Freeport-McMoRan Copper & Gold Inc., the world’s biggest publicly traded copper producer, said opportunities for acquisitions are limited and the company may study returning excess cash to shareholders.
“It’s a very competitive market out there,” Chief Executive Officer Richard Adkerson said today in an interview in London. “That leans you heavily toward internal investments. We are aggressively looking for ways to invest.”
Adkerson, 63, has cut Freeport’s total debt by 72 percent since the completion of the company’s $26 billion acquisition of rival U.S. copper miner Phelps Dodge Corp. in March 2007. Freeport, which had $3 billion in cash at June 30, forecasts spending $1.7 billion on mines and expansions this year. It may boost future spending, Adkerson said.
“We’re likely to earn cash in addition to that required for those investments so that would give us the opportunity for our board to consider returns to shareholders which have been part of the tradition at Freeport,” he said.
Freeport fell $1.66, or 1.7 percent, to $93.72 as of 9:39 a.m. in New York Stock Exchange composite trading. The shares have gained 19 percent this year before today, giving Freeport a market capitalization of $45 billion.
Commodities companies have announced $420 billion of mergers and acquisitions so far this year. BHP Billiton Ltd., the world’s biggest miner, made a $40 billion hostile offer for Potash Corp. of Saskatchewan Inc. in August.
Limited Opportunities
“The opportunities are very limited and we are not planning our business with an expectation that that’s going to happen,” Adkerson said. “I’d love to have one, love to have the opportunity, but we don’t have the expectation.”
Freeport is a likely acquisition target given it’s the biggest publicly traded copper producer, Sanford C. Bernstein & Co. said in an Oct. 7 report, which cited the company as one of 13 possible mining takeover candidates. Still, the cost of a takeover may deter bidders, Sanford C. Bernstein said.
“We haven’t developed a strategy to set ourselves up as a target,” Adkerson said. “We’re really focused on creating shareholder value.”
The company owns the Grasberg mine in Indonesia, which according to its website is the world’s biggest recoverable copper reserve and largest gold reserve. It also owns 57.8 percent of the $1.8 billion Tenke Fungurume copper and cobalt mine in the Democratic Republic of Congo where production started last year.
Freeport and the Congolese government have been in dispute about the terms of the Tenke contract for the past three years, after the Mines Ministry began a review of mining accords. Recent talks with the government have been positive, Adkerson said today.
Freeport has forecast copper sales of 3.8 billion pounds and gold sales of 1.8 million ounces this year. It expects to produce more than 4 billion pounds of copper annually for the next several years, according to its website.
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Adkerson, 63, has cut Freeport’s total debt by 72 percent since the completion of the company’s $26 billion acquisition of rival U.S. copper miner Phelps Dodge Corp. in March 2007. Freeport, which had $3 billion in cash at June 30, forecasts spending $1.7 billion on mines and expansions this year. It may boost future spending, Adkerson said.
“We’re likely to earn cash in addition to that required for those investments so that would give us the opportunity for our board to consider returns to shareholders which have been part of the tradition at Freeport,” he said.
Freeport fell $1.66, or 1.7 percent, to $93.72 as of 9:39 a.m. in New York Stock Exchange composite trading. The shares have gained 19 percent this year before today, giving Freeport a market capitalization of $45 billion.
Commodities companies have announced $420 billion of mergers and acquisitions so far this year. BHP Billiton Ltd., the world’s biggest miner, made a $40 billion hostile offer for Potash Corp. of Saskatchewan Inc. in August.
Limited Opportunities
“The opportunities are very limited and we are not planning our business with an expectation that that’s going to happen,” Adkerson said. “I’d love to have one, love to have the opportunity, but we don’t have the expectation.”
Freeport is a likely acquisition target given it’s the biggest publicly traded copper producer, Sanford C. Bernstein & Co. said in an Oct. 7 report, which cited the company as one of 13 possible mining takeover candidates. Still, the cost of a takeover may deter bidders, Sanford C. Bernstein said.
“We haven’t developed a strategy to set ourselves up as a target,” Adkerson said. “We’re really focused on creating shareholder value.”
The company owns the Grasberg mine in Indonesia, which according to its website is the world’s biggest recoverable copper reserve and largest gold reserve. It also owns 57.8 percent of the $1.8 billion Tenke Fungurume copper and cobalt mine in the Democratic Republic of Congo where production started last year.
Freeport and the Congolese government have been in dispute about the terms of the Tenke contract for the past three years, after the Mines Ministry began a review of mining accords. Recent talks with the government have been positive, Adkerson said today.
Freeport has forecast copper sales of 3.8 billion pounds and gold sales of 1.8 million ounces this year. It expects to produce more than 4 billion pounds of copper annually for the next several years, according to its website.
http://jodnet.blogspot.com
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