"This action by the board supports one of four stated priorities for our cash, namely, to strengthen our balance sheet and improve our financial flexibility," said J. Steven Whisler, chairman and chief executive officer. "Funding these trusts is a prudent and responsible use of the cash expected to come from the sales of Columbian Chemicals Co. and Phelps Dodge Magnet Wire's North American assets. The trusts allow us to meet important societal and employee obligations regardless of the point in the copper cycle, and will remove investor uncertainties regarding them."

"As previously disclosed, the company intends to maintain a solid investment-grade credit rating throughout the copper cycle, keep a debt-to-capitalization ratio of less than 25 percent and retain sufficient cash balances to maintain Phelps Dodge's financial flexibility and to ensure appropriate funding of its growth and asset improvement projects. We will continue to maintain financial discipline by focusing on our four priorities for cash in the context of our capital structure and potential strategic opportunities, with the objective of increasing long-term shareholder value."

Phelps Dodge Corp. is one of the world's leading producers of copper and molybdenum, the largest producer of molybdenum-based chemicals and continuous-cast copper rod, and among the leading producers of magnet wire and carbon black. The company and its two divisions, Phelps Dodge Mining Co. and Phelps Dodge Industries, employ approximately 15,500 people worldwide.