Mining giant Freeport McMoRan (NYSE:FCX) has responded to lowered expectations of growth in the Chinese economy by cutting back further on its spending plans.
The company has announced a cut of 25%, or US$700mln, in its projected mining capital expenditures for 2016.
Projected consolidated 2016 capital expenditures for mining and oil & gas have been reduced by 29% to US$4.0bn.
In bad news for the copper sector, Freeport indicated a 150mln pounds reduction in copper sales per year in 2016 and 2017.
The cutbacks follow a previously announced review of operating plans for the mining business.
"The steps we are taking to reduce costs and capital expenditures will strengthen our financial position during a period of weak and uncertain market conditions and preserve our large resource base for improved future market conditions," the Freeport senior management team said.
"Our high quality portfolio of long-lived assets, flexible operating structure and experienced management team provide a solid base to address the current market conditions while maintaining an attractive portfolio of assets positioned for long-term success,” the company added.
Yesterday, Swiss bank UBS cut its price target for Freeport McMoRan to US$19 from US$21, reflecting the collapse of the share price from US$11.75 at the end of July to US$7.92 on Wednesday night.