PHOENIX (Yosefardi) – Freeport-McMoRan Inc. opted to cut its capital expenditure (capex) and review its mining operation in response to current oil and gas market conditions.
Capex for 2016 and 2017 is revised down to $2 billion each from initial plan of $2.9 billion. While capex for this year is maintained at $2.8 billion.
Freeport-McMoRan Oil and Gas (FM O&G) is deferring investments in several long-term projects. In addition, FM O&G has revised its estimate of the start-up of initial production from its recent drilling success in the Horn Mountain area to 2016 from the previously estimated start-up in 2017.
This revised operating plan will allow FM O&G to continue to grow production and enhance cash flow in a weak oil and gas price environment.
FCX is also completing a review of operating plans at each of its global copper and molybdenum operations and will revise operating and capital plans to strengthen its financial position in a weak copper price environment.
The revised plans will target lower operating and capital costs to achieve maximum cash flow under the current market conditions. Production at certain operations challenged by low commodity prices will be curtailed. The company expects to complete this review promptly and will report its revised plans during the third quarter of 2015.
Freeport’s portfolio of assets includes the Grasberg minerals district in Indonesia, one of the world’s largest copper and gold deposits.