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, 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, and spill prevention and response. In addition to job-specific training, workforce members receive annual environmental refresher training.
Our molybdenum processing facility in Rotterdam, Netherlands was the first site in our portfolio to secure EMS certification under the new ISO 14001:2015 standard in late 2016. Fourteen additional facilities certified their EMS under the new standard during 2017. Our remaining operations are expected to achieve certification to the updated standard by September 2018.
During 2017, we conducted internal environmental audits at 13 operations, and our facilities were inspected by governmental regulatory agencies on over 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 will be posted on our website when available. All operations have corrective action programs associated with the overarching EMS, as well as audit findings.
When operations have received a notice of a 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. NOVs also have followed spills or releases related to tailings dust or impacted water. When our operations have been assessed penalties, they are typically below $100,000 individually.
In October 2017, Indonesia’s Ministry of Environment and Forestry (the Ministry) notified PTFI of administrative sanctions related to certain activities the Ministry indicated are not reflected in PTFI’s environmental permit. The Ministry also notified PTFI that certain operational activities were inconsistent with factors set forth in PTFI’s environmental permitting studies and that additional monitoring and improvements need to be undertaken related to air quality, water drainage, treatment and handling of certain wastes, and tailings management. PTFI has been engaged in a process to update its permits through submissions and dialogue with the Ministry that began in late 2014, and PTFI believes that it has submitted the required documentation to update such permits. In April 2018, the Ministry issued decrees imposing environmental standards related to PTFI’s controlled riverine tailings management system which we consider to be unattainable. The decrees include a six-month transition period and conflict with PTFI’s approved environmental management programs and existing environmental permits. PTFI is engaged in discussions with the Ministry regarding these actions, which PTFI believes are contrary to the Indonesian government’s obligations under PTFI’s COW. Resolution of these matters is a requirement for concluding a comprehensive agreement for PTFI’s extended operations.
Freeport-McMoRan operates mines, smelters, metals processing facilities and reclamation projects around the world. Each operation requires significant quantities of water for metal production or for site rehabilitation and maintenance activities. We recognize the importance of responsible and efficient water management.
We utilize a water management system to determine near and longer-term water use requirements, as well as to seek sustainable water sources based on catchment factors such as drought exposure and rights to access. Our system begins with using 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 recycling opportunities. This allows us to seek a reduction in water needs where operational efficiencies allow, depending on production requirements.
During 2017, our mining operations required fresh, or make-up, water supplies of approximately 275 million cubic meters, which represents only 18 percent of the water used in our processes (82 percent of total water used was recycled or reused). Our operations utilized a total1 of approximately 1,560 million cubic meters of water during the year.
Minimizing our reliance on freshwater for operations is only one part of our water management program. To achieve a reduced water footprint within local communities where we operate, we continuously analyze the sources of our water and seek renewable and recycled sources. Over the last five years, we have made progress in achieving this management objective. Several examples include:
- Replacing 50 percent of the freshwater needs at Cerro Verde with treated effluent from a newly constructed wastewater treatment plant in Arequipa, Peru.
- Securing an annual allocation of Colorado River water, considered a renewable source in Arizona, where the company operates in an arid climate. This effort is focused on obtaining 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.
- Advancing feasibility of an expansion at our El Abra mine in Chilean Atacama Desert that would include construction of a desalination plant and accompanying 90-mile pipeline.
El Abra is located in a desert environment within the Chilean Atacama Desert with rainfall averaging less than 1 inch per year. Water for El Abra’s current processing operations comes from the continued pumping of groundwater from the Salar de Ascotán aquifer pursuant to regulatory approval. We continue to evaluate a major expansion at El Abra to process additional sulfide material and to achieve higher recoveries. Exploration results in recent years at El Abra indicate a significant sulfide resource, which could potentially support a major mill project similar to facilities recently constructed at Cerro Verde. Advancement of the feasibility of an expansion includes the evaluation of a desalination plant on the Pacific coast along with an accompanying 90-mile pipeline.
Preventing onsite and offsite impacts to water resources is core to our management system. In 2017, our Chino operation in New Mexico experienced a 500-year rainfall event. At Chino, mine water is contained and recycled in a series of loops from the open pit, milling facility, tailings impoundment, solvent extraction and electrowinning plant, leach stockpiles and various pipes, sumps, containments and dams. During extreme precipitation events, it is critical to route onsite water from areas in danger of overflowing to areas with adequate storage capacity. Preparedness was rewarded as employees were able to leverage instrument readings, back-up power and pumping equipment and close communication to keep the pumps and dams operational through the duration of the event with no offsite impacts.
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) support the local communities.
1 Total: freshwater + recycled + reused
Freeport-McMoRan is committed to managing climate-related impacts. While copper is crucial for the transition to a lower carbon future, we are pursuing efforts to mitigate potential impacts while advancing our commercial competitiveness.
Our Corporate Responsibility Committee charter was updated in 2018 to include oversight of programs to evaluate and address climate-related risks and opportunities. We have initiated a multi-year process to adopt applicable 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); we exclude PTFI, which accounts for approximately 55 percent of the company’s total direct emissions primarily due to its self-generation of coal-fired electricity for reliant power as a result of its extremely remote location.
Within FMC, we generally operate very large, low-grade copper deposits. These open-pit operations require significant energy inputs, principally diesel, electricity and natural gas. Our Safe Production objectives include a sharp focus on minimizing operating costs with truck haulage being a major contributor to both cost, as well as direct greenhouse gas (GHG) emissions. As our open pits continue to mature, haul road length increases and haul trucks are required to move ore farther distances to processing facilities. We use real-time systems to monitor equipment health, which enables achievement of the highest availability and utilization of our haul trucks. A global benchmark of this metric indicates that FMC achieves operational efficiencies greater than 10 percent compared to our average mining company peer. Because of this performance, we avoid capital required for purchasing additional trucks, as well as the annual operating costs and direct GHG emissions associated with operating approximately 28 additional haul trucks.
Indirect emissions are primarily those emitted by our electricity providers. In 2017, approximately 80 percent of FMC’s purchased power was from low carbon sources, including natural gas and renewable energy. We can reduce our Scope II emissions over time by seeking additional opportunities to purchase power from renewable energy sources, while balancing the near-term need for reliable, cost-effective power. We have engaged Rocky Mountain Institute to perform a detailed evaluation of these opportunities by operating region.
We do not 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, we may experience increased costs relating to changes in energy sources for, and GHG emissions from, our 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 continue to model a hypothetical carbon tax of $50 per metric ton on our GHG emissions (both Scope I and II) associated with our global copper mines. The associated hypothetical increase in operating costs does not necessitate changes to our business plans.
Our mining operations and associated infrastructure networks are temporarily affected by weather from time to time, primarily extreme precipitation and wind events. For example, in the first quarter of 2017, the Arequipa region was struck by severe rain events that caused localized flooding and damage to roads. Cerro Verde’s production was impacted, resulting in lower than planned sales volumes for that quarter. While the physical risks of climate-related impacts (including location, timing and duration) remain highly uncertain, we are embarking on a risk assessment to determine vulnerabilities within our business.
1. Includes Bagdad, Chino/Cobre, Morenci, Safford, Sierrita, and Tyrone mines as well as the Miami smelter in North America. Also includes Cerro Verde and El Abra in South America
For external verification of our GHG emissions inventory, please access our 2017 GHG Emission Inventory Assurance Statement.
The tailings and waste rock (including overburden) that we produce represent our largest volume of waste. Managing these large volumes of waste presents significant environmental, safety and engineering challenges. In 2017, we produced approximately 191 million and 154 million metric tons of tailings and waste rock, respectively. The primary risks associated with managing waste rock stockpiles and tailings relate to structural stability, geochemistry, water quality and dust generation. Management of this waste is regulated in the jurisdictions where we operate, and our programs are designed to be in compliance with applicable national, state and local laws, permits and approved Environmental Impact Studies.
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 19 TSFs and managing 56 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.
At the operational level:
- Qualified internal tailings-dedicated engineers and onsite leaders manage TSF stability. Roles, responsibilities and competencies are clearly defined for these professionals.
- We employ qualified external Engineer(s) of Record (EoRs) for analyses, designs, inspections and reviews for stability. Our EoRs inspect our operating TSFs at least quarterly (monthly in some cases). EoRs are actively engaged with our operating teams to review ongoing operations, performance on stability indicators, and planning for life of mine tailings requirements.
- We regularly inspect and monitor phreatic level trends and adhere to deposition plans, good operational construction practices, water management controls, seepage management strategies and other stability components. We also periodically review as built conditions through field and laboratory geotechnical testing programs under the guidance of our EoRs.
- Water management is a key aspect of tailings management to maintain structural stability. Our tailings management program includes measures to reduce fugitive dust emissions from the surface of tailings impoundments and increase reclaimed water capture to both minimize the amount of ponded water for stability purposes while also reducing evaporation losses (reduces freshwater consumption).
At the corporate level:
- Our corporate tailings team provides direction and support for implementation of program guidance, procedures and operational engineering good practices. Corporate tailings engineers are assigned as “Points-of-Contact” for specific operations to actively support operations, engineering and surveillance, and facilitate communications between site teams, the corporate tailings team and EoRs.
- In the Americas, the Tailings Stewardship Team (TST), a multi-disciplinary group of internal and external experts, evaluates the design, operation and maintenance of TSFs to ensure that we are following and internally sharing good practices. The TST documents, prioritizes and tracks progress on recommended actions and inspects all active and select inactive TSFs annually and other inactive and closed TSFs on a site-specific schedule. In 2017, our TST conducted annual field inspections at 19 active and 32 inactive TSFs. Sites have achieved 95 percent completion on TST recommended activities for TSFs (2004 to 2017).
- In the Americas, we also seek the advice of Technical Review Boards / External Tailings Review Boards (TRBs), composed of internationally recognized independent experts, regarding our EoRs’ design and analysis, as well as management of TSF stability and water controls. The TRBs provide a layer of assurance that our practices are aligned with TSF good practices. We utilize TRBs for all of our active TSFs in North America and South America.
We implement the elements of the ICMM Position Statement on Preventing Catastrophic Failure of Tailings Storage Facilities published in December 2016: accountability, responsibility and competency; planning and resourcing; risk management; change management; emergency preparedness and response; and review and assurance. Likewise, we continue to enhance individual elements.
For example, during 2017:
- We began drafting an “umbrella” TSF Framework Management document that connects all of the associated programs and procedures together for more effective internal communications.
- We continued to enhance our operations, surveillance, and critical controls systems, and continue to make improvements on our Key Performance Indicator Dashboard for internal communication between multiple levels of operations, engineering, and management.
- We added multiple tailings engineers to address resource gaps and reinforced accountability and responsibility among existing teams; new engineers, along with existing engineers, receive continuing education and career guidance to verify they have necessary competence and leadership to manage assigned scope.
PTFI’s controlled riverine tailings management system is implemented based on methods approved and permitted by the Government of Indonesia. The site-specific system, chosen after extensive evaluations of over a dozen alternatives, uses an unnavigable river to transport tailings out of the highlands (from approximately 3,000 meters elevation) to an engineered deposition area in the lowlands referred to as the ModADA. The river is not used for potable water, agriculture, fishing or other domestic or commercial uses, nor was it used for these purposes before operations began. Levees have been and continue to be constructed to laterally contain the footprint of the tailings and natural sediment within the ModADA while quantities of finer tailings and other sediments deposit in the estuary and the sea. Independent environmental management expert audits have reaffirmed the controlled riverine tailings management system is the best site-specific management alternative considering the topographical, seismic and geotechnical, geological, climatological and environmental conditions of the project area.
In addition to internal and external audits and assessments, PTFI uses the ModADA Management Board (MMB) for oversight of the tailings system. The MMB is a multi-disciplinary expert panel that meets on site to assess system performance and risks associated with the ModADA and coastal zone area. The MMB focuses on the structural integrity of the levees and the geochemical stability of the deposition area, as well as associated stakeholder engagement. The MMB provides recommendations to PTFI leadership and engineering teams on priority activities and tracks progress on detailed recommendations.
PTFI’s environmental impacts are well documented, monitored and managed, and have been subject to the Government of Indonesia’s regulatory oversight, including the approval of the AMDAL for PTFI operations, and the approval of annual work plans. Impacts of the system, including increases in sedimentation, were predicted in numerous studies and are consistent with the design and operation of the chosen alternative. Monitoring programs have established, except for elevation changes, the environmental impacts of tailings deposition are reversible at the end of mine life.
Data from biological sampling continue to demonstrate that the estuaries downstream of the tailings deposition area are functioning ecosystems, based on both the number of species and the number of specimens collected of nektonic, or free-swimming, organisms such as fish and shrimp. Large-scale demonstration reclamation projects show that several land-use options are possible after final closure of the deposition area. When mining is completed, this area can be reclaimed with natural vegetation or used for agriculture, forestry, grazing of livestock and aquaculture among other options, depending on stakeholder ambitions.
ADDITIONAL INFORMATIONControlled 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 ground water and air quality, erosion concerns from storm water (and in some cases wind), revegetation of suitable plant species (if applicable) and wildlife habitat. 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 ensure 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 2017, we continued LFA, erosion, and vegetation monitoring on reclaimed lands at multiple sites in Arizona and New Mexico.
Large-scale reclamation projects continued during 2017 at our Miami mine and the historic and non-operating Bisbee mine in Arizona. We continue work on over 1450 acres of reclamation at the Miami mine. Reclamation in 2018 will focus on construction of designed storm water conveyance structures and reclamation of some tailings dam slopes.
At the historic Bisbee mining district in Arizona, reclamation crews and experts continued working on major voluntary reclamation projects. We are continuing the reclamation efforts on the South Bisbee Stockpile storm water controls and evapo-transpiritive (ET) cover. The final reclamation plan for the South Bisbee Stockpile, which is approximately 135 acres in size, includes pioneering efforts around storm water 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 is planned to be 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 2017, we continued our 5-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 (or AML) 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. Trout Unlimited (TU) completed work at the Leavenworth mine site above the town of Georgetown, with source control and flow attenuation measures the primary focus. In 2017, we engaged both the Colorado AML team and TU to provide reclamation support in 2018 and 2019 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.
Cerro Verde is finalizing plans for construction of tailing reclamation test plots in 2018. 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)
Freeport-McMoRan is committed to minimizing operational impacts on biodiversity and ecosystem services while promoting opportunities to conserve and enhance wildlife resources in the areas in which we operate.
The conservation and management of biodiversity and ecosystem services is a key element of our sustainability programs and biodiversity considerations are integrated into our EMS. This enables us to understand potential impacts of our operations, to minimize adverse impacts to the maximum extent practicable and to seek opportunities to promote positive conservation outcomes at the local and regional levels from project design to eventual closure.
In 2017, all of our North America mining operations adopted site-specific Wildlife Protection Plans that include a summary of biodiversity baseline data, an assessment of wildlife risks associated with site operations and the identification of protection measures. The plans are based on an adaptive management approach to promote continual improvement in wildlife protection and ensure new risks arising from operational and ecological changes are adequately addressed.
Several operations conducted programs to promote the conservation of imperiled species in 2017. Tyrone operations in New Mexico and Morenci and Miami operations in Arizona continued to implement management plans that provide conservation benefits for endangered fish and bird species including the loach minnow and southwestern willow flycatcher. In partnership with Colorado Parks and Wildlife, our Henderson operations supported boreal toad conservation efforts and documented successful reproduction on mine property for the second consecutive year. Sierrita operations collaborated with Arizona Game and Fish and the U.S. Fish and Wildlife Service to establish a new population of threatened Chiricahua leopard frogs by relocating over 500 frogs from the mine area to a previously unoccupied pond on the Coronado National Forest. Our Bagdad operations supported an Arizona Game and Fish program to establish new populations of rare native fish by capturing and relocating approximately 200 roundtail chub, 42 Sonora suckers and 161 desert suckers from Bagdad’s property to nearby East Ash Creek. In South America, Cerro Verde operations continued conservation programs for endangered guanaco and the Peruvian long-snouted bat while our El Abra operations in Chile conducted programs benefitting regionally endemic vegetation and wildlife at the Salar de Ascotán wetlands area.
PTFI continued to implement biodiversity programs in 2017 including conducting long-term ecological studies on natural succession processes at two recently-formed islands in the Ajkwa Estuary. A total of 66 bird species were documented on the islands during quarterly surveys conducted in 2017, and long-term data indicate a gradual increase in annual species diversity and total number of individuals since monitoring was initiated in 2009. This trend, which includes observations of avian predators, indicates the health of the estuary ecosystem.
PTFI also continued to implement its wildlife repatriation program, which involves releasing wild animals that were used as exotic pets or confiscated from illegal traffickers back into native habitats. The program involves collaboration with a number of organizations, including the Indonesian Ministry of Environment - Natural Resources Conservation Center, Lorentz National Park, Mimika Agriculture Quarantine Center, Indonesian National Police, USAID LESTARI - Animal Welfare and Papua Animal Care and Reptile Timika Community. In 2017, a variety of species were treated at PTFI’s biodiversity research facility and, once in good health, released into their native habitats. These animals included 11 endangered or protected species such as the black-headed parrot, Papua New Guinea soft-shell turtle, red-breasted turtle, Papua freshwater crocodile, double-wattled Cassowary, ground kangaroo and Panama lizard.
Freeport-McMoRan continued to participate in the Wildlife Habitat Council’s (WHC) certification program, which formally recognizes meaningful biodiversity conservation and environmental education and community outreach programs. As of December 2017, a total of 15 operating sites and facilities were certified through WHC, 10 of which were recognized with gold or silver-tier certifications through WHC’s new Conservation Certification process. PTFI also won the Marine Intertidal Project award for its restoration of the Ajkwa and Waii mangrove islands, the Other Habitats Project award for its reclamation work at Grasberg and the Training Project award for its environmental internship program. Most notably, Freeport-McMoRan won the prestigious Employee Engagement award, which recognizes a company’s contribution towards conservation through the sheer strength of its employee involvement in habitat management and conservation education activities.
While the company’s biodiversity projects vary in scope and size, each provides an opportunity to benefit both local ecosystems and the communities in which we operate. Most biodiversity projects involve productive collaborations with stakeholders, such as government agencies and NGOs, and many incorporate formal outreach elements and STEM education opportunities for learners of all ages. For example, the company organized and led 10 pollinator-focused employee engagement and community outreach activities at our active and discontinued Arizona operations in 2017, including Earth Day celebrations, pollinator education workshops and hands-on planting events. In total, these activities reached over 750 individuals across the state. Safford also leveraged its Burrowing Owl Habitat Enhancement Program for conservation education by hosting a Conservation Day event that celebrated owl species and provided environmental education activities for local students. The Arizona Mining Association recognized Safford for its long-standing commitment to burrowing owl conservation by awarding it with the 2017 Sustainability, Preservation and Diversity in the Environment award.
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 2017, we generated approximately 176 thousand metric tons of non-mineral 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.
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.
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 2017, we generated 626 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.