Freeport to Cut Jobs, Production

It is the latest round of job cuts for the mining industry that are now wrestling with plummeting commodity prices amid a recession.

"I think you're going to see a lot more miners take this approach," said Argus Research analyst Bill Selesky. "They basically don't know, at this point, where commodity prices are heading."

Copper prices have fallen from about $3.61 per ton at the end of September to an average of $1.69 last month. The price hit $1.63 a ton on Monday.

Prices for molybdenum, which is used to strengthen steel, have fallen from an average of about $33 per pound during the nine months ended in September to $9 per pound on Monday, the company said.

Molybdenum production in 2009 was cut to 70 million pounds from 80 million pounds and 2010 production was cut to 70 million pounds from 100 million pounds.

Besides cutting operating and administrative costs, the company also is suspending its $2 common stock dividend, which has totaled about $755 million per year.

Selesky said he expects most mining companies to cut jobs, in a rough range of about 10% industrywide.

"I think you could lump all miners regardless of what type of mineral they produce and say yes, they're all going to feel it, maybe not so much the gold miners because that seems to be the only commodity price that's held up very well under the circumstances," he said.

The layoffs announced Wednesday will occur at Freeport McMoRan's Chino mine near Hurley, N.M., where operations will be suspended. A company spokesman said 600 of the 830 jobs will be cut.