Phoenix-based Freeport-McMoRan Copper & Gold Inc. is cutting spending by $1.9 billion this year and next and started a process to sell some U.S. energy assets as the world's biggest publicly traded copper miner seeks to reduce its debt.
Freeport, one of Southern Arizona's biggest employers, plans to cut total borrowings to $12 billion in the next three years, the company said Tuesday, as it reported a dip in second-quarter profit.
"We are taking measures to execute prudent capital management in an uncertain global economic environment," the company said in a statement.
Freeport's debt jumped to $21.2 billion as of June 30 from $3.52 billion a year earlier, after it acquired Plains Exploration & Production Co. and McMoRan Exploration Co. for $9 billion to add oil and natural gas assets.
The company, which operates mines in the Ameri- cas, Africa and Asia, is facing lower prices for copper and gold. Freeport reduced its metals sales forecast for 2013 after an accident killed 28 people at its Grasberg mine in Indonesia in May.
Freeport shares closed Tuesday at $29.99, up 84 cents or nearly 3 percent, in trading on the New York Stock Exchange. The company reported earnings before the markets opened.
"Shares will react favorably to this development as management appears to be cognizant of shareholders' views," Anthony Rizzuto, an analyst at Cowen & Co. in New York, said in a note.
Meanwhile, Freeport reported that second-quarter net income fell to $482 million, or 49 cents a share, from $710 million, or 74 cents a year earlier. However, the results beat analysts' average estimate of 41 cents per share in earnings.
Sales fell 4.2 percent to $4.29 billion, missing the $4.46 billion average of 13 estimates. The average production cost per pound of copper was $1.85, more than the $1.69 average estimate, while copper futures prices continued to slip.
Freeport halted work for more than a month at the Grasberg copper and gold mine after the deadly tunnel collapse on May 14. Shipments from the mine, Freeport's largest, resumed this month after the Indonesian government allowed operations to restart.
The disruption cost the company about 125 million pounds of copper and 125,000 ounces of gold in the quarter, Freeport said, prompting the company to cut its annual output forecast.
Freeport is the Southern Arizona's 10th-largest employer with more than 5,400 employees, according to the Star 200 survey of the region's major employers. Its mines include the Sierrita Mine near Green Valley, and mines at Morenci, Miami and Safford.