FCX recognizes that mining impacts the natural environment. Our goal is to conduct our mining and processing operations in a manner that minimizes adverse impacts on the environment and supports protection of the ecosystems through responsible environmental stewardship.
We believe environmental protection and stewardship are the keys to ensuring the long-term viability of our business, including maintaining the necessary support from our host communities and governments. We are committed to sound environmental practices at all of our operations with a focus on continuous improvement.
Our workforce incorporates environmental awareness into our daily activities and implements actions necessary to protect the environment. This commitment is reflected in the highest level of our executive management, and the Board’s CRC provides oversight to management on the direction and effectiveness of our environmental practices, policies and programs.
Our Environmental Policy serves as the framework for the protection of natural resources in the regions where we live and work. In addition to maintaining compliance with laws and regulations, our policy objectives are to minimize environmental impacts using risk management strategies based on valid data and sound science.
Our Policy also requires that we review and account for the environmental effects of our activities throughout the mining life cycle, and we plan and conduct our operations in a manner that optimizes the economic use of resources while minimizing adverse environmental effects.
All of our mining and mineral processing operations and technology centers maintain Environmental Management Systems (EMS) certified to the ISO 14001:2015 standard. As part of our EMS, our workforce is trained on site- specific subject areas, receives annual environmental refresher training and is supported in the field by environmental professionals through our Boots in the Field program.
Site management teams identify, manage and mitigate environmental risks through our Risk Register and the use of environmental critical control systems designed to prevent significant environmental incidents from occurring at our operations. Critical controls are particularly focused on the elimination of unplanned off-site releases and prevention or minimization of impacts to water and other natural resources.
At the corporate level, we maintain subject matter experts (SMEs) who train, develop and support site teams, routinely conduct site visits and manage a group of site-based SMEs. Collectively, they are responsible for building technical expertise, ensuring consistency in our environmental programs and sharing best practices.
The EMS at each of our operations are independently audited on an annual basis. In 2020, we used a virtual audit format to complete internal EMS audits at seven locations and environmental compliance audits at another two locations. Our facilities were inspected by governmental regulatory agencies 58 times and several were conducted virtually. Inspections were down significantly year over year due to COVID-19 travel restrictions and safety protocols. Early in 2020, we revised operating plans due to COVID-19, which included suspending operations at our Chino mine, lowering mining rates at El Abra and deferring all nonessential projects. Additionally, Cerro Verde’s mining and milling rates were impacted by the government- mandated temporary shutdown. As a result, many of our environmental indicators are improved year over year, including water use, GHG emissions, air emissions and waste.
As part of our environmental management commitment at PT-FI, external audits have been undertaken on a routine basis since 1996. The next audit was scheduled for completion in 2020; however, this was delayed due to the pandemic. Subject to global health conditions, we will seek to initiate the audit in the fourth quarter of 2021. An executive summary and responses to the most recent 2017 audit recommendations are posted on our website and will be updated once the new audit is completed.
All operations have corrective and preventive action programs associated with the overarching EMS as well as audit and inspection findings. These actions are reviewed by corporate SMEs to ensure such measures are robust and institutionalized for the future.
For 2020, FCX had two global environmental targets: (1) incur zero environmental penalties over $100,000 on an individual basis and (2) incur zero significant environmental events as defined in our Risk Register process. We met both targets in 2020.
Fines paid in 2020 included one Notice of Violation (NOV) at Sierrita for a dust event arising from a tailings impoundment in 2020 ($55,000), a fine for failure to obtain a CO2 permit at Rotterdam for the period of 2016-2019 ($12,000) and a permit deviation at El Paso ($100).
Typically, when our operations have received a NOV from a regulatory agency, the citations have involved brief and minor exceedances of permit conditions or other record-keeping violations.
We are committed to constantly improving our environmental performance across our operations. For example, to address the ongoing dust occurrences at Sierrita, we formed a cross-functional team to capitalize on expertise across different areas, are testing new dust suppression products, and are using satellite imagery and drones to identify areas in need of dust suppression.
ENVIRONMENTAL COMPLIANCE INDICATORS
WHY IT MATTERS
FCX recognizes climate change poses considerable near and long-term challenges for society and to our own operational and financial performance. Mining is energy-intensive and generates significant greenhouse gas (GHG) emissions that contribute to climate change. However, copper plays an essential role in the technologies needed to develop and deliver low carbon energy, including solar, wind and energy efficient technologies, which are critical to support the global energy transition to meet the Paris Agreement on climate change.
As one of the world’s largest copper producers, FCX understands its critical role in the low-carbon energy transition. We remain dedicated to supplying the global economy with responsibly produced copper and operating in a manner that manages and mitigates our GHG emissions and other climate-related risks.
In 2020, we published our inaugural climate report, established our first GHG emissions reduction target for the Americas and committed to aligning our climate strategy and related disclosures with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) in the coming years. We also formalized our climate change strategy, which is founded on three pillars: Reduction, Resilience and Contribution.
Reduction: We strive to manage, mitigate and reduce our GHG emissions where possible. As a first step, in 2020, we established our initial public target to reduce our GHG emissions in the Americas by 15% per ton of copper cathode by 2030 from our 2018 baseline.
Resilience: We strive to enhance our resilience to both physical and transitional risks associated with climate change for our operations, our host communities and our stakeholders. This includes working proactively to analyze and prepare for extreme weather events, water stress and other climate change impacts.
Contribution: We strive to be a positive contributor beyond our operational boundaries by responsibly producing copper and molybdenum for the energy transition. This includes collaborating with partners in our value chain, with the ultimate goal of meeting the goals of the Paris Agreement.
To learn more about our approach to climate, including our strategy, please read our inaugural 2019 Climate Report available on our website. We also will be publishing our 2020 Climate Report later this year.
Our global annual absolute GHG emissions range between 7-9 million metric tons per year, with approximately 70% from our FMC operations (including FMC Mining and Downstream Processing) and 30% from PT-FI in Indonesia. Our FMC emissions are dominated by Scope 2 emissions as a result of purchased electricity while PT-FI’s are dominated by Scope 1 emissions, resulting from coal used to generate reliable electricity for our remote operations in the eastern province of Papua. Our current Scope 3 emissions estimates are small in comparison to our Scope 1 and 2 emissions (less than 10% of total Scope 1 and 2 emissions), largely due to the minimal downstream processing required to transform copper cathode into various forms such as wire for electrical cables. In 2021, we are expanding our Scope 3 calculations to include additional categories in line with the WRI / WBCSD Greenhouse Gas Protocol, as a result our Scope 3 calculations may change. We plan to provide more detail in our upcoming 2020 Climate Report.
In 2020, our absolute Scope 1 and Scope 2 global emissions decreased by 8% from the prior year to 7.1 million metric tons, which was driven predominantly by reduced production and stripping at our Americas operations due to operational changes associated with our COVID-19 response, uncertain economic conditions and PT-FI operations transition from open pit to underground during the year.
Our 2020 absolute Scope 1 and Scope 2 global emissions are 21% lower than in 2016 as a result of significant improvements in energy efficiency and grid decarbonization, as well as periods of reduced mining rates at PT-FI.
In 2020, we advanced plans for achieving our 15% reduction target in the Americas. This included progressing evaluation work on our renewable energy opportunities in the Americas, which is focused on reducing Scope 2 emissions. We signed an agreement at our El Abra operations in Chile to source 100% of its energy consumption from renewables starting in 2021. We also continued assessing opportunities to reduce our Scope 1 emissions at our mines.
The graphic to the right illustrates the absolute emissions and production intensity performance of our Americas copper operations (excluding our rod mills) and project what our performance would have been "Business as Usual" in the absence of innovation. On an absolute basis, we have reduced our total GHG emissions for the Americas business to approximately 4.6 million metric tons, which is 6% lower than 2019 total emissions and 24% lower than our Business as Usual projections. Performance against our 15% intensity target is shown with the dotted copper line. In 2020,our performance against our target deteriorated slightly due to reduced production and other reductions following operational changes to manage COVID-19 and economic uncertainty earlier in the year.
PT-FI accounts for approximately 30% of total FCX emissions and approximately 50% of the company’s total direct Scope 1 emissions. This is primarily related to its self-generation of coal-fired electricity. During 2020, PT-FI fully transitioned from open-pit operations to underground operations. As ramp-up of the underground operations reach full capacity, PT-FI’s overall energy requirements are expected to increase due to ventilation needs and ore body characteristics that require more processing of ores. To support additional energy requirements, PT-FI is building a new dual-fuel (diesel and natural gas) 128MW power plant, which is expected to begin operating in late 2022. The plant will be commissioned using biodiesel, and the team is evaluating options for using liquefied natural gas (LNG) in the future.
In addition, PT-FI plans to evaluate other alternative energy options and implement a number of energy efficiency projects. This evaluation work will help contribute to establishing a PT-FI GHG emissions reduction target that is appropriate for our business needs and supports Paris Agreement commitments. We look forward to elaborating on this work in our forthcoming 2020 Climate Report.
In 2021, we also plan to begin the process of assessing our 2030 GHG emissions reduction target for the Americas through the Science Based Target initiative (SBTi) to evaluate whether it is in line with the Paris Agreement, limiting global warming to well below 2 degrees Celsius above pre-industrial levels and pursuing efforts to limit warming to 1.5 degrees Celsius.
Companies face two main categories of climate-related risks — physical and transitional. Physical risks are the potential impacts caused by extreme weather events, drought-induced fires and longer-term, sustained changes to precipitation and temperature patterns at our operations, in our host communities and across our value chain (both upstream and downstream). Transitional risks are financial and reputational risks that may result from the shift to a low-carbon economy, such as capital costs for fuel switching, carbon taxes, carbon emissions caps, renewable energy standards and shareholder resolutions. In addition, as a result of the transition, the company also may see significant opportunities for growth in the use of copper and molybdenum, given their downstream uses and resulting roles in the energy transition.
As part of our climate change strategy and commitment to TCFD conformance, in 2020, we initiated a comprehensive climate change scenario analysis with support from a third-party consultant to identify potential climate-related risks and opportunities across the business. We are evaluating the risks and opportunities across three different 2050 climate scenarios as shown in the graphic below: No Climate Action (i.e., mostly unconstrained GHG emissions), Insufficient Climate Action (i.e., moderately constrained GHG emissions) and Aggressive Climate Action (i.e., action in line with the Paris Agreement goals of limiting global temperature rise well below 2 degrees Celsius by the end of this century). Each scenario is assessed against two timeframes (2030 and 2050) to understand how the risks and opportunities may evolve for the business.
In early 2021, we enhanced our climate team by hiring experts to support work on our life cycle assessments (LCA) in order to provide customers with carbon footprint data on our products. We now are updating our LCA models in concert with the International Copper Association’s (ICA) initiative to update the global cathode average LCA.
In addition, we are participating in the ICA Decarbonization Roadmap project to develop a footprint methodology for copper and are working with the London Metals Exchange to include these data in their forthcoming Digital Passport platform. This platform will enable companies to attach data on environmental and social attributes of their products to their electronic contracts so that customers can use the information in their purchasing process.
WHY IT MATTERS
Access to safe water is a fundamental human right. Water is essential to the well-being of our communities and the environment and is necessary for our mines, smelters, processing facilities and reclamation projects. Many of our operations are in arid environments where competition for water supply is significant. Although we typically have sufficient water for our Indonesia operations, the PT-FI Highlands area receives considerable rainfall that makes management of excess water supply the primary challenge. The unique circumstances at each of our operations reinforce the critical importance of managing the impacts of our activities on water availability and quality, optimizing our water utilization and respecting the rights of others.
FCX believes effective water stewardship means maximizing our water use efficiency so that we can minimize our use of new freshwater. This includes shifting our water supplies to more sustainable sources, minimizing negative impacts from our operations on water quality and availability in a local catchment, and supporting the development of access to previously unknown, unavailable or undeveloped water resources.
In addition to focusing on our own water-related supply risks surrounding our operations, water stewardship also means we are focused on promoting long-term water security for all. We recognize the importance of working collaboratively with our stakeholders to secure access to water in a socially and environmentally responsible manner, and we are dedicated to improving our water programs over time.
Policies & Programs
Globally, our objective is to identify, manage and mitigate both our current and future water-related risks to secure the necessary water resources vital to support our operations over the long term, while equitably supporting the rights and well-being of our local community partners and ecosystems.
Our global water management program goals are the following: (1) improve water use efficiency in our processes, (2) minimize use of freshwater at our operations, (3) reduce our water footprint by transitioning to renewable or recycled water sources, and (4) monitor our impact on the surrounding communities and environment by continually reviewing water supplies and future requirements.
We support, and are in the process of implementing, the ICMM Water Position Statement, which outlines our commitment to public reporting and responsible water use, including strong and transparent water governance, effective water management and collaboration towards achieving responsible and sustainable water use. In 2020, we published our 2019 Water Report to enhance transparency and accountability of our water management.
UNDERSTANDING OUR WATER RISKS
Our global operations are in geographically and climatically diverse locations that range from arid deserts in Arizona, U.S., to extremely arid and high altitudes in the Atacama Desert in Calama, Chile, to one of the wettest places on earth in Papua, Indonesia. In many instances, we share a freshwater source or catchment with other users, such as local communities, municipalities and agricultural or industrial organizations.
The number of water risk regions with poor water quality or scarce supply is increasing globally. In some regions, water stress is increasing due to growing populations in communities where multiple new regional users are accessing limited freshwater sources. Climate change is expected to exacerbate these trends.
To effectively manage our water-related risks, we seek to understand the various and continually changing physical environments, hydrological systems and sociopolitical and regulatory contexts of each of our operations. The context and near-term water supply risks that exist near our operations are summarized in the table below. Risk factors include climate conditions, water sources, baseline water stress, excess water and access challenges.
This water risk assessment is an iterative process that we aim to update periodically. Over time, we plan to assess and, when appropriate, integrate additional critical risks to our water supply risk analysis – such as water quality, reputational risks and shared water resource management – and in due course, the potential longer-term impacts associated with climate change.
Our company-wide water balance demonstrates how much water we withdraw, consume and discharge. We obtain new water through permits, legal rights and leases for groundwater, including the dewatering of our mines, rainfall and surface water sources, such as lakes or rivers. At certain operations, water also is sourced from stormwater and third-party sources (predominantly effluent). New water withdrawn from these sources, together with reused and recycled water from our ore processing plants, water treatment plants and tailings facilities, make up the total water used across our global operations.
Each site maintains water balance analyses to assess their water use, consumption and discharge quantities. These analyses, which include the use of ground water and hydrologic models, are used to track performance and to understand our water balance and water availability.
With this information, we can identify opportunities to minimize water loss, such as evaporation, maximize recycle and reuse water, and maintain compliance with water quality standards. Taken together, these ongoing studies inform our efforts to reduce our overall water utilization – including requirements for new freshwater – where operational efficiencies and production requirements permit.
Water Use Efficiency
We used less water in 2020 compared to prior years because of mill curtailments at Cerro Verde, Morenci and Chino in response to COVID-19 and global economic uncertainty. Our objective to maintain high rates of recycled or reused water remained unchanged, and our efficiency performance has exceeded 85% in recent years. In 2020, our operations used 1,492,352 thousand cubic meters of water, including new freshwater withdrawals of 261,299 thousand cubic meters. Of our total water use, 82% was from recycled or reused sources. By accounting for discharge quantities of 101,963 thousand cubic meters, our water use efficiency was 89% for 2020.
RESILIENCE & PREPARING FOR THE LONG TERM
Some of our operations are in challenging environments where enhancing resilience to the impacts of water risks is a critical part of our daily operations. This includes the health, safety and production risks of heavy rains, arid environments or heat-related occupational illness. To prepare our operations for potentially severe weather-related events in the future, we strive to take a holistic approach to risk management and preventive planning.
Company-wide processes to address risks, including climate, cover the full life cycle of our assets – from a pre-project sustainability review process to resiliency planning for reclamation and closure. Upon completion of our climate scenario analysis that is currently underway, we will seek to enhance these processes with any key findings. Each of our sites use water- balance models with robust precipitation forecast mechanisms, including available information on historical weather patterns at the regional level that provide data on potential climate patterns
These models consider the effects of short-term extreme weather events as well as prolonged wet and dry seasons and provide the teams the ability to consider various scenarios in our risk reviews. As information in this area progresses and becomes more actionable, we have processes in place that will allow us to consider their effects and provide the teams the ability to adjust for specified climate scenarios.
We recognize that climate change can be a potential amplifier of existing water risks. As part of our climate strategy and commitment to TCFD reporting, in 2020, we initiated a comprehensive climate change scenario analysis with support from an external third-party consultant to identify potential climate- related risks and opportunities across the business, which includes water. We will be reporting on the scenario analysis and key recommendations to enhance resilience in our upcoming 2020 Climate Report.
WHY IT MATTERS
Biodiversity is critical to maintaining resilient ecosystems, which provide people with valuable resources, like food and water, necessary to support a good quality of life. The impacts of climate change, such as prolonged droughts and wildfires, are having a significant impact on biodiversity globally. FCX is committed to proactively managing the impacts of our mining operations on the environment, including its biodiversity.
FCX seeks to avoid or minimize the adverse impacts of our operations on biodiversity and ecosystem services while promoting opportunities to contribute to the conservation and enhancement of biodiversity in the areas where we operate.
Our conservation initiatives aim to produce benefits for both biodiversity and people, build trust, and support our social license to operate. We seek to engage our employees, local communities and other interested stakeholders in this work. We foster diverse partnerships with global stakeholders across private, public, and civil sectors to achieve greater accountability and promote the long-term efficacy for our biodiversity projects. These collaborations often serve as the basis for our community outreach and STEM education opportunities to help build capacity for learners of all ages.
In 2020, we continued our efforts to implement the mitigation hierarchy – a framework that emphasizes best practices for managing biodiversity and ecosystem services through the avoidance, minimization, restoration and offsetting of impacts. During the year, we developed a global guidance for consistent and rigorous application of the mitigation hierarchy through which we aim to manage risks and potential impacts with the long-term ambition of "no net loss" for new mines and major expansion projects at existing mines.
We recognize the mitigation hierarchy is most effective when implemented during the earliest phases of project planning to help maximize opportunities for avoidance and minimization of impacts. In 2021, we are working to integrate the hierarchy into our existing project development process, and we are training our environmental and operational teams to support its routine use.
Policies & Programs
In addition to our Environmental Policy, which states our commitment to contribute to the conservation of biodiversity, and our EMS, our framework for understanding the potential impacts of our operations on biodiversity, we implement the following:
ICMM Position Statement on Mining and Protected Areas – We address the commitments in our operational practices, including committing to no mining nor exploring in UNESCO World Heritage Sites.
Wildlife Habitat Council’s Conservation Certification (WHC) – We participate in the certification program, which formally recognizes meaningful biodiversity conservation, environmental education and community outreach programs. Eighteen of our operating sites and facilities currently are certified through WHC, 14 of which are recognized with gold-tier certifications.
We implement a variety of programs and strategies at our operations to proactively identify and mitigate biodiversity risks while promoting conservation opportunities. All of our North American sites implement Wildlife Protection Plans based on adaptive management principles to effectively address biodiversity risks resulting from operational and ecological changes at the sites. Several sites also implement risk-based Avian Protection Plans that focus specifically on minimizing potential risks to migratory birds.
In South America, our El Abra operations in Chile and Cerro Verde operations in Peru implement programs to protect and enhance biodiversity within the area of influence of their mining operations. In addition, the scope of the biodiversity program at El Abra includes the Ascotán salt flat area. These programs are designed to mitigate impacts to significant biodiversity resources.
Education & Biodiversity Outreach Programs
In 2020, many of our typical in-person biodiversity and conservation education activities shifted to virtual activities. To commemorate Earth Day 50, FCX and WHC promoted at-home activities, such as backyard invasive species removal and pollinator garden plantings. During International Bat Week, at our Sierrita, Bisbee, Safford and Morenci operations, we held small, socially distanced events to plant agaves, an important source of food for nectar-feeding bats.
Our Atlantic Copper operations in Huelva, Spain, sit along the banks of the Odiel River and are adjacent to the Marismas del Odiel Natural Park, a UNESCO Biosphere Reserve. In 2020, the site followed COVID-19 mitigation protocols and continued its School of Explorers project, where students stay five days in the park to learn about the importance of the preserve and biodiversity. More than 3,750 children have participated in the project since its inception in 2012.
We conduct site-specific, multi-year biodiversity programs either voluntarily or for regulatory purposes. Due to COVID-19 restrictions in 2020, some of these programs were temporarily deferred. These programs are designed to address the most significant biodiversity issues at each site, including the following:
PT-FI’s operations and support area encompass multiple ecosystems and host one of the richest and most biodiverse regions in the world. From the mangrove forests on the coasts, the land blends into a swamp forest, then into the Lowland rainforests, heath forests, montane forests, and finally, subalpine and alpine forests in the Highlands.
The PT-FI area is adjacent to the Lorentz National Park, the largest protected area in Southeast Asia and the only protected area in the world that incorporates continuous intact tracts of ecosystems from alpine to tropical marine environments, including extensive Lowland wetlands. In 1999, Lorentz National Park was declared a World Heritage Site by the United Nations Educational, Scientific and Cultural Organization (UNESCO).
Conserving and protecting Papua’s biodiversity and ecosystems is a high priority for both PT-FI and FCX. Since 1994, PT-FI has collaborated with national and international scientists on comprehensive surveys of vegetation, mammals, birds, amphibians, reptiles, freshwater fish, aquatic insects and terrestrial insects. These surveys are conducted regularly to provide the latest information to better understand these ecosystems and potential mine- related impacts on biodiversity. Using the gathered information, we develop appropriate biodiversity conservation programs using principles of restoration ecology for rehabilitation and restoration of disturbed areas in the Grasberg minerals district.
Through PT-FI’s biodiversity programs, we recognize the important role biodiversity plays in sustainability and seek to establish strong partnerships with multiple stakeholder groups involved in conservation and natural resource management, including governments, NGOs, universities, and research organizations and citizens. PT-FI supports management of local biodiversity for the region, including monitoring, restoration, reclamation and reforestation, and provides extensive biodiversity education, research and information opportunities.
Biodiversity Education & Outreach Programs
Education and outreach are major focuses of PT-FI’s biodiversity efforts, including construction of wildlife sanctuaries and the creation of the Natural Succession Discovery Park on a former tailings disposal area to serve as an outdoor education classroom. PT-FI has established wildlife areas and partners with local schools for education outreach and provides internships at its on-site nursery for high school and college students.
In 2020, before COVID-19 restrictions, over 1,000 schoolchildren visited the Natural Succession Discovery Park and 100 volunteers supported PT-FI planting mangroves in the estuary.
Research & Monitoring
PT-FI conducts extensive research and monitoring in area ecosystems ranging from approximately 4,000 meters above sea level to coastal and marine areas. Routine flora and fauna monitoring is conducted through collaboration with consultants, research organizations and universities. Existing biodiversity research on Papua has been limited with most research and publications available focusing on Papua, New Guinea, which is to the east of Papua, Indonesia.
Continued Re-Vegetation & Restoration
In coastal areas throughout the world, mangroves are decreasing due to erosion or to the conversion of the mangrove for agriculture. PT-FI actively works to create and establish new mangrove habitats in the new areas created by sediment at the Modified Ajkwa Deposition Area (ModADA) by cultivating seeds of mangrove trees for two to three years and then propagating them. In particular, the Ajkwa and Waii Islands in the Ajkwa Estuary in the Lowlands have seen accelerated mangrove colonization resulting from approximately 401 hectares of total mangrove planting through 2020.
Progressive Reclamation & Restoration
The sub-alpine ecosystems at PT-FI in the Highlands have resulted in reclamation of almost 432 hectares of overburden stockpile areas with native plant species.
Protection of Flora & Fauna
Flora and fauna from Papua often become the object of illegal trade. Countering illegal wildlife trade is a priority for Papua’s natural resource agencies and part of PT-FI’s commitment to biodiversity conservation. PT-FI cooperates with the Indonesia Animal Rescue Center, Papua Regional Police, Forest Protection and Nature Conservation, Forest Rangers, Forestry Department, Lorentz National Park Center, and Wasur National Park Center to repatriate protected animals to their habitats. In 2020, we supported and facilitated the translocation of Papuan endemic birds from North Sumatra back into Papua. This included three birds of paradise, 11 cockatoo, and one ecletus parrot. We also conducted repatriation of 23 Black capped lories, two rainbow lorikeet, two cockatoo to habitat in Kuala Kencana Forest and supported the repatriation of 40 pig-nosed turtles. To date, PT-FI has assisted in releasing back into their natural habitat more than 46,000 pig-nosed turtles, 162 black-capped lories, 21 dusky pademelons, seven yellow-crested cockatoos and six double-wattled cassowary.
WHY IT MATTERS
The health and safety of our workforce, host communities and the environment are fundamental to FCX’s extensive tailings management programs. Tailings are the finely ground natural rock particles or by-products that remain after the economically valuable minerals have been processed and extracted from the mined ore. Typically, our tailings comprise a slurry of finely ground natural rock particles, which are transported from processing facilities to management and storage facilities. We recognize a failure of tailings facilities and other impoundments at any of our mining operations could cause severe – and in some cases catastrophic – property and environmental damage as well as loss of life.
FCX has comprehensive measures in place to ensure our facilities are designed, built, operated and monitored to minimize risk to employees, neighboring host communities and the environment. We have a strong commitment from our Board and executive management to provide the necessary financial and technical resources to maintain the safety of our facilities and the integrity of our tailings management systems, with a focus on continuous improvement.
Our tailings management and stewardship program, which involves qualified external engineers of record and periodic oversight by independent tailings review boards and stewardship teams, adheres to applicable regulations and various national and international guidelines. The program also conforms with the tailings governance framework on preventing catastrophic failure of our tailings storage facilities adopted in December 2016 by ICMM.
In 2020, as members of ICMM, we supported development of and committed to working towards implementation of the new Global Industry Standard on Tailings Management (the Tailings Standard). The Tailings Standard was developed through an independent, multi-stakeholder process co-convened by the United Nations Environment Programme, Principles for Responsible Investment and ICMM following the tragic 2019 tailings facility collapse at Brumadinho, Brazil. Through our membership in ICMM, FCX played an active leadership role and provided constructive input in the development of the Tailings Standard.
Formally launched in August 2020, the Tailings Standard is the first global standard for tailings management that can be applied to existing and future tailings facilities. The Tailings Standard has been integrated into ICMM’s existing member commitments, and ICMM members have agreed that all tailings facilities with ‘Extreme’ or ‘Very high’ potential consequence ratings need to demonstrate conformance with the Tailings Standard within three years (by August 2023), and all other tailings facilities within five years (by August 2025). FCX currently is advancing internal plans to meet this commitment. Also in 2020, FCX chaired a subgroup of the ICMM Tailings Working Group to develop a guide to identifying and recommending best practices for the practical implementation of the Tailings Standard.
FCX affiliates in the Americas currently operate 17 active tailings storage facilities (TSFs) – 15 in the U.S. and two in Peru – and manage 56 inactive or reclaimed (closed) TSFs in the U.S.
Our objective is to have zero catastrophic structural failures of, and unplanned discharges from, any of our TSFs. Our programs consider the significant consequences that would result from a potential failure or unplanned discharge. To materially reduce the likelihood of failures and unplanned discharges, we employ substantial engineering expertise, technological monitoring (including remote sensing), and local and corporate management oversight to validate that these facilities are designed, built, operated and monitored to minimize risk to employees, neighboring host communities and the environment. These safeguards generally fall within four categories: (1) engineering and design, (2) rigorous adherence to construction and operational parameters through monitoring and use of technology, (3) multi-tiered oversight, and (4) adherence to practices grounded in continuous improvement and learning from past experiences, including industry failures and best practices. The safeguards are effectively implemented through the promotion of open and ongoing communication throughout the organization and a bias for action at all levels.
In a typical year, our EoRs and site engineers conduct in-person inspections of our TSFs multiple times, our TSTs visit all active sites and select inactive or closed sites, and our TRBs visit select sites as part of their quadrennial review schedule. This ongoing review and inspection process results in recommended actions, which we track until implemented.
In 2020, COVID-19 restrictions and travel bans prevented on-site visits from EoRs and TST / TRB members for most of the year, forcing us to place greater emphasis on remote monitoring to supplement inspections of our facilities. While remote technologies do not replace the benefits of on-the-ground inspections, the innovative systems we have proactively implemented in recent years to enhance our stewardship program enabled our monitoring and inspections to continue without significant interruption.
Some of our remote sensing technologies and platforms include various satellite systems and in-house Unmanned Aerial Systems. These data (generally optical and radar) combined with powerful geospatial software made it possible to quickly develop web-based and mobile computing applications, providing information and situational awareness to our engineers and operators despite reduced time in the field.
The data we collect is used to calculate engineering metrics, such as beach width, and to track general TSF operations, potential areas of movement, should that occur, and water body delineation over time.
Data also feeds our internal key performance indicators and Early Indicator Dashboard – the internal management tool we use to aggregate critical and key measures of our facilities and to track performance against third-party recommendations, key performance indicators and other metrics. In 2020, we migrated our Americas sites with operating TSFs to a new internal portal that we began developing in 2019. We migrated TSFs at our inactive and closed sites in the first quarter of 2021.
Increased use of remote technologies company-wide not only enhances situational awareness but also provides a frequently refreshed data set that our engineers and operators, both on-site and off-site, can use to make decisions daily. For example, sites use online imagery to monitor the location of their tailings ponds in relation to the outer slope of the embankment. Access to near-daily satellite imagery allows site-based engineers to safely monitor the location of these ponds and more efficiently plan their daily work. Remote sensing technology allows us to efficiently and accurately measure water on these large facilities.
For more information on our tailings management and stewardship program, including a detailed review of our tailings facilities and their consequence classifications, please our Tailings Management Documents section.
PT-FI operates a controlled riverine tailings management system implemented based on methods approved and permitted by the Government of Indonesia. Tailings are transported from the concentrating facility along with water and a small quantity of concentrating reagents. Reagents added as part of the concentrating process have been demonstrated to dissipate within a short distance of the concentrating facility.
The PT-FI tailings management system uses an unnavigable river to transport the tailings from the concentrator in the Highlands along with natural sediments to a large engineered and managed deposition area in the Lowlands, called the Modified Ajkwa Deposition Area or ModADA. The river is not used for potable water, agriculture, fishing or other domestic or commercial uses. Levees have been constructed on both the east and west sides of the ModADA to laterally contain the depositional footprint of the tailings and natural sediment within the designated area. Quantities of finer tailings and other sediments deposit in the estuary and the sea to the south.
Independent, environmental management expert audits have reaffirmed this system is the best site-specific management alternative given the topographical, seismic and geotechnical, geological, climatological, and environmental conditions of the area. It has been in service for more than 20 years and has performed safely and in line with initial design plans. A conventional style tailings dam in the Highlands would not be safe, stable, or effective.
In 2020, PT-FI initiated a new environmental impact analysis (AMDAL) in preparation for the proposed extension of the east and west levees to safely maintain the tailings within the ModADA deposition area. The public announcement and initial public consultations were safely completed in mid-2020 with the nearby Indigenous Amungme and Komoro villages in line with COVID-19 protocols. The consultations aimed to educate them about the AMDAL process and establish their community representatives for the AMDAL Review Committee, which will meet in 2021.
PT-FI and Indonesia’s Ministry of Environment and Forestry established a framework known as the Tailings Roadmap in December 2018 to support continuous improvement of PT-FI’s environmental practices. The framework includes the requirement for independent third parties to complete three studies focused on increasing tailings retention within the Lowlands, enhancing the protection of the coastal ecosystem and evaluating large- scale beneficial uses of tailings within Indonesia.
In 2020, the PT-FI team continued supporting the required Roadmap studies including: 1) an evaluation of the scalability and economic viability of using tailings in transportation infrastructure, such as roads and bridges, and building infrastructure, such as prefabricated building walls, 2) a re-examination of the riverine tailings management options including the potential for a new cross- levee, and 3) a valuation of the current estuary ecosystem status. Due in part to delays related to COVID-19 restrictions, these studies were not completed in 2020 and are now expected to be finalized in 2021.
PT-FI did meet its 2020 Tailings Roadmap commitment to increase tailings reuse by using more than one million metric tons of tailings as paste-fill in the Big Gossan Mine. PT-FI also is encouraging third-party use of tailings for infrastructure, however, the transportation costs may be economically prohibitive.
During 2020, PT-FI continued to advance work on a human health risk assessment to evaluate the potential impacts of tailings and mining waste in the Highlands, Lowlands and estuary areas. The ongoing study, conducted by third-party expert consultants with PT-FI support, is assessing potential exposure pathways including surface waters, groundwaters, sediments and soils, dust and terrestrial and aquatic tissues. The study is expected to be completed in 2021 and we plan to provide a summary of the results.
For more information on this topic, including our extensive biological monitoring system and beneficial use of tailings opportunities, refer to the Controlled Riverine Tailings Management at PTFI summary document. In addition, please see our Statement on Future Projects and Riverine Tailings.
WHY IT MATTERS
In addition to mining and mineral processing wastes, such as tailings, waste rock, overburden and slag, our operations generate non-mining waste, which requires proper end-of-life management. Responsible management of all these materials is critical to complying with environmental regulations, maintaining community and environmental health, and social acceptance of our operations.
FCX is committed to reducing our environmental impact, which includes the effective management of our mining and non-mining wastes alike. The volume of mining and processing wastes varies depending on site operating plans. These materials are typically managed in designated, engineered stockpiles or impoundments as discussed in more detail in the prior Tailings Stewardship section.
In addition to responsibly managing our mining and mineral processing waste, we continuously evaluate opportunities to reduce the quantity of non-mining waste generated. We implement robust practices to identify, categorize, store and manage non-mining wastes, and we strive to increase recycling and reuse of materials in our operations whenever possible. We evaluate our hazardous waste streams, and when possible, substitute materials with lower toxicity into our processes.
Policies & Programs
In addition to FCX’s dedicated TSTs responsible for managing our mining and processing waste, we also have a dedicated global waste management team composed of subject matter experts from across the company. The team is responsible for advancing our technical expertise and developing leadership skills through multi-site collaboration. Our experts provide guidance to support global consistency in our waste management programs and the company’s Environmental Policy. The program identifies best practices and opportunities for continuous improvement. We follow local and national regulations and seek to meet or exceed industry best practices for disposing responsibly.
In 2020, our mining and mineral processing wastes and our non-mining wastes were both down year over year, which was largely attributed to COVID-19 response and management, including revised operational plans at certain sites, deferred maintenance and the transition of certain staff to work from home arrangements.
We generated 259 million metric tons of tailings, 349 million metric tons of waste rock and overburden and 629 thousand metric tons of slag in 2020.
In addition to tailings, waste rock, overburden and slag, our operations also generate non-mining waste. Our non-mining wastes fall into two categories: (1) non-hazardous, such as tires, scrap metal, obsolete equipment, HDPE pipe, domestic waste and wood waste, and (2) hazardous, such as coal ash, water treatment sludge, chemicals, solvents, batteries, and reagent packaging.
In 2020, we generated approximately 229,300 metric tons of non-mining wastes, of which 32% was hazardous and 68% was non-hazardous.
When possible, our materials are evaluated for other end-of-life uses in accordance with applicable regulations and are recycled at our own operations or into the global value chain. Through our continuous improvement efforts, we have identified and implemented numerous waste minimization or recycling efforts across our operations. For example, from 2017-2020 we reduced the generation of hazardous wastewater treatment sludge at our Atlantic Copper smelter in Spain through operational improvements and process optimization resulting in a 43% reduction in sludge generated per ton of sulfuric acid neutralized. Coal Ash, a hazardous waste generated at PT-FI’s power plant in Indonesia, is fully reutilized to make concrete for site construction projects. In 2020, at our Morenci operations in Arizona, we identified a new opportunity to eliminate a waste stream that was previously landfilled by installing a screen to separate and recover ore and scrap metal and in recent years at our Miami smelter we have recycled slag, which provides iron to optimize hydro metallurgical metal recovery processes from leach ore.
WHY IT MATTERS
Mining requires the development of infrastructure such as open-pit mines, roads and processing facilities that can alter the natural environment. Mining companies are responsible for managing these impacts, which include reclamation of the land for post-mining use. The purpose of reclamation is to return areas impacted by mining and processing activities to a healthy state with lands that support productive post-mining land use. FCX understands that effectively reclaiming disturbed land and responsibly closing our mine sites is critical to maintaining the trust of our local communities, governments and other interested stakeholders.
FCX’s reclamation and mine closure planning processes are integral to our site planning and ongoing operations. We engage local communities, governments and other interested stakeholders early and often on these issues, and we seek to minimize land disturbances whenever possible.
At each of our operations, we have mine closure and reclamation plans with site-specific environmental measures designed to minimize long-term impacts, promote ecosystem re-establishment and protect the watersheds where we operate. To support future anticipated closure and reclamation costs, each operating mine site has asset retirement obligations that are estimated and accounted for in accordance with GAAP and are audited by an independent accounting firm.
Due to the geological nature of the deposits and large resource base, most of our mining operations are long-lived, so implementation of closure plans may not occur for years or decades in the future.
Our reclamation programs incorporate multiple aspects associated with environmental management and community well-being, such as water and air quality, erosion, wildlife and grazing habitats, and revegetation programs, working together to advance ecosystem reestablishment. Although our traditional post-mining land use has been focused on wildlife habitats, we increasingly are exploring opportunities for open spaces, wildlife habitats, grazing habitats, recreational and educational uses, renewable energy sites, and new industrial uses of our lands post-closure.