| Freeport-McMoRan’s Cuts Energy Capex but Spares Mining Projects | |
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Freeport-McMoRan Announces New Measures to Stay Afloat (Continued from Prior Part) Energy capex
Freeport-McMoRan’s (FCX) energy business has long been a bone of contention with investors. Many argue that the company shouldn’t have ventured in to energy exploration at all, stretching its balance sheet in the process. But now, Freeport-McMoRan is looking at “strategic alternatives” for its energy business.
Strategic path
The company has not yet decided on the strategic path that the energy business will pursue. Still, it announced further capital expenditure cuts in its energy business. The company plans to spend $1.8 billion in 2016 and $1.2 billion in 2017 on energy capex. The capex plan has been downwardly revised from the prior guidance of $2 billion in spending in 2016 and 2017. The response was necessitated as a result of a steep fall in crude oil prices. You can see the recent price movements in Freeport-McMoRan, copper, and WTI in the chart above.
Mining projects
The company hasn’t announced capex cuts in its mining business. It’s in the midst of an expansion of its Cerro Verde mine. The company expects incremental annual production of 600 million pounds of copper and 15 million pounds of molybdenum after the project completes.
Freeport-McMoRan is also expected to invest $15 billion in its Grasberg mine in Indonesia (EIDO) over the next few years. But this will only happen if it’s able to sign a long-term agreement with the Indonesian government. Rio Tinto (RIO) is Freeport-McMoRan’s partner in the Grasberg mine.
Please note that in the longer term, copper looks better placed than other industrial metals. You can read Copper’s Long-Term Outlook Looks Better to learn more. Southern Copper (SCCO) and Turquoise Hill Resources (TRQ) are among the major pure-play copper producers.
In the next part of this series, we’ll analyze what investors make of FCX’s dividend suspension.
Continue to Next Part Browse this series on Market Realist:
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Freeport McMoRan Copper and Gold Inc.
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PRODUCER |
CODE : FCX |
ISIN : US35671D8570 |
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ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
Freeport McMoran is a gold and copper producing company based in United states of america. Freeport McMoran produces gold, copper, cobalt, molybdenum and silver in Chile, in Congo Dem. Rep. of, in Indonesia and in Peru, develops copper in Peru, and holds various exploration projects in Chile. Its main assets in production are CANDELARIA, EL ABRA, CHINO - MILL, HENDERSON, MIAMI - ROM LEACH, MORENCI - MILL, OJOS DEL SALADO, MORENCI and MORENCI - ROM LEACH in Chile, GRASBERG, SIERRITA and BAGDAD in Indonesia, TENKE FUNGURUME and TYRONE in Congo Dem. Rep. of and CERRO VERDE in Peru, its main asset in development is SAFFORD in Peru and its main exploration properties are BAGDAD - ROM LEACH and CHINO - ROM LEACH in Peru and CERRO VERDE - MILL, CERRO VERDE - CRUSHED LEACH, CERRO VERDE - ROM LEACH, EL ABRA - ROM LEACH and CLIMAX in Chile. Freeport McMoran is listed in Germany and in United States of America. Its market capitalisation is US$ 72.6 billions as of today (€ 68.1 billions). Its stock quote reached its lowest recent point on March 06, 2020 at US$ 10.00, and its highest recent level on April 18, 2024 at US$ 50.16. Freeport McMoran has 1 448 000 000 shares outstanding. |