Freeport-McMoRan Copper & Gold Inc., the best-performing stock among North American mining companies in 2007, turned into the worst this year. Analysts say the company may not fare much better in 2009 as copper prices slump.

Freeport, the world’s second-largest copper producer has fallen 79 percent, the biggest loss in the 16-member Philadelphia Gold & Silver Index and the steepest decline since the shares started trading in 1996, as copper tumbled 58 percent in New York Mercantile Exchange trading.

Chief Executive Officer Richard Adkerson spent much of 2008 planning to expand until the rout in metals forced cuts in output and jobs and halted dividend payments and share buybacks. Freeport may have to make more cuts next year unless copper recovers because production costs are higher than metal prices for much of its North American operations, according to company data.

“Credit is still dead, inventories are still piling up and there’s no demand to build anything,” Chris Wang, co-founder of SYW Capital Management LLC in New York, said in a telephone interview. “He’s got to cut more at the operations, lay off people at central offices.”

Freeport produces two-thirds of its U.S. output at a cash cost of $1.40 to $1.60 a pound, the company said earlier this month. That means mines expected to yield 1.3 billion pounds of the metal next year, or almost a third of total output, are unprofitable at current prices.

----------------------

As long as we keep seeing general commodities fall and consumers lose both confidence and ability to buy, the precious metals will at best, be climbing a wall of worry. Explosive moves don't seem likely unless some "event" causes a significant increase in awareness and understanding of value and stimulates a move to real safety.