UPDATE 3-Freeport further cuts mining output on low prices, posts loss

Thu Oct 22, 2015 1:44pm EDT
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(Adds executive comments on spending and strategy, Indonesian mine expansion and contract royalty rates, timing of news on oil and gas unit future)

By Susan Taylor

TORONTO Oct 22 (Reuters) - U.S. miner and oil producer Freeport-McMoRan, under pressure from activist investor Carl Icahn and falling prices, said on Thursday it will further cut copper and molybdenum output as it posted a bigger-than-expected quarterly loss.

The Phoenix-based company said it remains confident in the longer-term outlook for copper, but will halve operating rates at its Sierrita mine in Arizona as prices continue to drop.

"We're prepared to do whatever it takes - whatever it takes - to keep our operations generating positive cash flows to protect our liquidity and hold onto these assets for a better day," Chief Executive Richard Adkerson said on a call.

Sierrita's annual output will drop by 100 million pounds of copper and 10 million pounds of molybdenum, with full shutdown being considered. Combined with previous cuts, annual copper production is down 250 million pounds and molybdenum output down 20 million pounds.

The biggest U.S.-listed copper miner, Freeport said a primary strategic objective is "significant" reduction of its $20.7 billion debt.

Repeating that 2015 is a "bridge year", Freeport anticipates improved cash flow in 2016 and 2017 as it winds down project spending and increases production.

"I want to be clear: after we complete these current projects, until the market warrants further investments, we're not going to be making them," said Adkerson.   Continued...