Freeport-McMoRan undecided about sale of PD molybdenum business
Source: Platts
Though Freeport-McMoRan Copper & Gold holds no "sacred cows" in terms assets once belonging to Phelps Dodge, it needs additional time to consider whether it will sell PD's molybdenum business, company CEO Richard Adkerson said Wednesday.
"We have no sacred cows. We are all committed to that, and we will be looking at the molybdenum business as well as other assets of the company," Adkerson told investors and analysts during a first-quarter conference call.
Adkerson noted that Phelps Dodge had substantially increased the value of the business in terms of both products and profitability since acquiring it from Cyprus Amax Minerals in 1998. "It's a great business; it generates lots of cash in this environment and it really aids the economics of some of the lower-grade copper mines going forward," he said.
Freeport-McMoRan management will continue to review potential asset sales, including the molybdenum business, he said. But a major difference between molybdenum and copper is that molybdenum has excess global capacity that could be brought online.
Freeport-McMoRan, by virtue of its Phelps Dodge acquisition, now owns the Climax Molybdenum mine near Leadville, Colorado. Phelps Dodge was conducting a feasibility study on whether to reopen the mine after several years of closure. "It is the most attractive incremental source of new moly in the world today, but there are also other molybdenum sources in China and elsewhere," he said.
Freeport-McMoRan feels it doesn't have to do anything in terms of asset sales, Adkerson said. "We have got this company at a stage where we don't have to sell assets to manage our debt situation any longer."
Other potential sales include the former Phelps Dodge wire and cable business and Freeport-McMoRan's gold stream. "We're going to look at all of those, but it will be from the standpoint of pursuing transactions that will incremental value to the company," Adkerson said. |
