Posted: (01/25/01, 01:30 PM)

California Power Crisis Partly to Blame for Phelps Dodge Cutbacks

Phelps Dodge Corp. is notifying employees it may be cutting back mining operations in New Mexico and Arizona, partly because of higher power costs caused by California's energy crisis.

No decision has been made yet on the copper giant's operations at Chino Mines near Silver City and in Tyrone, N.M., and Sierrita, Ariz., which employ a combined 2,350 people, the company said Thursday. “Until the California power crisis is resolved its negative impact on industrial facilities in surrounding states, including our New Mexico and Arizona operations, will be huge in terms of additional plant closings and employee layoffs,” said J. Steven Whisler, Phelps Dodge chairman, president and chief executive.

The company's energy costs were 65 percent higher in the fourth quarter of 2000 than they had been during the same period in 1999, he said.

Employees and their unions will receive letters by mail this week advising them production cutbacks could begin following a legally required, 60-day notification period.

Chino Mines Co. produced 271 million pounds of copper in 2000. Phelps Dodge Tyrone Inc. produced 159 million pounds of copper last year. Phelps Dodge Sierrita Inc. produced 245 million pounds of copper and 22 million pounds of molybdenum last year.

Phelps Dodge is the world's second-largest copper producer, with 15,500 employees in 27 countries.

http://www.12news.com/12_News/story.html?StoryID=4622

-- Martin Thompson (mthom1927@aol.com), January 25, 2001