Freeport McMoRan Cost Reduction Plans Could Include Adjustments to Future Copper Production

Freeport McMoRan (NYSE:FCX) announced Tuesday that it will target significant reductions in capital spending and operating costs in its mining and oil and gas businesses. The changes come in light of weak market conditions for Freeport’s major products.
As quoted in the press release:

These plans will also incorporate potential adjustments to mine plans and future copper and molybdenum production volumes to reduce costs and preserve valuable resources for anticipated improved market conditions in the future. The company expects to complete this review promptly and will report its revised plans during the third quarter of 2015.
As previously reported, FCX has made substantial progress toward the completion of its major mining development projects, which are expected to result in increased near-term production, lower unit costs, declining capital expenditures and growth in free cash flow over the next several quarters and its oil & gas subsidiary filed a registration statement in June 2015 related to a potential initial public offering representing a minority interest in the entity. FCX has a broad set of natural resource assets that provide many alternatives for future actions to enhance its financial flexibility.

Heads of the company stated in the release:

We are responding aggressively to current market conditions affecting our primary products and to the uncertain global economic outlook. These initiatives are focused on maximizing cash flow in a weak commodity environment and on strengthening the company’s financial position. We appreciate the efforts and dedication of our global organization who are supporting our plans to implement revised operating plans. We have a positive long-term view for our markets, the inherent values in our large asset base and are positioning our company for long-term success.

Click here for the full release.