the spikedace, loach minnow, yellow-billed cuckoo, and southwestern willow flycatcher.
- Henderson operations continued its partnership with Colorado Parks and Wildlife to support boreal toad conservation and documented successful reproduction on mine property for the third consecutive year.
- Sierrita operations relocated over 200 endangered Pima pineapple cactus from the mine site to a company-owned property that is protected under a conservation easement.
- Morenci operations supported Arizona Department of Game and Fish efforts to establish new bighorn sheep populations by capturing bighorn sheep from the mine site and relocating them to new habitats.
- Cerro Verde continued conservation programs for several species such as the endangered guanaco and Peruvian long-snouted bat.
- El Abra conducted programs benefitting regionally endemic vegetation and wildlife at the Salar de Ascotán wetlands area.
While our biodiversity projects vary in scope and size, each provides an opportunity to benefit ecosystems and the communities where we operate. Most biodiversity projects involve productive collaborations with stakeholders such as government agencies and NGOs, and many incorporate formal outreach and STEM education opportunities. For example, staff across our North American sites reached over 2,000 students and community members through pollinator-focused education and outreach activities including Earth Day celebrations, pollinator education workshops and hands-on planting events in the field. In partnership with Bat Conservation International, Wildlife Habitat Council (WHC) and other NGOs, the company participated in an initiative to protect migratory, nectar-feeding bat species near its operations in southeastern Arizona. During 2018, company staff engaged over 120 employee and community volunteers to propagate and plant native agave species that serve as the bats’ primary food source. The Arizona Mining Association recognized Morenci’s long-standing commitment and extensive efforts around bat conservation by awarding it the 2018 Sustainability, Preservation and Diversity in the Environment award.
Freeport-McMoRan participates in the WHC certification program, which formally recognizes meaningful biodiversity conservation and environmental education and community outreach programs. In 2018, both Chino and Sierrita became WHC certified brining our total certifications to 18 operating sites and company facilities. Fifteen sites received gold-tier certification and 3 received silver-tier certification through the WHC Conservation Certification process. In 2018, Henderson won WHC’s Invasive Species Management Award for its efforts to remove invasive species and enhanced native habitat while Morenci received the Mammals Project Award for its Rocky Mountain Bighorn Sheep management activities.
Freeport-McMoRan is continuously evaluating opportunities to reduce the quantity and toxicity of waste generated at our facilities and to use the least toxic materials available for our processes. While we cannot eliminate all waste generated at our sites, we strive to reduce the quantity of wastes sent off-site for disposal, and look to increase the reuse and recycling of materials sent off-site. This includes scrap metal, HDPE pipe, obsolete equipment and inventory items, as well as off-spec chemicals and materials.
Key to our materials stewardship programs is responsible waste and recyclable material management. The company has implemented procedures to evaluate off-site disposal and recycling facilities to ensure they meet high standards of regulatory compliance, financial strength and environmental management practices.
In 2018, we generated approximately 180 thousand metric tons of waste and recyclable material. In addition, we generated approximately 10 thousand cubic meters of used oil due to maintenance activities, all of which was recycled.
Management of Sludges and Residues
We manage slags, sludges and residues in order to comply with applicable national, state and local laws, and permits. Slags, sludges and residues include smelter and furnace slags, electrowinning/electrorefining tankhouse sludges, air emission control residues and water treatment plant sludge. In 2018, we generated 692 thousand metric tons of slags, sludges and residues. When possible, these materials are recycled back into processes or are evaluated for other uses in accordance with applicable regulations.