Freeport-McMoRan Cuts Capex 29%
August 27 2015 - 9:10AM
Dow Jones News
Freeport-McMoRan Inc. on Thursday announced a 29% cut to its
capital spending plans for 2016, the Phoenix-based miner's second
cut to expenditures in the past month.
Shares, down 66% this year, added 4.2% in premarket trading.
Freeport, which has been struggling with the impact of weak
commodity prices, said it now expects capital spending of $4
billion next year, down from its July estimate of $5.6 billion.
Freeport had said earlier this month that it would review its
mining operations, after announcing cuts to its oil-and-gas
spending for the coming years.
The forecasts include a 25% cut to mining spending and
reductions in copper sales and site production.
The company cited recent declines in copper prices, which are
nearing six-year lows, for the reductions.
Freeport said it still has a positive outlook on its business,
helped by limitations on copper supply.
The comments come after Freeport earlier this year cut its oil
and gas capital spending views for 2016 and 2017 by $900 million to
$2 billion a year. The company maintained its expectation for $2.8
billion in spending for this year.
Freeport said it also would look for strategic investors to help
fund development at oil and gas and mining properties.
The company had said in July that it was prepared to scale back
operations if commodity prices didn't recover after reporting its
second straight quarterly loss.
A downturn in commodity prices has hit miners across the board.
But Freeport is relatively fortunate to be mining copper and not
iron ore. Copper, which is used to make wiring for cars and
computers, and pipes for building, is scarcer than iron ore, a key
ingredient in steelmaking. And Freeport has managed to keep costs
at most of its mines far below current copper prices, helped by
lower oil prices, the strong dollar and mining in developing
countries.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
August 27, 2015 08:55 ET (12:55 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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