Freeport axes dividend by 84% amid weak commodity prices

Freeport’s Grasberg copper mine in Indonesia.

Shares in Freeport-McMoRan (NYSE:FCX), the U.S. largest miner by market value and revenue, were down Tuesday morning after the U.S. copper miner announced it had slashed its quarterly dividend by 84%, citing lower commodity prices.

The Phoenix-based company was trading 1.71% lower to $18.67 at 10:30 am ET as it said it was cutting its dividend to 5 cents a share from 31.25 cents a share. Freeport added it’s evaluating funding opportunities for its oil and natural gas projects and would consider measures including additional spending cuts and asset sales “as required.”

“The reduction in the dividend is a prudent measure to strengthen our balance sheet during a period of volatile market conditions,” Freeport said in the statement.

Earlier this year Freeport warned it would reduce planned spending for 2015 by about 20% and that it might cut its payout, depending on the direction of copper and oil prices, which dropped sharply in the latter part of 2014.

The company has been trying to cut debt that jumped almost sixfold in 2013 to $19 billion by the end of last year, triggered mainly by the acquisition of two oil and natural gas producers to diversify beyond metals mining.