Dec 9 Freeport-McMoRan Inc on Wednesday suspended its annual dividend and made deeper cuts in capital spending and copper production, the latest mining company to act to preserve cash as a commodities’ price downturn enters its fifth year.
Shares in the U.S. diversified miner and oil producer jumped 9.9 percent to $7.41 a share on Wednesday morning, getting help from a stronger copper price, after Freeport said it would suspend its annual dividend of 20 cents per share, a move that will help it save $240 million a year.
Freeport said it will cut its annual copper output by a further 100 million pounds as it shuts down its Sierrita mine in Arizona. Molybdenum output will be reduced by another 14 million pounds. This brings total annual reductions to 350 million pounds of copper and 34 million pounds of molybdenum.
The moves come a day after global mining group Anglo American Plc said it would slash 85,000 jobs and sell 60 percent of its assets while also suspending its dividend as it tries to cope with weak commodity prices.
Freeport’s actions are “a necessary evil in the current environment”, Cowen and Co analyst Anthony Rizzuto said in a note to clients.
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