By Steve James
NEW YORK (Reuters) - Copper prices should stay high despite a slowing U.S. economy, as China keeps buying the metal and big miners gobble up smaller, capital-hungry rivals, the head of Freeport-McMoRan Copper & Gold Inc (FCX.N: Quote, Profile, Research, Stock Buzz) said on Monday.
"We're actively looking for exploration projects around the world because we have such a positive outlook for copper," Chief Executive Officer Richard Adkerson told the Reuters Global Mining Summit in New York.
"The industry will continue to consolidate; it's just inevitable because of the lack of investment opportunities," he said, when asked about the credit crunch that is making it difficult for companies to raise capital.
Although he stressed Freeport was looking mostly to grow organically, as a result of the mines it acquired in last year's $26 billion acquisition of rival Phelps Dodge, he did not rule out further merger activity.
"There is unquestionably, a challenge today in raising capital for virtually any business," he said. "We see it as an issue that might lead to opportunities for companies like us.
"If this credit market was in place last year, we couldn't have done it (the Phelps Dodge deal)," he said, noting that Freeport took on $17 billion debt to do the transaction.
Asked about the prospects for the copper market, which has seen the price of the metal rise more than six-fold in four years, Adkerson was bullish, although he declined to forecast the price. It closed at $3.79 per pound in New York on Monday.
"Trying to predict commodity prices is a dead man's game. I wouldn't be surprised if we had $5 copper but I wouldn't be surprised if we had $2.50 or $2 copper," he said. Continued...
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