Phelps Dodge to Sell Part of Arizona Mine Property

Phelps Dodge Corp., the nation’s second-largest copper producer, said Monday that it intends to sell as much as a 40% stake in its prime Arizona mining operations--site of a bitter, 18-month strike--to Sumitomo Corp. and Sumitomo Metal Mining Co. of Japan.

A spokesman for Phelps Dodge in New York said the company expects to use proceeds of the sale to reduce its long-term debt, which totaled about $570 million last year.

The company, which has not reported a full-year profit since 1981, declined to say how much it will realize from the sale.

Under the transaction, which is scheduled to be completed this summer, Phelps Dodge would continue to operate its mining properties and facilities in Morenci, Ariz.

These include open-pit mines and concentrators (which upgrade the mineral for use in fabrication), the announcement said, but not the Morenci smelter, which was shut down temporarily at the end of the year. The mining properties can produce more than 200,000 tons of copper annually.

While the announcement of the firms’ signing of a letter of intent to enter a joint venture described Sumitomo’s potential position in the venture only as “a significant minority interest” in the Arizona properties, spokesman Richard W. Pendleton Jr. said the companies are discussing the sale of a stake ranging from 25% to 40%.

Separately, Phelps Dodge said the strike by 13 unions representing employees at the company’s Arizona operations was apparently over.

Workers at the four facilities voted 1,908 to 87 in favor of ending union representation. Though the unions, led by the United Steelworkers, are expected to protest the vote to decertify. The National Labor Relations Board is not expected to throw out the vote.