Freeport-McMoRan Inc (NYSE:FCX), the world’s largest producers of copper, is leveraging artificial intelligence to increase its copper output to 90,000 tonnes. The company plans on deploying this machine learning technology to all its copper mines.
This decision comes after the company has completed its testing operations in Arizona at their Bagdad mine. The tested artificial intelligence model is to be rolled out to all its activities in America, to boost production levels.
This new model is deemed to increase its copper production by 5% per annum.
Freeport’s new model will reduce costs exponentially. The production of 90,000 tonnes of copper would cost the company approximately $2 billion. Moreover, it would involve the purchase of new crushing equipment, haul trucks as well as giant shovels.
Freeport developed this model in conjunction with McKinsey. The model utilizes data collected around the mines to suggest new and improved methods to improve the performance and efficiency of the processing mills and crushers.
With the enablement of this AI model, Freeport plans to boost its production further by 30% by exploring underground mining in Grasberg mine and Lone Star, located in Indonesia and Arizona respectively.
The Grasberg project has risen eyebrows amongst the investors and some have shied away from leading to a decrease and flatlining of Freeport’s share price. Similar operations in Oyu Tolgoi underground mining could have influenced this reaction. However, Mr. Adkerson said that “They are sinking a shaft and we are going in horizontally. And these are ore bodies we have mined since the early ’90s. We know the rock”. He further added that “The market is heavily discounting the risk associated with the underground transition. We are confident we can complete it but we have to do it”.
Freeport reports that after the shift to underground mining in 2020, Grasberg is estimated to be production above 700,000 tones per year of copper and 1.8 million ounces of gold. These production volumes will be sustained for more than 20 years. These operations will make Grasberg the second largest mine in the world.