Responding to a recent decline in copper prices resulting in reduced capital expenditures and lower production levels, and operating, administrative and exploration costs, Phoenix-based Freeport-McMoRan announced Aug. 27 that it has revised capital and operating plans.
Freeport-McMoRan is undertaking aggressive actions to modify its operations and spending plans to enhance its financial performance. The course of action, taken subsequent to the firm’s previously announced review of operating plans for its mining business, was made in response to recent declines in commodity prices and the current weakness in global economic conditions.
Freeport-McMoRan's global mining business strategy has focused on completing three major organic growth projects in the U.S., South America and Africa along with long-term development plans in Indonesia, while positioning the company for long-term free cash-flow generation to be used for debt reduction and returns to shareholders.
“The steps…to reduce costs and capital expenditures will strengthen our financial position during a period of weak and uncertain market conditions and preserve our large resource base for improved future market conditions,” Chairman James Moffett and vice chairmen Richard Adkerson and James Flores said. “We appreciate the support and focus of our global organization as we execute these plans. Our high quality portfolio of long-lived assets, flexible operating structure and experienced management team provide a solid base to address the current market conditions while maintaining an attractive portfolio of assets positioned for long-term success.”
After incorporating today’s announcements and previously announced reduced oil and gas expenditures, 2016 capital expenditures are expected to decline to $4 billion.
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