| Falling Commodity Prices Leave Few Options for Freeport-McMoRan | |
| | |
|
Freeport-McMoRan’s 2Q15 Earnings: An Investor's Guide (Continued from Prior Part) Falling commodity prices
In Freeport-McMoRan’s (FCX) 2Q15 earnings conference call, CEO (chief executive officer) Richard Adkerson remarked that “all options are on the table,” given the falling commodity prices. In this part of the series, we’ll explore what strategic alternatives Freeport might have under the present market scenario. Currently, Freeport forms 2.8% of the Materials Select Sector SPDR ETF (XLB) and 3.98% of the SPDR S&P Metals and Mining ETF (XME).
Equity issuance
The above graph shows the recent correction in copper prices. Copper is testing its six-year lows. This has had a negative impact on the share price of all copper producers, including Southern Copper (SCCO) and Teck Resources (TCK).
Freeport’s share price is currently trading near its eight-year low. Freeport might not go for an equity issuance right now, as it could mean value destruction for Freeport investors. However, an equity issuance of Freeport’s Indonesian operations might be a possibility. Under its agreement with the Indonesian government, Freeport has to divest 30% stake in Indonesian mines to the Indonesian government or its citizens.
Asset sales
Asset sales could be another strategic option for Freeport. However, looking at the current market scenario, any company looking to sell commodity assets would have to settle for a lower price. Earlier, Freeport shelved its asset sales program, as it has not been able to strike deals at the expected price.
Freeport hinted at curtailing some high-cost mines as it did in 2008. Curtailing high-cost mines helps companies improve their competitive positioning on the global cost curve. Aluminum companies, including Alcoa, have shelved several of their high-cost smelters over the last couple of years.
What’s Freeport’s outlook under the current market scenario? We’ll explore this in the next part of this series.
Continue to Next Part Browse this series on Market Realist:
|
|
|
Freeport McMoRan Copper and Gold Inc.
|
|
PRODUCTEUR |
CODE : FCX |
ISIN : US35671D8570 |
|
| |
ProfilIndicateurs de MarchéVALEUR : Projets & res.Communiqués de PresseRapport annuelRISQUE : Profile actifsContactez la cie |
Freeport McMoran est une société de production minière d'or et de cuivre basée aux Etats-Unis D'Amerique. Freeport McMoran est productrice d'or, de cuivre, d'argent, de cobalt et de molybdène au Chili, au Perou, en Indonesie et en Republique Democratique Du Congo, en développement de projets de cuivre au Perou, et détient divers projets d'exploration au Chili. Ses principaux projets en production sont CANDELARIA, EL ABRA, CHINO - MILL, HENDERSON, MIAMI - ROM LEACH, MORENCI - MILL, OJOS DEL SALADO, MORENCI et MORENCI - ROM LEACH au Chili, GRASBERG, SIERRITA et BAGDAD en Indonesie, TENKE FUNGURUME et TYRONE en Republique Democratique Du Congo et CERRO VERDE au Perou, son principal projet en développement est SAFFORD au Perou et ses principaux projets en exploration sont BAGDAD - ROM LEACH et CHINO - ROM LEACH au Perou et CERRO VERDE - MILL, CERRO VERDE - CRUSHED LEACH, CERRO VERDE - ROM LEACH, EL ABRA - ROM LEACH et CLIMAX au Chili. Freeport McMoran est cotée aux Etats-Unis D'Amerique et en Allemagne. Sa capitalisation boursière aujourd'hui est 70,0 milliards US$ (65,4 milliards €). La valeur de son action a atteint son plus bas niveau récent le 06 mars 2020 à 10,00 US$, et son plus haut niveau récent le 25 avril 2024 à 48,36 US$. Freeport McMoran possède 1 448 000 000 actions en circulation. |