Freeport-McMoRan, one of the world’s largest miners of copper and gold, entered a definite agreement Monday to sell a 13 percent stake in its Morenci, Arizona copper mine to Sumitomo Metal Mining Co., Ltd. (SMM) for $1 billion in cash. SMM, a Japanese mining company, currently owns 15 percent of the Morenci mine, which is the largest copper mining operation in North America, a company statement said.

Following the deal — expected to close in mid 2016 — 72 percent of the Morenci joint venture will be owned by Freeport, 15 percent by SMM and the remaining 13 percent by a fully owned affiliate of SMM. In 2015, Freeport registered revenues of $2.2 billion from its 85 percent stake in the Morenci mine, the statement said. 

Arizona-based Freeport is in the midst of deep budget cuts and staff reduction — announced last year — as the miner and energy producer attempts to weather an ongoing slump in copper prices.

The company, laden with about $20 billion in debt after its 2013 push to diversify into the oil and gas business, said it would use the proceeds from Monday’s deal to repay its term loans and borrowings from other credit facilities. Freeport expected to record an approximate $550 million gain from the transaction, according to the statement.

“This transaction represents an important initial step toward our objective to accelerate debt reduction and restore our balance sheet, while retaining a portfolio of high quality assets and resources,” Richard C. Adkerson , the company’s president and CEO, said.

In August last year, the company announced plans to slash its mining capital budget for 2016 by 25 percent and also cut 10 percent of its U.S. mining staff.

Shares of the company have lost more than 73 percent, or more than two-thirds, of their market value in the past 12 months. The S&P Metals and Mining Select Industry Index fell by about 50 percent during the same period.