Freeport CEO says company is not for sale
Freeport-McMoRan, one of the world’s biggest copper producers, is not up for sale, according to its chief executive.
“We have no plans to sell the company,” Richard Adkerson told analysts following the publication of third-quarter results on Wednesday. “We’re focused on our internal business.”
Big miners and Chinese companies are looking to increase their exposure to copper, which is expected to benefit from the growth of renewable energy and electric vehicles.
With Freeport close to concluding an important agreement in Indonesia, the company has been tipped as a possible takeover target. However, ructions caused by the US-China trade war may mean that big deals are off the agenda, at least in the near term.
“I personally do not believe that in today’s world’s uncertainties there are opportunities for big mergers and transactions in the industry. I certainly don’t consider it to be something that we would look at in the near term given our share price,” Mr Adkerson said.
Shares in Freeport have fallen 45 per cent this year and were trading close to a 12-month low on Wednesday at $10.94.
On the call, Mr Adkerson claimed the deal to sell a majority stake in its Indonesia subsidiary to a local company would create a better operating “environment” for Grasberg, it flagship copper and gold mine.
After years of wrangling, Freeport and its joint venture partner Rio Tinto reached a deal with Jakarta last month to cede control of PT Freeport Indonesia (PTFI) to Inalum, a state-owned company. This is part of wider government-led push to gain greater control of Indonesia’s natural resources.
To fund the deal, Inalum is looking to raise debt, something Mr Adkerson said would ensure the two sides will be working on the same page.
“They will want to see the operations run with stability because they’ll need cash flows to fund this significant debt they’re taking on,” he said.
“And so they’ll want to see the operations run smoothly, to generate cash flows, to service our debt and generate dividends. So I believe firmly that, that this will create a better overall environment for operations than what we’ve experienced in recent years,” he said.