The stock price of Freeport-McMoran Copper & Gold tumbled this past year along with demand for copper, but the company is cutting costs to weather the storm and looking to developing countries to lead its recovery, its CEO says.
"By the end of September we realized we had to turn completely around and start cutting high-cost production, deferring capital expenditure and adjusting our business so that we could live within our cash flows," said Richard Adkerson, president and CEO of Freeport McMoRan.
The company, whose shares are down 30 percent from last year, is focusing on maintaining liquidity and preparing for the future when construction spending and demand for copper rises.
"Six months ago we were at all-time highs," said Adkerson. "…We felt it when consumption went off the cliff and we’ll feel it when it comes back."
Key to Recovery
Adkerson said developing countries will be one of the keys to Freeport’s recovery. He has his eye on China, which has a stimulus package that is heavily weighted on construction.
"They have the financial resources to do things, and that’s what the government and the people want to see happen,” he said. "They can do things that are positive for our business - for the commodity business--at a time when the rest of the world is facing such low consumption.”