Shares of Freeport-McMoRan (NYSE:FCX) tumbled more than 10% by 11:30 a.m. EDT on Friday. Several factors weighed on the copper and gold mining company, including a sell-off in the market and issues with its mine in Peru.
The stock market is giving back some of its recent gains today. The S&P 500 index was down about 3% in mid-morning trading, as most stocks are in the red. Commodity prices are also falling today, with gold down about 1.5% and copper giving back some of its recent gains.
Meanwhile, Freeport-McMoRan is reportedly in talks with the government of Peru to start limited operations at its Cerro Verde mine, according to Reuters. The company previously placed the mine in care and maintenance mode following Peru's declaration of a 15-day national emergency on March 16 because of the COVID-19 outbreak. The country recently extended that until April 12. The mine is an important one for Freeport because it produced 1 billion pounds of copper and another 29 million pounds of molybdenum last year. As such, every day it's not operating, it costs the company money.
Freeport has already taken action to cut costs due to the COVID-19 outbreak's impact on the global economy. Earlier this month, it suspended its dividend and said it would target "aggressive" reductions in capital spending and other expenses. It also said that it might voluntarily reduce its copper and molybdenum production in North and South America due to the expectations of weaker demand for those products.
Freeport-McMoRan complied with Peru's initial 15-day work stoppage at its Cerro Verde mine. However, the company wants to start some work at that location so it doesn't keep losing money, especially if the national emergency gets extended again. That uncertainty, as well as the continued spread of the COVID-19 outbreak, is weighing on its stock. It will likely continue doing so until there's more clarity as to when conditions will improve.