Thursday Freeport-McMoRan, Inc. announced further spending cuts at its Arizona and New Mexico copper operations. This reduction is in response to the continued decline in commodity prices and current weakness of global economic markets.
The LME price of copper, which averaged $3.11 per pound during 2014, fell to an average of $2.69 per pound during the six month period ending, June 30, 2015. During the third quarter of 2015, the copper price has continued to fall to approximately $2.25 per pound, a six year low.
According to Freeport-McMoRan’s August 27, 2015 press release: “Freeport McMoRan’s revised plans in North America corporate reductions in mining rates to reduce operating and capital costs, including the suspension of mining operations at its Miami mine (which produced 57 million pounds in 2014), a 50% reduction in mining rates at the Tyrone mine (which produced 94 million pounds in 2014) and adjustments to mining rates at other U.S. mines. The revised plans at each of the operations incorporate the impacts of lower energy, acid and other consumables, reduced labor costs and a significant reduction in capital spending plans.
These plans will continue to be reviewed and additional adjustments may be made as market conditions warrant.
These changes are expected to result in an approximate 10 percent reduction in employees and contractors at U.S. mining operations.”
This report coincides with yesterday’s report that ASARCO announced plans to lay off a total of 170 workers by by early November this fall. The reduction is a result of the planned shut down the concentrator operation at the Ray Mine operation.