PHOENIX (AP) — Copper producer Freeport-McMoRan Inc. is lowering its spending and production as it deals with declining copper prices and soft economic conditions worldwide. It plans to cut about 10 percent of employees and contractors at U.S. mining operations.
Shares gained more than 6 percent before Thursday’s market open.
Freeport-McMoRan said that third-quarter copper prices are currently about $2.25 per pound, approaching a six-year low.
Signs are also mounting that growth in China, the second-largest economy in the world, is slowing down. That’s making investors anxious about the health of the world economy. Those fears led to a sell-off in stocks Friday and again on Monday, when China’s main stock market took its biggest dive in eight years. China and world markets have since rebounded.
Freeport-McMoRan said that it expects $4 billion in capital expenditures for 2016, down from a prior estimate of $5.6 billion. Its 2015 capital expenditure budget currently stands at $6.3 billion.
The Phoenix-based company said that it will reduce copper sales by about 150 million pounds per year in 2016 and 2017 and cut 2016 unit site production by 20 percent. It also plans to slash 2016 minerals exploration costs from $100 million to $50 million.
Freeport-McMoRan’s stock climbed $1.24, or 15.4 percent, to $9.16 in morning trading. Its shares are down 75 percent over the past year.
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