Phelps Dodge
From Wikipedia, the free encyclopedia
| Phelps Dodge Corporation | |
 |
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| Type | Public (NYSE: PD) |
|---|---|
| Founded | 1834 |
| Headquarters | Phoenix, Arizona, USA |
| Key people | J. Steven Whisler, Chairman & CEO |
| Industry | Copper Mining |
| Revenue |  $8.287 billion USD (2005) |
| Operating income | $1.764 billion USD (2005) |
| Net income | $1.549 billion USD (2005) |
| Employees | 15,000 (2006) |
| Website | www.phelpsdodge.com |
Phelps Dodge Corporation NYSE: PD was founded in 1834 by Anson Greene Phelps and William E. Dodge. Initially, the company operated an import-export trade business that shipped U.S.-grown cotton to England in exchange for tin, iron, copper and other metals essential for growth and development of the new American nation.
As time went on, the company began its own mining operations as the western United States frontier expanded, and its mineral wealth, especially copper, started being discovered. The company focused largely on providing copper wire and cables to industry that became in high demand as the Industrial Revolution took hold. As the company diversified, it began investing in new railroads, essential in the company’s efforts to establish itself in the west, especially copper-rich Arizona, and to transport products to and from its markets on the eastern/northeastern shores. During the late 19th century, in concert with its metal interests, Phelps Dodge Corporation became one of the largest producers of lumber and lumber products in the United States.
Today, Phelps Dodge Corporation has large copper mining operations in Bagdad, Arizona, Morenci, Arizona, Sierrita, Arizona, Miami, Arizona, and Tyrone, New Mexico, and at the El Chino Mine in New Mexico. Several of these locations are providing ores rich in molybdenum as well. Presently, Phelps Dodge Corporation is initiating all required local and federal processes to open a new mine located near Safford, Arizona, and is expected to employ approximately 350 people.
In South America, the company has several very large copper mining operations going on in Chile and Peru. In Congo, Phelps Dodge Corporation is the majority owner and operator of the Tenke Fungurume project, which is generally considered to be the world's largest undeveloped copper/cobalt project.
The company employs more than 13,500 people worldwide.
[edit] Expansion
On June 26, 2006, Phelps Dodge announced plans to acquire Toronto-based nickel concerns Inco Limited and Falconbridge Limited for US$35.4 billion. Investors reacted angrily to the news with concerns that Phelps Dodge would increase its debt from $1 billion to $22 billion by expanding at the height of a commodities cycle. However, Phelps Dodge management says it is confident the new company, which would create one of the world's largest in the mining sector, will save $960 million a year and not shortchange investors as has been alleged.
On July 28, 2006, Phelps Dodge announced that it would be dropping Falconbridge Ltd. from it merger plans due to the fact that Inco's bid for Falconbridge failed to draw majority response from shareholders. Instead, they opted for Anglo-Swiss based Xstrata's offer for $19.2 billion USD. Despite the fact that Phelps Dodge is still keeping its offer for Inco Ltd. at $20.25 a share and 0.672 shares of Phelps Dodge stock for every Inco share, it might also lose the bid for Inco Ltd. in a price war. Canada-based Teck Cominco has recently launched a hostile takeover bid for Inco Ltd. It has been suggested that other mining giants might also enter the ring such as Anglo American, Rio Tinto Group, Companhia Vale do Rio Doce, and BHP Billiton. If not, and Phelps Dodge's offer is accepted, PD's CEO J. Steven Whisler predicts that the newly formed Phelps Dodge Inco will have high earnings and cash flow potential.
