Tomahawk, WI 8/08/2013 (Basicsmedia) – Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) was established in 1987 and has chosen to locate its headquarters in Phoenix, Arizona. This is a company with the resources and expertise to carry out exploration of mineral resources anywhere in the world. This company has gone through a lot of problems in many aspects and the only way out right now is for it to go up. The company, which is based in Phoenix, may be on its way up. Let’s take a look at factors responsible for this upward trend.

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This image shows FCX performance in terms of net profitability.

The image is courtesy of www.4-traders.com

How Has FCX Stock Price Been Affected?

This is where any investor must start with. It is crucial for investors to take a look at the stock price of any company they are interested in, and use other factors as well to examine how healthy it is financially. Whereas one year ago anyone interested in buying FCX shares would have been forced to pay more than $45, these days, you only need to part with $20 for each share. What this means is that anyone who bought the shares a year ago, cannot sell them and expect a profit right now. If you must sell, you should be prepared to incur losses.

Why Has FCX Stock Price Collapsed?

There are several reasons behind the collapse or drop experienced by FCX stock. The first one has to do with the fact that the company endured low prices for copper. Each pound of copper used to cost around $4, but the price has now dropped to slightly above $3 per pound. FCX is the largest producer of copper which is publicly traded anywhere in the world. Therefore, any drop in the price of copper is likely to affect or interfere with the stock price, and this is exactly what has happened. There is nothing much which the company could have done.

Secondly, workers at some of the biggest mining plants owned by FCX chose to go on strike in 2011. The plant which was affected by this strike is Papua in Indonesia where close to 24k employees work. When they went on strike, the company’s top executives decided to temporarily shut the plant down until an amicable solution was arrived at. The decision by FCX to buy some companies, Plains Exploration &Production as well as McMoRan Exploration, was a contributory factor to the drop in stock price which was later witnessed at NYSE.

However, it is worth pointing out that most of the events which led to the drop in stock price, and not very pleasing financial results, are now a thing of the past. Henceforth, the company is expected to move nowhere else apart from up. As the demand for copper, both in the U.S and China as well as other spots in the world, continues to rise, there is expectation that FCX will soon be on its way up once again. This would surely be a great piece of news to all investors hence my recommendation for them to hold and wait for the company’s fortunes to turn around soon.

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