[Updated to include Freeport's falling stock price]
Center Valley, Pennsylvania 28/12/2015 - Freeport-McMoRan announced that co-founder James Moffett will step down as chairman of the board effective immediately, the company announced on Monday.
Moffett, who has been named chairman emeritus, has agreed to become a consultant to the Freeport board, including providing advisory services in support of the ongoing discussions with the Indonesian Government regarding its Contract of Work (COW) for its Grasberg mine.
Moffett and two associates founded founded McMoRan Oil & Gas Co in 1969. Twelve years later her led the effort to merge with Freeport Minerals Company. He served as its chairman and CEO from 1984 to 1997.
In other company news, the Freeport board has elected Gerald Ford as non-executive chairman. Ford has served as the company's lead independent director since 2013.
Richard Adkerson continues as president and CEO, the release said.
Following the announcement, Freeport's stock price dipped by 7.5 percent to $7.01. It's 52-week low is $6.08.
It has been an excessively challenging year for Freeport, given the sharp drop in both copper and oil prices. Comex copper is currently trading at just $2.08 per pound - only a couple cents above a six year low. Light sweet crude (WTI) oil futures are at an anaemic $37.19 per barrel.
Earlier this month, Freeport announced further revisions to its oil and gas capital spending plans, additional curtailments in copper and molybdenum production and the suspension of its common stock dividend.
On the mining side, Freeport will idle approximately 350 million pounds of copper and 34 million pounds of molybdenum per annum and has cut its 2016 capital spending budget by 25 percent from $2.7 billion to $2.0 billion, including $600 million in sustaining capital.
The company is also also evaluating other financing alternatives, the potential sale of minority interests in certain mining assets and other actions to provide additional proceeds for debt reduction.
Meanwhile, PT Freeport Indonesia (PT-FI) has been seeking promises that the government will approve the extension of operations at its massive Grasberg mine beyond 2021, including the same rights and the same level of legal and fiscal certainty provided under its current contract of work (COW).
However, this will not be a straightforward process given that the mine is now at the centre of a major political scandal. The Indonesian parliament speaker Setya Novanto has been accused of extorting shares worth $1.8 billion from Freeport in exchange for approving the mining permit extension. Novanto has denied any wrongdoing.
On the oil side of the business, the company is planning to run an auction process for its oil and gas assets in early 2016, Reuters reported last week.
Freeport's foray into oil and gas in 2013 via the acquisitions of Plains Exploration and McMoRan Exploration for $19 billion has proven to be a major mistake. Reuters estimated that these assets are now only valued at about $3 billion.