Copper and gold producer Freeport-McMoRan (FCX) has announced a $700m reduction in its estimated mining capital expenditures for 2016, citing weak copper prices.
The US-based company’s latest actions are part of a review of operating plans for its mining business.
As part of its global mining business strategy since 2013, the company has been focusing on the completion of three organic growth projects in the US, South America and Africa, in addition to its development plans in Indonesia.
After completing expansions, FCX’s Tenke Fungurume mine in Africa and its Morenci mine in the US provided significant cashflows at a time when the copper prices were low.
FCX said it has reduced its consolidated capital expenditure budget from $7.5bn to $6.3bn since late 2014.
As part of its revised plans, the company considers a reduction in copper production by about 150 million pounds a year in 2016 and 2017, in order to achieve lower operating costs and improved efficiencies.
In its North American mines, FCX plans to reduce mining rates to in a bid to minimise operating and capital costs.
The plans also include the suspension of mining operations at its Miami mine, a 50% reduction in mining rates at the Tyrone mine, as well as making adjustments to mining rates at other mines in the US.
FCX’s revised operating plan for its copper mine El Abra in Chile will see the reduction of mining and stacking rates by 50% to achieve lower operating and labour costs.
Revised plans at Africa’s Tenke Fungurume involve a 50% reduction in capital spending for 2016.
FCX will improve operational efficiencies and reduce input costs, supplies and contractor costs at its PT Freeport Indonesia (PT-FI) mine for 2016.
The company, which is continuing to review its molybdenum production plans at its by-product mines, proposes to operate its Henderson primary molybdenum mine at a lower rate.