Freeport sells prized African copper mine

Top publicly-held copper producer Freeport-McMoRan Copper & Gold (NYSE:FCX) on Monday announced the sale of its largest African copper mine to China Molybdenum for up to $2.65 billion.

Like many of its peers Freeport has been struggling to get its debt load under control which ballooned to $20 billion following the ill-timed acquisition of oil and gas assets three years ago. In February the Phoenix-based company sold a 13% stake in its US Morenci mine, the world's fifth largest, for $1 billion to Japan's Sumitomo, but so far has not been able to offload the energy operations despite putting them on the block a year ago.

Richard C. Adkerson, Freeport's President and CEO, said since the start of 2016 the company has announced over $4 billion in asset sale transactions: "We are committed to our immediate objective of reducing debt while retaining a large portfolio of high quality assets and resources and a leading position in the global copper industry.”

Apart from the sale of the high-grade Tenke Fungurume mine in the Democratic Republic of Congo, Freeport is also in talks with CMOC to sell its interests in Freeport Cobalt, including the Kokkola Cobalt Refinery in Finland, for $100 million and the Kisanfu Exploration project in the DRC for $50 million. Freeport reported consolidated Tenke sales for the year 2015 totaling 467 million pounds of copper (215,ooo tonnes) and 35 million pounds of cobalt (16,ooo tonnes) at a net unit cash cost of $1.21 per pound of copper.

It is also the second big acquisition by China Molybdenum within the space of a couple of weeks. China Molybdenum in March picked up Brazilian assets from Anglo American which is also in the midst of a radical restructuring and asset sale program. The Chinese company paid $1.5 billion cash for niobium and phosphates operations inside the South American country.

Shares in Freeport fell sharply on Monday and the company is now worth $13.8 billion on the NYSE, down 24.7% over just five days of trading.