In response to falling prices for oil and copper, Freeport-McMoRan (FCX) said it would revise its oil and gas capital spending plans, curtail some copper and molybdenum production, and suspend its common stock dividend. In addition to previously announced actions, FCX is now planning a full shutdown of its Sierrita mine in Arizona and is adjusting its operating plans from its primary molybdenum mines, which will increase its curtailments to approximately 350 million lbs per year (lb/y) of copper and 34 million lb/y of molybdenum.
The company previously announced curtailments at its North and South America mines totaling 250 million lb/y of copper and 20 million lb/y of moly. At that time, FCX also said it would cut its capital spending by 25% for its mining business for 2016 (from $2.7 billion to $2 billion, including $600 million in sustaining capital).
FCX said it continues to evaluate its operating plans for the mines and will make further adjustments as required. The company is also exploring other alternatives, such as the potential sale of minority interests in certain mining assets and other actions to provide additional proceeds for debt reduction.
In a joint-statement, James R. Moffett, FCX chairman, and Richard C. Adkerson, vice chairman, president and CEO for FCX, said, “While copper prices have weakened in recent weeks and the near-term copper outlook is uncertain, we view the medium and longer term outlook positively, supported by copper’s important role in the global economy and limitations on global supplies. As we approach 2016, we are positioning the company for free cash flow generation in a weak commodity price environment and remain focused on actions to reduce debt.”