Freeport-McMoRan Presses on with Big Projects

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Researched by Industrial Info Resources (Sugar Land, Texas)--Despite a downturn in copper prices amid global trade tensions, executives with Freeport-McMoRan Incorporated (NYSE:FCX) (Phoenix, Arizona) appeared upbeat on Wednesday regarding major project activity in North America and Indonesia. Capital expenditures are expected to be about $2 billion in 2018. Industrial Info is tracking $3.4 billion in active projects by the copper, gold and molybdenum mining giant.

Click on the image at right for a graph showing Freeport-McMoRan project activity by country.

Copper prices have dropped from $3.20 to about $2.75 per pound since mid-June, Chief Executive Officer Richard Adkerson said during Freeport-McMoRan's second-quarter earnings conference call.

If prices remain down for an extended period, "We have the flexibility to adjust to a lower price environment if we have to," Adkerson said, noting the company has endured long periods of lower prices in the past. "We would defer expenditures, as well as defer capex (capital expenditures) and we would hunker down again, and our company would continue to be cash flow positive," he said, adding the company has yet to look at such steps.

Freeport-McMoRan reported very positive results for the just-ended quarter, with $869 million, compared with $268 million in the same quarter of 2017, on revenues of nearly $5.2 billion, up from $3.7 billion a year earlier.

While much of the talk during Freeport-McMoRan's earnings conference call was focused on its copper mine projects in Indonesia, executives noted that the company's $850 million Lone Star copper mine project in eastern Arizona was moving forward, with the start of pre-stripping activities in the first quarter of 2018. Located seven miles from the company's Safford mine, the project has reserves of 4.4 billion pounds of copper. The oxide material would be transported to the Safford site for processing. Adkerson said the project is expected to achieve its first copper production by the end of 2020. For more information, see Industrial Info's project report.

Freeport-McMoRan also continues to define the scope of a potential sulfide copper mining project at the Lone Star location.

At the company's molybdenum mine operations near Henderson, Colorado, a $30 million expansion/life extension project is underway. For more information, see Industrial Info's project report and April 20, 2018, article - Higher Molybdenum Prices Support Mine Life-Extension Project in Colorado.

Freeport-McMoRan expects to sell 3.8 billion pounds of copper, 2.4 million ounces of gold and 95 million pounds of molybdenum this year.

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