Freeport-McMoRan Looks to Sell Stakes in Mining Operations
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Freeport-McMoRan Inc. is trying to sell stakes in packages of mining and energy assets as the biggest publicly traded copper miner steps up efforts to reduce debt, three people with knowledge of the matter said.
The Phoenix-based company has held talks with potential buyers of a minority interest in a grouping of mining assets in Africa and the Americas, two of the people said, asking not to be identified because talks are private and at an early stage. Those mines were acquired when Freeport bought Phelps Dodge Corp. in 2007.
Oil and gas assets purchased through a $9 billion debt-fueled deal three years ago have also been included in other packages being floated by the company, the people said. Freeport also is looking at selling 10 percent to 20 percent of its North and South American operations, which includes the Morenci mine in Arizona, as well as Cerro Verde in Peru, one of the people said. In February, Freeport sold a $1 billion stake in Morenci to Sumitomo Metal Mining Co.
The value of the assets being offered is about $2 billion to $3 billion, the people said.
Morenci is one of five Freeport mining assets considered core to operations, as is Cerro Verde. The others are Tenke Fungurume in the Democratic Republic of Congo, El Abra in Chile, and Grasberg in Indonesia.
In response to questions on its asset-sale plans, Freeport said it has “nothing to discuss at this time in advance of our earnings call on Tuesday.”
By selling minority stakes in packages of assets, Freeport would be able to share costs and raise cash to pay down debt while still retaining control of prized low-cost copper mines. In January, Chief Executive Officer Richard Adkerson made it clear that any operation, in full or in part, could be sold as the company continues to struggle under a $20 billion debt load after commodity prices collapsed.
Freeport spent more than a year looking at options for its stand-alone oil and gas business before opting to fold it back into the company and downsize management to save costs.
Source: (April 22, 2016) Bloomberg
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