Citic Metal in talks to buy minority stake in Freeport-McMoRan's assets
28 May 2016
Citic Metal, China's largest diversified metals trading company, is in talks with Freeport-McMoRan Inc to buy a minority stake in the US-based natural resources company's North and South American operations, Bloomberg reported, citing people familiar with the matter.
Freeport-McMoRan is also in talks with at least one other investor group for the asset sale and other parties might be interested, the report said.
Freeport-McMoRan North American assets include seven open-pit copper mines, Morenci, Bagdad, Sierrita, Safford and Miami in Arizona, and Chino and Tyrone in New Mexico, and two molybdenum mines - Henderson and Climax in Colorado.
Its South American assets include two copper mines in South America - Cerro Verde in Peru and El Abra in Chile.
The sale, which comprises around 20 per cent of the company's assets, could be worth about $2 billion, the report added.
Arizona-based Freeport-McMoRan is trying to reduce debt and restore its balance sheet through sale of stake in some of its assets.
In February, it sold a 13-per cent stake in its Morenci open-pit copper mine located in South Arizona to Japan's Sumitomo Metal Mining Co for $1 billion, and earlier this month, agreed to sell its majority stake in the Tenke copper project in the Democratic Republic of Congo to China Molybdenum Co for $2.65 billion.
Freeport had acquired McMoRan Exploration Co in 2013 for $9 billion and Plains Exploration & Production Co, both purchases that loaded it with debt and compounded the problem when energy prices declined just after the ill-timed acquisitions.
In April, it said that it would cut 25 per cent of the oil-and-gas workforce, or 325 jobs, as part of an overall restructuring in that business.