Mar.23, (Reuters) - The U.S. economy is improving steadily and helping drive copper prices to historic highs, the head of the world's largest publicly traded copper producer said on Wednesday.
Richard Adkerson, president and chief executive of Freeport-McMoRan Copper & Gold (FCX.N) also told the Reuters Global Mining and Steel Summit his company was ramping up production at some U.S. mines it idled during the recession and pinpointed a significant growth opportunity in the use of antimicrobial copper for touch surfaces in hospitals.
In addition, Freeport has the balance sheet to handle a large acquisition, but Adkerson stressed its strategy is on internal growth.
Freeport's stock has doubled in the past year as gold and other metal prices soared, and it rose 5.16 percent to $54.98 on Wednesday afternoon on the New York Stock Exchange. Copper was up 2 percent at $4.41 a pound.
Asked about the outlook for copper, Adkerson declined to speculate on whether the metal's price was headed higher than its record in February of $4.64 a pound. But he did say: "Over a long period of time ... the world is going to need lots of copper.
"I don't allow myself to think about a price ... you have to prepare yourself for different price scenarios. (But) it is striking to see world record copper prices at levels previously thought of as unimaginable -- at a time when you had the U.S. economy and the rest of the developed world being so weak.
"Export business (and) consumer spending are improving, automobiles (are) strong, so this recovery ... is translating into improved demand for copper," he said.
Asked if Freeport's order books were full, Adkerson said they were. "We are seeing this recovery -- (it's) gradual, but a definite recovery in the U.S., although the residential and commercial construction business is still very weak."
NO BIG ACQUISITIONS SEEN
Freeport, which mines in the southwestern United States, South America, Indonesia and Africa, grew to become the world's largest publicly traded copper miner by buying larger rival Phelps Dodge for nearly $26 billion in 2007.
Asked if it was in the market for another acquisition, Adkerson said Freeport had the balance sheet to support a big deal although he doesn't expect to buy any rivals soon.
"Certainly, if an opportunity came to us that we thought would be accretive to shareholder value, we are in a position to act and we have the financial resources today," he said.
"We could finance a very large deal, and if we did a deal it would almost certainly be a large deal."
He said any acquisition would likely be to expand the company's base metals business, rather than its gold mining.
Discussing global copper markets, Adkerson said Chinese demand should continue to grow with the country's infrastructure projects, but Freeport sees new elements of demand emerging from the healthcare industry.
He said there were significant growth opportunities with the incorporation of antimicrobial copper touch surfaces in hospitals and clinics, and other green initiatives.
"It's an exciting opportunity for the industry to have applications in hospitals and clinics, but also in public buildings in general," Adkerson said.
"The science clearly supports it ... copper kills bacteria, and when you look at the statistics of the illnesses and mortalities from infections in health facilities, in hospitals, it's mind-boggling."
Adkerson also said Freeport was supporting its copper smelter customers in Japan, shuttered by the recent earthquake and tsunami. But excess global smelter capacity should soak up the 22 percent of Freeport's copper concentrates it normally sells to the Japanese market.
The earthquake and tsunami devastated parts of northern Japan that house two copper smelters and a refinery.