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Freeport McMoran

FCX is the 2nd largest copper producer behind Codelco. FCX has organized its continuing mining operations into four primary divisions – North America, South America, Indonesia and Molybdenum mines. Morenci, Cerro Verde, Grasberg, Rod & Refining, and Atlantic Copper Smelting are also considered reporting segments. Indonesia mining (Grasberg) accounted for 27% of FY17 revenue but 56% of FY17 EBIT. The saga with the Indonesian government surrounding investment, divestiture, and smelter construction highlight the risk of large scale mine developments in emerging markets as well as FCX's reliance on one of the most profitable copper mines in the world. In 2Q13, FCX acquired Plains Exploration & Production for $17 bn and McMoRan Exploration for $2.4 bn. In 2016, FCX largely exited the Oil & Gas business after it sold its onshore California assets to Sentinel Peak Resources and the Deepwater GOM assets to Anadarko. The $23 bn Phelps Dodge acquisition in 2007 improved FCX's geographical diversification. The deal added operations in Arizona, Nevada, Chile, and Peru. (20 Nov 2018)

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Transcript: 2018 IG & Crossover Conf-Basics Panel

Transcript: 11 Dec 2018, 5:51 AM ET - We present a transcript of the Basic Industries Panel discussion given at the CreditSights Investment Grade & Crossover conference on December 4, 2018.
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FCX 3Q18: Solid Results, Grasberg Update

Earnings Note: 24 Oct 2018, 8:33 PM ET - We take a look at FCX's 3Q18 earning results and provide an update on the Grasberg sale. 

US Strategy: What to Watch for on 3Q Earning Calls

Strategy Analysis: 11 Oct 2018, 4:37 AM ET - We surveyed our analyst teams for key sector level issues they will be paying close attention to with upcoming third quarter earnings calls beyond the typical sales, margins and earnings guidance. 

Arconic: LBO Rumors Continue

Worth Watching: 09 Oct 2018, 3:37 PM ET - Arconic (Ba2/BBB-/BB+): LBO rumors continue to swirl. According to Reuters, Blackstone, Carlyle, Onex, and Canada Pension have made a joint bid to acquire ARNC. The report also noted that the PE consortium is competing with Apollo in the bidding p ..
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FCX: Landmark Grasberg Deal Signing

Worth Watching: 30 Sep 2018, 10:35 PM ET - FCX (Ba2/BB) and Rio Tinto signed a binding agreement to sell their stakes in the Grasberg mine to PT Indonesia Asahan Aluminum (Inalum). The terms are roughly in-line with what was reported in July when the parties signed a nonbinding agreement ( ..
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FCX: S&P Upgrades to BB

Worth Watching: 18 Sep 2018, 6:20 PM ET - FCX (Ba2/BB): S&P upgraded FCX's long-term corporate credit and issue-level ratings by one-notch to BB from BB- with a stable outlook. The ratings upgrade comes on the heels of FCX's recent agreement to sell down its stake in the Grasberg, Indones ..
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FCX 2Q18: Strong Results

Earnings Note: 26 Jul 2018, 2:40 PM ET - We take a look at FCX's 2Q18 earning results and take a look at its capital allocation initiatives.
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FCX: Relatively Unscathed in Grasberg Deal

Worth Watching: 12 Jul 2018, 9:53 PM ET - FCX (Ba2/BB-), along with PT-FI JV partner Rio Tinto, entered into a nonbinding agreement to sell stakes of the Grasberg copper mine to the Indonesian government. The transaction is expected to close in 2H18. For some background color, Grasberg is ..
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FCX: 1 Month IUPK Permit Extension

Worth Watching: 09 Jul 2018, 12:28 PM ET - FCX (Ba2/BB-) has been granted a 1 month extension of the company's temporary special mining business license or IUPK that will expire on July 31st. The prior IUPK extension at the beginning of the year was for 6 months. We note that both FCX and ..

Coal Producers: Exposure to Potential Retirements

Sector Analysis: 28 Jun 2018, 5:16 AM ET - As part of our continued coverage of coal producer exposure to plant retirements, we have analyzed coal plant data to determine which basins and coal producers have the greatest exposure to unplanned, but at risk, coal plant retirements.  
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FCX: Seeks IUPK Permit Extension

Worth Watching: 27 Jun 2018, 9:18 PM ET - FCX: The company's temporary special mining business license or IUPK will expire on July 4th, and FCX is seeking a 6-month extension. The extension is crucial to continuing to export copper concentrate. On a more positive note, there appears to be ..
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RIOLN: Potential Grasberg Sale Positive for FCX

Worth Watching: 22 May 2018, 6:55 PM ET - RIOLN: According to Bloomberg, Rio Tinto is ready to accept a $3.5 bn deal with the Indonesia government for its 40% interest in the Grasberg copper mine. This $3.5 bn figure implies that the total valuation for the Grasberg mine is greater than $ ..
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FCX 1Q18: Grasberg Rears Its Ugly Head Again

Earnings Note: 24 Apr 2018, 3:14 PM ET - The latest news surrounding the new stricter Indonesian environmental standards imposed on the Grasberg mine tailings sent the FCX share price tumbling down over 15% and the bonds down 1-2 points. 
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FCX: Paying Down $1.9 bn of Debt

Worth Watching: 05 Mar 2018, 9:47 PM ET - FCX (Ba2/BB-) plans to pay down $1.9 bn of debt in the near-term. The company will pay down $1.48 bn of the 2.375% notes when it matures on March 15th. In addition, FCX announced that it will redeem $454 mn of bonds on April 4th: $404 mn of the 6. ..

US Strategy: Tariffs as Repricing Event?

Strategy Analysis: 01 Mar 2018, 9:40 PM ET - The market has been building in very low odds of a trade war event, a NAFTA withdrawal, or a significant escalation of tit-for-tat trade retaliations on a broader scale.  The odds-makers just got a fresh load of input.

Tronox: EU Pauses Review of Cristal Merger

HY Note: 28 Feb 2018, 4:52 AM ET - The EU Commission paused its review of the Tronox/Cristal merger until it receives additional information from the two companies.  Although some may be alarmed, it is a fairly regular component of the EU Phase 2 process.

Section 232: The NAFTA Conundrum

Sector Analysis: 26 Feb 2018, 3:42 AM ET - Using Section 232 on Steel/Aluminum could damage supplier chains and cost structures and drive broader inflation.  A tariff gambit in such key industries could undermine the NAFTA negotiations and have immediate effects on risk pricing. 
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FCX: Grasberg Export Extension Granted

Worth Watching: 20 Feb 2018, 8:49 PM ET - FCX (Ba2/BB-) was granted a one-year extension by the Indonesian Energy and Mineral Resources Ministry to continue to export up to 1.2 mt mt of copper concentrate. On FCX's side of the Grasberg front, negotiations are ongoing with few new specific ..

Metals: U.S. Protectionism Comes to a Head

Sector Analysis: 19 Feb 2018, 11:06 PM ET - Our thoughts on the Commerce Department's proposed Section 232 tariffs/quotas on steel and aluminum imports and the implications on various industries. 
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FCX: Reinstates Dividend, More to Come?

Worth Watching: 06 Feb 2018, 8:27 PM ET - FCX (Ba2/BB-) reinstated its cash dividend and hinted that it may further increase shareholder rewards if market conditions continue to improve. The company suspended the dividend in 2015-16 downturn following its disastrous debt-funded oil & gas ..

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