Phelps-Dodge in the mid nineties was the place to invest. They own the Arizona copper industry and many mines were closed at the time. I’ll bet they have done well in the last 15 years.
I believe they were bought out by Freeport-McMoran some years ago.
The Phelps-Dodge story is rather interesting. They effectively committed suicide. They “sold themselves short”!
Here’s how it happened:
Virtually *all* miners (and farmers, for that matter) have to “sell-forward” some part of their production. Why? Because they have a payroll to meet this week, this month, and they do so by selling their output. Fine. But in times of declining ore & metals prices, (eg; most of the 90’s) on market price spikes they agree to sell some part of their production at those spikey-high prices to others, typically users of the metal who see the same price spike(s) and fear a price ramp. Thus, they (the users) wish to lock in today’s “mildly spiked” price instead of waiting and having to suffer tomorrow’s “badly-spiked” price. It is not one whit different than the homeowner who sees soup on sale and buys a dozen cans to lock in today’s price.
Fast forward. After a decade of frustratingly low prices, P-D had sold SO MUCH copper forward that they now had a serious problem. And that was, underneath their “sell-forward” contracts they had committed to, the market price of Copper had soared. And so now, they were committed to supply kilotons of copper at a BELOW market price! Those commitments, from an accounting standpoint were big bazooka holes in their balance sheet because they were now locked-in losses instead of locked in gains. ANd so they devalued the company, allowing another co to come in. But how could another company come in advantageously? Aha. If that other company itself was a copper miner and could mine the copper needed to fulfill those contracts (which of course persisted over the sale of the company) at below-market prices, the buyer would suffer a slight loss, yes, but could acquire PD at effectively a discount. This is precisely what happened. I believe FCX and PD had been or were in merger talks several times over many years but it just didn’t happen for reasons I don’t know. The big hole that PDs’ sell-forward contracts created gave FCX the club it need to force the issue, and they did.