Freeport-McMoRan Inc., often called Freeport, is an American mining company based in the Freeport-McMoRan Center, in Phoenix, Arizona. The company is the world's largest producer of molybdenum, a major copper producer and operates the world's largest gold mine, the Grasberg mine in Papua, Indonesia.
It was founded 1912 by the son of a Swedish banker to develop sulfur mining along the US Gulf Coast concurrently with Freeport, Texas. In 1913, it incorporated as a vertically integrated holding company including numerous subsidiaries like gas and light, railroad, oil from Tampico, Mexico, and a refinery. After 1930, the company diversified by buying into manganese mines, nickel during World War II, potash and the Cuban American Manganese Corporationin the 1950s. Since 1967, the company has mined the Ertsberg deposit of gold and copper in the Grasberg mine, where since 2017 it has been holding a 49% interest. In the 1990s the Rio Tinto Group invested in Freeport and IMC Group acquired its fertilizer business.
The multinational company which owns subsidiaries in the Americas, Europe, Asia, Africa has caused extensive, long-term and irreversible environmental damage in areas, where it has operated. It has been criticized for violating human rights in Papua. In 2018, Freeport-McMoRan Copper & Gold along with 90 additional Fortune 500 companies paid no federal taxes as a result of the Tax Cuts and Jobs Act of 2017.
History
Freeport Sulphur Company was founded July 12, 1912, by the eldest son of Svante Magnus "E.M." Swenson, banker Eric Pierson Swenson, with a group of investors, to develop sulfur mining at Bryan Mound salt dome, along the US Gulf Coast.[2] Freeport, Texas was also established in Nov. 1912 to house workers, and serve as a port for Houston, rivaling Galveston and Corpus Christi.[3][4]
Freeport mined sulfur along the Gulf Coast using the Frasch process, the patents for which had expired in 1908,[5] a disruptive innovation for the automated mining of previously inaccessible sulphur deposits at a cost lower than that of established mines, where manual labor gained the mineral under the most appalling conditions. Previously, Union Sulphur Company founder and patent-holder Herman Frasch had enjoyed a monopoly on the process.[6] The Bryan Mound salt dome just south of Freeport became the second Frasch sulphur mine in the world in 1912.
Freeport Texas Company
Enterprise to support Freeport Sulphur's business and the new town's infrastructure led to the incorporation of a holding company on September 30, 1913, to join the newer assets with Freeport Sulphur and create a vertically integrated mining company around, at first, a single sulphur mine. Officers of the new holding company, Freeport Texas Company, were:
On May 7, 1917, all 35,000 outstanding shares were exchanged for 500,000 new shares of no par value (at a rate of 14 2/7:1). The stock was listed on the NYSE since 1919. Freeport raised an additional $4 million with an April 1, 1922 issue of convertible bonds, almost all of which were converted to common stock right away. Of the new total of 732,000 authorized shares 729,844 were then outstanding. In 1933, the no par common stock was exchanged for $10 par common and $2,500,000 convertible preferred were issued to finance the development of Grande Ecaille, about half of which was converted, the remainder called for redemption in 1938 at the end of which 796,380 common shares were outstanding. To raise general working capital Freeport Sulphur in 1939 sold $3,000,000 in 3% 20-year private debentures to Metropolitan Life Insurance Co. and Sun Life Insurance Co. of Canada.[20] On September 1, 1951, the 99th consecutive quarterly dividend was paid. Effective September 21, 1951 the 800,000 outstanding common shares were split 3-for-1 and the authorized capital was increased from 850,000 to 3,000,000 shares.[21][22]
Operations as of 2019
Freeport is the world's largest producer of molybdenum, and one of the largest producers of copper.[317] In 2019, 79% of its revenues were from the sale of copper, 11% were from the sale of gold, and 8% were from the sale of molybdenum.[317] In 2019, sales to the company's copper refining joint venture in Gresik Regency accounted for 13% of the total revenues of the company.[317]
Some of the company's mining operations have been as follows:[317]
Africa
Freeport Cobalt held a 100% interest in Kisanfu, a copper and cobalt exploration project located near Tenke, Democratic Republic of the Congo
Controversies
Safety record
In 2011, Freeport was fined by the U.S. Department of Labor's Mine Safety and Health Administration over the death of a miner. The 67-year-old man had fallen into a hole created by the removal of two steel gratings. It was concluded that Freeport had not done enough to indicate that the hole was there.[324]
Grasberg Mine, human rights and environment
Freeport has had a troubled relationship with the Amungme and Kamoro peoples since it arrived in Papua, Indonesia in 1967 to operate the world's largest and most profitable gold mine, the Grasberg mine. Freeport allegedly damaged 30.000 hectares of the rainforest and two major rivers, on which they depend for their food, water, livelihoods, and traditions. The company is a signatory participant of the Voluntary Principles on Security and Human Rights.[325] Pressured by cultural and economic deterioration, there were numerous quarrels, between the tribes, Freeport, and the Indonesian military.[326]
Past holdings
Sulphur mines
Bryan Mound
A first demonstration run began on November 19, 1912, but the plant was quickly shut down again for adjustments.[343][344] Operations were unsteady throughout 1913. In December one shipment of 730 tons was made to New York and the plant produced about 200[345] tons per week.[346] The Bryan Mound was 25 feet tall. Five different companies had drilled about 16 holes into the mound in the search for oil, but found no hydrocarbons in commercially viable quantities and attached no value to the sulphur they encountered under the given conditions. During two years of prospecting and with total of $150,000 expended, the Freeport Sulphur syndicate drilled 11 holes, each of them showing sulphur at between 760 feet and 1,100 feet in the form of sulphur bearing limestone, dolomite and gypsum with some beds of pure sulphur up to 7 feet thick.
Past board members
Past board members include Henry Kissinger, John Hay Whitney, Robert A. Lovett, Benno C. Schmidt Sr., Gus Long, Arleigh Burke, J. Stapleton Roy, Godfrey Rockefeller and his cousin-in-law, Jean Mauzé.
External links
References
- 2024 Annual Report (Form 10-K) U.S. Securities and Exchange Commission, February 14, 2025^
- Poor's Poor's Government and Municipal Supplement, Poor's Publishing Company, 1922, p. 760.^
- Diana J. Kleiner. Freeport, TX (Brazoria County) Texas State Historical Association, 22 October 2020, retrieved 22 January 2021