Shares of Freeport-McMoRan Copper & Gold Inc. dropped 6 percent Tuesday after the global mining company reported its second-quarter income slid 14 percent because of lower sales volume and one-time costs.
The stock fell $6.48 to close at $100.53. The stock has ranged from $67.07 to $127.24 over the past year.
Chief Executive Officer Richard Adkerson told analysts the company can develop its reserve base significantly by focusing exploration at its existing mines rather than searching for new reserves.
When Freeport-McMoRan acquired Phelps Dodge Corp. in March 2007, that company's reserves were 64 billion pounds of copper equivalence, which is copper that may include molybdenum and cobalt adjusted for relative value.
Adkerson believes Freeport-McMoRan can add 80 billion pounds of copper equivalence to the total through exploration at those mines and Freeport's other existing operations.
Phoenix-based Freeport-McMoRan is boosting its 2008 exploration budget from $180 million to $240 million, and plans to have 80 drill rigs in operation around the world by year end, up from 35 in March 2007.
Fewer big mines are being established today because of a number of obstacles. Adkerson said those challenges include cost, environmental concerns, technology and the public's acceptance.
"We believe that these construction costs and higher production costs are going to be another barrier to the delays that the major greenfield projects are facing in this industry," Adkerson said.
___
On the Net: http://www.fcx.com
Terms & Conditions
RSS Headlines
Fool UK