Freeport-McMoRan Inc. on Monday said it reached a deal to sell part of its stake in an Arizona copper mine to one of the mine’s other owners, in an effort to pay down debt.
Phoenix-based Freeport, one of the world’s biggest copper miners, said it would sell a 13% ownership interest in its Morenci mine, located in the desert on the Arizona-New Mexico border, to Sumitomo Metal Mining Co. for $1 billion. The company said it would record a gain of $550 million on the deal, the difference between the sale price and the stake’s book value of $450 million.
Freeport Chief Executive Richard Adkerson said the transaction was part of the company’s plan to reduce what it owes to creditors “while retaining a portfolio of high-quality assets and resources.” Mr. Adkerson pledged last month to cut the company’s $20 billion debt by as much as $10 billion.
Freeport, the U.S.’s biggest mining company by market capitalization, has been under pressure from falling commodity prices and activist investor Carl Icahn, who has a stake of roughly 8.7%, according to recent disclosures. He has been lobbying for cutting costs and reducing debt.
Since Mr. Icahn disclosed his initial investment last August, Freeport has suspended its dividend, cut capital spending, and announced the resignation of longtime chairman James R. Moffett, a colorful oil wildcatter largely responsible for building its global copper empire.
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