Debt reduction high on priority list of major miners Freeport, Vale – by Henry Lazenby (MiningWeekly.com – May 10, 2016)

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TORONTO (miningweekly.com) – Managing and reducing debt levels can be a balancing act, but it is high on the priority lists of major diversified miners Freeport McMoRan and Vale, the companies confirmed on Tuesday.

Addressing the Bank of America Merrill Lynch’s 2016 Global Metals, Mining and Steel Conference, in Florida, Freeport president and CEO Richard Adkerson advised that the company would aim at getting its debt level down to around $10-billion in the next two to three years, “if the market opens the door for us”.

“We clearly could do this with asset sales. It all boils down to reduce debt, reduce debt, reduce debt. We want to retain value and raise some capital. We’re having a series of discussions about further asset transactions and are open to discussions on all of our assets,” he said, declining to reveal more.

Adkerson mentioned that the company had been selling assets to deal with about $20.8-billion in debt, as at the end of March, and that it had informed the Indonesian government that it was willing to sell 20% of the company’s Indonesian subsidiary.

On Monday the company’s implementation of this strategy was seen in action, when it announced that it would sell its 56% interest in Tenke Fungurume (TF), in the Democratic Republic of Congo (DRC) for $2.65-billion, one of the company’s largest deals in years. This deal also provided for a contingent consideration of up to $120-million, if the price of copper rose above a certain threshold.

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