Morenci Mine

Trucks await loads of dirt laced with copper ore at the Morenci open-pit mine. The mine is owned by Freeport-McMoRan.

PHOENIX — Freeport-McMoRan Inc. said it has reached agreement to sell a 13-percent stake in a Southeast Arizona copper mine to a Japanese partner as it strives to pay down debts.

Investors reacted favorably Tuesday, the first trading day after the deal was announced, pushing the company’s stock to $6.37 a share, up 84 cents. Freeport-McMoRan had fallen to near $3.50 a share last month.

The deal, announced Sunday, will raise $1 billion in cash from Sumitomo Metal Mining Co. for their joint venture in the Morenci mine.

“This transaction represents an important initial step toward our objective to accelerate debt reduction and restore our balance sheet, while retaining a portfolio of high-quality assets and resources,” said Richard Adkerson, president and CEO of Freeport-McMoRan, in a statement.

The Phoenix-based company has struggled with bloated debt amid declining oil and energy prices. Freeport-McMoRan owed $18.4-billion in long-term debt at the end of 2015.

Freeport-McMoRan, which had been Arizona’s most profitable company and the one with the highest stock-market value or capitalization, has seen its fortunes decline in recent years. Its stock price has dropped more than 80 percent over roughly the past two years as revenue declined and billion-dollar profits turned into massive losses.

The partnership with Sumitomo Metal Mining at Morenci began 30 years ago, and both companies are confident of the operation’s long-term future, Adkerson added. The mine has long-lived reserves, an attractive cost structure, a top-notch operating team and other advantages, he added.

Freeport-McMoRan currently owns 85 percent of the unincorporated joint venture at Morenci, the largest copper mine in North America, against 12 percent owned by Sumitomo Metal Mining and 3 percent by Sumitomo Corp. Following completion of the transaction, Freeport-McMoRan will own 72 percent against 25 percent for Sumitomo Metal Mining and 3 percent for Sumitomo Corp.

As of year-end, Freeport-McMoRan’s 85-percent share of recoverable reserves totaled 12 billion pounds of copper. Its share of 2015 production approximated 900 million pounds of copper. The company reaped $2.2 billion in revenue from Morenci in 2015.

The transaction is expected to close in the middle of 2016, subject to regulatory approvals. Proceeds will be used to repay bank-loan and revolving-credit debits. Freeport-McMoRan also expects to record a gain of roughly $550 million but will use losses to offset taxes on the transaction.

Sumitomo Metal Mining said it has a long-term goal of producing 300,000 metric tons of copper annually. The acquisition will add another 62,000 metric tons, “putting the goal in sight,” the company said.