Investors likely know Freeport McMoRan Copper & Gold (FCX 0.52%) as just a heavyweight in the copper and gold mining industry. Going forward, all that's about to change. Not only will Freeport remain a mining giant, but it's poised to make huge inroads in the energy sector as well. That's because Freeport is undergoing a major strategic shift. Management has targeted energy as a booming opportunity and has made several high-profile acquisitions to significantly boost its presence in the oil and gas industries.

Freeport is about to become a very diversified company with a strong presence across the mining and energy markets. That's why management is optimistic about the future, and why Foolish investors should be optimistic as well.

Cyclical mining downturn prompts diversity
The mining industry is in a very difficult position right now. The industry faces several headwinds, the most concerning of which being the sharp decline in precious metals prices over the past year. Copper and gold prices are significantly lower, which has brought down profits for all companies involved in mining activities. Signs abound that things are bad.

This pricing pressure helped contribute to Freeport-McMoRan's diluted earnings falling 17% last year. In addition, copper miner Southern Copper (SCCO -0.37%) saw its sales and earnings per share fall by 10% and 15%, respectively, despite keeping production relatively unchanged in 2013.

The carnage sweeping through the mining industry has affected heavy equipment makers as well. For example, Joy Global (JOY), which provides heavy machinery suited for the mining industry, is really struggling right now. Joy Global's sales and operating profit fell 11.5% and 30%, respectively, last year. Things didn't get much better in Joy Global's fiscal first quarter. Net sales fell 27% and earnings per share collapsed by 65%.

How long the downturn in precious metals prices lasts is anyone's guess, but Freeport-McMoRan isn't sitting on its laurels waiting for a turnaround. It's determined to grow and has targeted energy as its next frontier.

Freeport McMoRan: An energy powerhouse in the making
While Freeport-McMoRan muddles through the tough environment for copper and gold mining, it's going ahead with its plans to enter the energy space for a diversified business model. The company will soon be diversified away from being a mining pure-play. Freeport made two separate acquisitions last year, buying Plains Exploration & Production Company and McMoRan Exploration Co. for a total of $19 billion. These acquisitions have added a high-quality portfolio of oil and gas assets to its operations.

The two acquisitions allow Freeport-McMoRan entry into both onshore and deep-water oil and gas production. This sets Freeport up perfectly to profit from the energy boom taking place right now in the United States. Going forward, Freeport now has access to some of the most promising fields in the country. These include the Haynesville and Eagle Ford shale plays, where future production should be strong. Such promising production has prompted Freeport management to expect its oil and gas production to double over the next five years.

Once Freeport-McMoRan builds out its energy business, its oil and gas operations will make up a significant amount of the company's profits. In all, management expects 25% of its 2014 earnings before interest, taxes, depreciation, and amortization (EBITDA) to come from its oil and gas businesses.

The bottom line is that while it's easy to become pessimistic of the major gold and copper miners like Freeport-McMoRan, in light of the carnage sweeping through the mining industry, there's reason to be optimistic too. Freeport is overhauling its business to become much more than just a gold and copper miner. It's quickly and quietly becoming an energy giant as well, thanks to an aggressive acquisition strategy.

Freeport-McMoRan now has access to some of the most highly productive onshore developments in the United States, as well as a foothold in deep-water drilling as well. Freeport's savvy strategic moves place the company in prime position to capitalize on the domestic energy boom.