PHOENIX (AP) -- Activist investor Carl Icahn said late Thursday that he has taken an 8.5-percent stake in Freeport-McMoRan, just hours after the mining company announced cost cuts and lower spending in response to declining copper prices and soft economic conditions worldwide.
Shares of the Phoenix company surged 29 percent to $10.19 after it announced the spending reductions, although the stock is still down 72 percent in the past year. On Wednesday it reached its lowest price in 12 years. After Icahn disclosed his stake, the stock gained another 19 percent in extended trading, to $12.15.
Icahn said he wanted to discuss cuts to Freeport's operations and capital spending, and might seek representation on the board. According to FactSet, Icahn is now Freeport-McMoRan's largest shareholder.
In a form filed with the Securities and Exchange Commission, Icahn said he had not started talks with Freeport-McMoRan as of Wednesday. The filing said Icahn wants to talk to management about its capital spending, executive compensation practices, capital structure, and discuss curtailing its high-cost production operations. He disclosed ownership of 88 million shares.
Freeport said it maintains an open dialogue with its shareholders and welcomes their input. It pointed to spending cuts it has already announced.
Third-quarter copper prices are approaching a six-year low, the company said Thursday, and oil prices are at their lowest levels in six years. Before the market opened, Freeport-McMoRan said it will reduce copper sales by about 150 million pounds per year in 2016 and 2017 and cut 2016 unit site production by 20 percent. It also plans to slash 2016 minerals exploration costs from $100 million to $50 million. It also plans to cut about 10 percent of employees and contractors at U.S. mining operations.
Earlier this month, the company said it would cut back on spending by its oil and gas business.
Freeport-McMoRan said it now expects $4 billion in capital spending in 2016, down from its prior estimate of $5.6 billion. Its 2015 capital spending budget currently stands at $6.3 billion.
Signs are also mounting that growth in China, the second-largest economy in the world, is slowing down. That's making investors anxious about the health of the world economy. Those fears led to a sell-off in stocks Friday and again on Monday, when China's main stock market took its biggest dive in eight years. China and world markets have since recovered some of their losses.