Freeport acquisitions unlikely, says CEO
Claudia Carpenter, Bloomberg/New York
Freeport-McMoRan Copper & Gold Inc., which had a record fourth- quarter profit, is "unlikely" to spend on acquisitions, Chief Executive Richard Adkerson said.
"If we were to look to buy another company, or other assets in the business, we would have to pay a premium, and invariably, those assets would be of lesser quality," Adkerson said on Wednesday in a broadcast on the Internet from a conference in New York.
BHP Billiton, the world's biggest mining company, on Tuesday yesterday offered to buy Australian nickel miner WMC Resources Ltd. for US$7.3 billion, and Noranda Inc., Canada's biggest mining company, agreed today to buy the rest of Falconbridge Ltd. for $2.49 billion.
Freeport, based in New Orleans, owns the Grasberg mine in Indonesia, the world's biggest gold mine and second-biggest copper source after Chile's Escondida, which is owned by BHP Billiton. Freeport's net income in the fourth quarter soared to $227.6 million from $2.4 million a year earlier as metals prices surged and production more than doubled.
A slowdown in economic growth in China, the world's biggest copper buyer, and the prospect of higher costs at Grasberg are the biggest risks faced by Freeport, Adkerson, 58, said.
Grasberg is "a very large operation in an area that requires a lot of investment and management time," he said. "We move 700,000 tons of material a day at the mine. We have 200,000 to 250,000 tons of ore going through the mill."
Shares of Freeport fell 61 cents to $42.40 in New York Stock Exchange composite trading. They have gained 0.3 percent in the past year.