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                                  UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549




                                    FORM 10-Q




                  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934




                    For the quarter ended September 30, 1998

                           Commission file number 1-82




                            PHELPS DODGE CORPORATION

                            (a New York corporation)




                                   13-1808503

                      (I.R.S. Employer Identification No.)


                 2600 N. Central Avenue, Phoenix, AZ 85004-3089


                  Registrant's telephone number: (602) 234-8100


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports)  and  (2)  has  been  subject  to such  filing
requirements for the past 90 days. Yes __X__ No _____ .

Number of Common Shares outstanding at November 9, 1998: 57,942,591 shares.

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<PAGE>
                            PHELPS DODGE CORPORATION

                          Quarterly Report on Form 10-Q

                    For the Quarter Ended September 30, 1998



                                TABLE OF CONTENTS

Part I.  Financial Information

      Item 1.  Financial Statements
         Statement of Consolidated Income
         Consolidated Balance Sheet
         Consolidated Statement of Cash Flows
         Consolidated Statement of Common Shareholders' Equity
         Notes to Consolidated Financial Information
         Review by Independent Accountants
         Report of Independent Accountants on Review of Interim
           Financial Information

      Item 2.  Management's Discussion and Analysis
         Results of Operations
         Results of Phelps Dodge Mining Company
         Results of Phelps Dodge Industries
         Other Matters Relating to the Statement of Consolidated Income
         Changes in Financial Condition

Part II.  Other Information

      Item 1.  Legal Proceedings

      Item 5.  Other Information

      Item 6.  Exhibits and Reports on Form 8-K

      Signatures

      Index to Exhibits
<PAGE>
                    PHELPS DODGE CORPORATION AND SUBSIDIARIES

                          Part I. Financial Information

Item 1. Financial Statements

STATEMENT OF CONSOLIDATED INCOME
(Unaudited; in millions except per share data)
<TABLE>
<CAPTION>
                                                                                  First Nine
                                                         Third Quarter              Months
                                                         -------------            ----------       
                                                        1998          1997       1998        1997
                                                        ----          ----       ----        ----
<S>                                                  <C>              <C>       <C>         <C>    
SALES AND OTHER OPERATING
 REVENUES                                            $    764.0       961.7     2,356.7     3,048.4
                                                     ----------       -----     -------     -------
OPERATING COSTS AND EXPENSES
   Cost of products sold                                  594.7       664.1     1,790.8     2,102.9
   Depreciation, depletion
    and amortization                                       74.0        72.9       218.5       211.5
   Selling and general
    administrative expense                                 27.4        33.3        91.6       102.2
   Exploration and research
    expense                                                15.2        20.6        41.5        64.3
   (Gain) loss on asset
    dispositions and other
     non-recurring charges
      (see Note 4)                                        (12.6)       20.8      (198.7)       20.8
                                                     ----------       -----     -------     -------
                                                          698.7       811.7     1,943.7     2,501.7
                                                     ----------       -----     -------     -------
OPERATING INCOME                                           65.3       150.0       413.0       546.7
   Interest expense                                       (23.3)      (20.5)      (67.9)      (53.3)
   Capitalized interest                                     0.5         5.0         1.7        11.2
   Miscellaneous income and
    expense, net                                            7.1         7.2        29.4        32.1
                                                     ----------       -----     -------     -------
INCOME BEFORE TAXES, MINORITY
 INTERESTS AND EQUITY IN NET
 EARNINGS OF AFFILIATED
 COMPANIES                                                 49.6       141.7       376.2       536.7
   Provision for taxes on
    income                                                (19.0)      (43.9)     (138.5)     (166.3)
   Minority interests in
    consolidated subsidiaries                              (2.9)        1.0        (6.7)       (4.1)
   Equity in net earnings
    of affiliated companies                                 0.9         5.4         1.7        10.2
                                                     ----------       -----     -------     -------
NET INCOME                                           $     28.6       104.2       232.7       376.5
                                                     ==========       =====     =======     =======

BASIC EARNINGS PER SHARE                             $     0.49        1.74        3.98        6.07
                                                     ==========       =====     =======     =======

DILUTED EARNINGS PER SHARE                           $     0.49        1.72        3.97        6.02
                                                     ==========       =====     =======     =======

AVERAGE NUMBER OF SHARES
 OUTSTANDING - BASIC                                       58.3        60.0        58.4        62.0

AVERAGE NUMBER OF SHARES
 OUTSTANDING - DILUTED                                     58.5        60.5        58.6        62.5
</TABLE>
See Notes to Consolidated Financial Information.
<PAGE>
BUSINESS SEGMENTS
(Unaudited; in millions)
<TABLE>
<CAPTION>
                                                                                  First Nine
                                                         Third Quarter              Months
                                                         -------------            ----------       
                                                        1998          1997       1998        1997
                                                        ----          ----       ----        ----
<S>                                                  <C>              <C>       <C>         <C>    
SALES AND OTHER OPERATING
 REVENUES
   Phelps Dodge Mining
    Company                                          $    421.9       542.3     1,303.5     1,736.4
   Phelps Dodge Industries                                342.1       419.4     1,053.2     1,312.0
                                                     ----------       -----     -------     -------
                                                     $    764.0       961.7     2,356.7     3,048.4
                                                     ==========       =====     =======     =======
OPERATING INCOME (LOSS)
   Phelps Dodge Mining
    Company (see Note 4)                             $     27.5       116.3       117.0       430.5
   Phelps Dodge Industries
    (see Note 4)                                           46.8        44.0       324.1       149.2
   Corporate and other                                     (9.0)      (10.3)      (28.1)      (33.0)
                                                     ----------       -----     -------     -------
                                                     $     65.3       150.0       413.0       546.7
                                                     ==========       =====     =======     =======
</TABLE>
See Notes to Consolidated Financial Information.
<PAGE>
CONSOLIDATED BALANCE SHEET
(Unaudited; in millions)
<TABLE>
<CAPTION>
                                                         Sept. 30,        Dec. 31,
                                                            1998            1997
                                                         ---------       ---------
<S>                                                      <C>             <C>  
ASSETS                                                                  
  Cash and cash equivalents                              $    309.5          157.9
  Accounts receivable, net                                    395.1          420.5
  Inventories                                                 289.0          297.8
  Supplies                                                    114.0          115.1
  Prepaid expenses                                             10.6            7.8
  Deferred income taxes                                        45.4           52.0
                                                         ----------        -------
     Current assets                                         1,163.6        1,051.1
  Investments and long-term                                             
   accounts receivable                                         99.1          131.8
  Property, plant and equipment, net                        3,512.9        3,445.1
  Other assets and deferred charges                           255.4          337.2
                                                         ----------        -------
                                                         $  5,031.0        4,965.2
                                                         ==========        =======
                                                                        
LIABILITIES                                                             
  Short-term debt                                        $     83.1           91.4
  Current portion of long-term debt                            61.5           54.8
  Accounts payable and accrued expenses                       463.4          553.2
  Accrued income taxes                                         29.5            1.7
                                                         ----------        -------
     Current liabilities                                      637.5          701.1
  Long-term debt                                              815.4          857.1
  Deferred income taxes                                       514.8          439.2
  Other liabilities and deferred credits                      342.1          344.1
                                                         ----------        -------
                                                            2,309.8        2,341.5
                                                         ----------        -------
MINORITY INTERESTS IN CONSOLIDATED                                      
 SUBSIDIARIES                                                  96.7          113.3
                                                         ----------        -------
COMMON SHAREHOLDERS' EQUITY                                             
  Common shares, 58.0 outstanding                                       
   (12/31/97 - 58.6)                                          362.6          366.5
  Retained earnings                                         2,420.8        2,301.0
  Accumulated other comprehensive                                       
   income (loss)                                             (151.0)        (146.9)
  Other                                                        (7.9)         (10.2)
                                                         ----------        -------
                                                            2,624.5        2,510.4
                                                         ----------        -------
                                                         $  5,031.0        4,965.2
                                                         ==========        =======
</TABLE>
See Notes to Consolidated Financial Information.                        
<PAGE>
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited; in millions)
<TABLE>
<CAPTION>
                                                                      Nine months
                                                                        ended
                                                                     September 30,
                                                                  -------------------
                                                                     1998        1997
                                                                  ---------     -------
<S>                                                               <C>           <C>  
OPERATING ACTIVITIES
 Net income                                                       $   232.7       376.5
 Adjustments to reconcile net income to net
  cash provided by operating activities:
   Depreciation, depletion and
    amortization                                                      218.5       211.5
   Deferred income taxes                                               40.8        37.6
   Equity earnings net of dividends
    received                                                           (0.1)       (7.3)
   Changes in current assets and
    liabilities:
     (Increase) decrease in accounts
       receivable                                                     (34.8)      (18.2)
     (Increase) decrease in inventories                               (17.3)      (26.2)
     (Increase) decrease in supplies                                   (3.0)        1.1
     (Increase) decrease in prepaid
       expenses                                                        (3.5)      (10.6)
     (Increase) decrease in deferred
       income taxes                                                     6.7         2.2
     Increase (decrease) in interest
       payable                                                         17.3         4.0
     Increase (decrease) in other accounts
       payable                                                        (44.8)      (28.9)
     Increase (decrease) in accrued income
      taxes                                                            28.8         3.2
     Increase (decrease) in other accrued
       expenses                                                        (6.9)       (2.6)
   Gain on asset disposition (see Note 4)                            (198.7)        --
   Other adjustments, net                                              (7.8)       11.5
                                                                  ---------     -------
     Net cash provided by operating
      activities                                                      227.9       553.8
                                                                  ---------     -------
INVESTING ACTIVITIES
 Capital outlays                                                     (248.8)     (444.3)
 Capitalized interest                                                  (1.7)      (11.2)
 Investment in subsidiaries                                          (135.4)      (53.1)
 Proceeds from asset dispositions
  and other (see Note 4)                                              466.5         6.8
                                                                  ---------     -------
     Net cash provided by (used in)
      investing activities                                             80.6      (501.8)
                                                                  ---------     -------
FINANCING ACTIVITIES
 Increase in debt                                                      16.0       316.0
 Payment of debt                                                      (54.0)      (46.3)
 Common dividends                                                     (88.3)      (93.3)
 Purchase of common shares                                            (31.5)     (451.0)
 Other, net                                                             0.9         5.3
                                                                  ---------     -------
     Net cash used in financing activities                           (156.9)     (269.3)
                                                                  ---------     -------
INCREASE (DECREASE) IN CASH AND
 CASH EQUIVALENTS                                                     151.6      (217.3)
CASH AND CASH EQUIVALENTS AT BEGINNING
 OF PERIOD                                                            157.9       470.1
                                                                  ---------     -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                        $   309.5       252.8
                                                                  =========     =======
</TABLE>
See Notes to Consolidated Financial Information.
<PAGE>
CONSOLIDATED STATEMENT OF COMMON SHAREHOLDERS' EQUITY
(Unaudited; in millions)

<TABLE>
<CAPTION>
                                   Common Shares                         Accumulated
                                  ---------------                           Other
                               Number                                   Comprehensive                    Common
                                 of         At Par         Retained         Income                    Shareholders'
                               shares        Value         Earnings         (Loss)          Other         Equity
                               ------        -----         --------         -------         -----         ------
<S>                          <C>           <C>            <C>              <C>            <C>           <C>       
BALANCE AT
 DECEMBER 31, 1997              58.6       $  366.5       $  2,301.0       $ (146.9)      $ (10.2)      $  2,510.4
  Stock options
   exercised                     0.1            0.2              1.8                                           2.0
  Common shares
   purchased                    (0.7)          (4.1)           (27.4)                                        (31.5)
  Restricted shares
   issued, net                    --             --             (0.4)                         2.3              1.9
  Other investment
   adjustments                                                   1.4                                           1.4
  Dividends on common
   shares                                                      (88.3)                                        (88.3)
  Comprehensive
   income:
     Net income                                                232.7                                         232.7
     Other
      comprehensive
      income, net of
      tax:
       Translation
        adjustment                                                             (4.1)                          (4.1)
       Unrealized
        gains on
        securities                                                               --                             --
                                                                           -------                       --------
       Other
        comprehensive
        income                                                                (4.1)                          (4.1)
                                                                           -------                       --------
     Comprehensive
      income                                                                                                 228.6
                             -------       --------       ----------       --------       -------       ----------
BALANCE AT
SEPTEMBER 30, 1998              58.0       $  362.6       $  2,420.8       $ (151.0)      $  (7.9)      $  2,624.5
                             =======       ========       ==========       ========       =======       ==========
</TABLE>
See Notes to Consolidated Financial Information.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL INFORMATION
(Unaudited)

1.       The unaudited  consolidated  financial information presented herein has
         been prepared in accordance with the instructions to Form 10-Q and does
         not include all of the  information  and note  disclosures  required by
         generally accepted accounting principles.  Therefore,  this information
         should  be  read  in  conjunction  with  the   consolidated   financial
         statements and notes thereto  included in the  Corporation's  Form 10-K
         for the year ended  December 31, 1997.  This  information  reflects all
         adjustments  that are,  in the  opinion  of  management,  necessary  to
         present  a fair  statement  of the  results  for  the  interim  periods
         reported.

2.       The results of operations for the  three-month  and nine-month  periods
         ended September 30, 1998, are not necessarily indicative of the results
         to be expected for the full year.

3.       Depending on market  circumstances,  the Corporation  may  periodically
         purchase or liquidate  various copper price protection  contracts for a
         portion of its expected  future mine production to mitigate the risk of
         adverse price  fluctuations.  The  Corporation  currently has no copper
         price protection contracts in place.

4.       Effective  January 1, 1998, the Corporation  sold a 90 percent interest
         in Accuride  Corporation  and related  subsidiaries,  its wheel and rim
         manufacturing  business, to an affiliate of Kohlberg Kravis Roberts and
         Co. (KKR) and the existing  management of Accuride.  That sale resulted
         in a pre-tax gain to the Corporation of $186.1 million, ($122.8 million
         after  taxes,  or $2.10 per common  share).  The  remaining  10 percent
         interest in Accuride was sold to RSTW  Partners  III, L.P. on September
         30, 1998  resulting in a pre-tax gain of $12.6  million  ($8.3  million
         after taxes,  or $0.14 per common share).  Under the terms of the sales
         agreements,  the Corporation  received total proceeds of $465.9 million
         from the two transactions.

         The Corporation's  1997 third quarter earnings included  non-recurring,
         pre-tax charges of $20.8 million ($14.4 million, or 24 cents per common
         share,  after taxes)  primarily due to an early  retirement  program at
         Phelps Dodge Mining Company.

5.       On February 3, 1998, the Corporation acquired the stock of Cobre Mining
         Company Inc. (Cobre) for $113.3 million,  including  acquisition costs.
         The Corporation also assumed Cobre's outstanding debt of $14.8 million.
         The  acquisition  was  at  a  price  of  $3.85  per  common  share  for
         substantially all of Cobre's 27 million common shares, including shares
         issuable  upon the exercise of  outstanding  warrants and options.  The
         primary assets of Cobre include the Continental  Mine,  which comprises
         an open-pit copper mine, two underground  copper mines,  two mills, and
         the surrounding 11,000 acres of land located in southwestern New Mexico
         adjacent to the Corporation's Chino operations.

6.       In the  1998  first  quarter,  the  Corporation  adopted  Statement  of
         Financial Accounting Standards (SFAS) No. 130, "Reporting Comprehensive
         Income." The Corporation has presented the required  information in the
         Consolidated Statement of Common Shareholders' Equity. SFAS No. 130 has
         no  effect  on  the  Corporation's  results  of  operations,  financial
         position, capital resources or liquidity.

7.       On March 4,  1998,  and April 3,  1998,  respectively,  the  Accounting
         Standards  Executive Committee issued Statement of Position (SOP) 98-1,
         "Accounting  for the Costs of Computer  Software  Developed or Obtained
         for  Internal  Use" and SOP 98-5,  "Reporting  on the Costs of Start-Up
         Activities."  These  statements  become  effective  for fiscal  periods
         beginning after December 15, 1998. The Corporation will adopt both SOPs
         in 1999. The Corporation  does not expect either SOP to have a material
         effect on its results of operations or financial position.

8.       In June 1998, the Financial  Accounting Standards Board issued SFAS No.
         133,  "Accounting for Derivative  Instruments and Hedging  Activities."
         This Statement requires recognition of all derivatives as either assets
         or  liabilities   on  the  balance  sheet  and   measurement  of  those
         instruments at fair value. Changes in the fair value of derivatives are
         recorded each period in current earnings or other comprehensive income,
         depending  on whether a  derivative  is  designated  as part of a hedge
         transaction and, if it is, the type of hedge transaction.

         This Statement is effective for fiscal years  beginning  after June 15,
         1999.  Phelps  Dodge plans to adopt SFAS No. 133  effective  January 1,
         2000. The Corporation is evaluating the effect this Statement will have
         on its financial reporting and disclosures.

9.       In October 1998, the  Corporation  acquired the Brazilian  carbon black
         manufacturing  business of Copebras S.A., a subsidiary of Minorco,  for
         $220.0  million.   Columbian  Chemicals,  the  Corporation's  specialty
         chemicals division, has assumed management and operating responsibility
         of the new company. The manufacturing facility has an annual production
         capacity of 170,000 metric tons of carbon black.

REVIEW BY INDEPENDENT ACCOUNTANTS

         The  financial  information  as of  September  30,  1998,  and  for the
three-month and nine-month  periods ended September 30, 1998 and 1997,  included
in Part I  pursuant  to Rule  10-01  of  Regulation  S-X has  been  reviewed  by
PricewaterhouseCoopers   LLP,  the  Corporation's  independent  accountants,  in
accordance  with standards  established  by the American  Institute of Certified
Public Accountants. PricewaterhouseCoopers' report is included in this quarterly
report.

         PricewaterhouseCoopers does not carry out any significant or additional
audit tests  beyond  those that would have been  necessary if its report had not
been  included  in this  quarterly  report.  Accordingly,  such  report is not a
"report" or "part of a registration  statement" within the meaning of Sections 7
and 11 of the Securities Act of 1933 and the liability  provisions of Section 11
of such Act do not apply.
<PAGE>
<AUDIT-REPORT>

                           PRICEWATERHOUSECOOPERS LLP
                        REPORT OF INDEPENDENT ACCOUNTANTS



October 12, 1998


To the Board of Directors and Shareholders of
  the Phelps Dodge Corporation

We have  reviewed the  accompanying  consolidated  balance sheet of Phelps Dodge
Corporation  and its  subsidiaries  as of September  30, 1998,  the statement of
consolidated  income for the three-month and nine-month  periods ended September
30, 1998 and 1997, the  consolidated  statement of cash flows for the nine-month
periods ended  September 30, 1998 and 1997,  and the  consolidated  statement of
common  shareholders' equity for the nine-month period ended September 30, 1998.
This  financial   information  is  the   responsibility   of  the  Corporation's
management.

We conducted our review in accordance with standards established by the American
Institute  of  Certified  Public  Accountants.  A review  of  interim  financial
information consists principally of applying analytical  procedures to financial
data and making  inquiries of persons  responsible  for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with  generally  accepted  auditing  standards,  the  objective  of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material  modifications that should
be made to the accompanying consolidated financial information referred to above
for it to be in conformity with generally accepted accounting principles.

We previously audited in accordance with generally accepted auditing  standards,
the  consolidated  balance  sheet  as of  December  31,  1997,  and the  related
consolidated  statements  of income,  of cash flows and of common  shareholders'
equity for the year then ended (not presented  herein),  and in our report dated
January  15,  1998,  except as to Note 2, which is as of  February  3, 1998,  we
expressed an unqualified opinion on those consolidated financial statements.  In
our opinion, the information set forth in the accompanying  consolidated balance
sheet  information  as of December  31, 1997,  is fairly  stated in all material
respects in relation to the  consolidated  balance  sheet from which it has been
derived.


PricewaterhouseCoopers LLP
Phoenix, Arizona
</AUDIT-REPORT>
<PAGE>
Item 2.  Management's Discussion and Analysis

RESULTS OF OPERATIONS

         Phelps Dodge  Corporation had  consolidated  earnings in the 1998 third
quarter of $20.3 million,  or 35 cents per common share, before a non-recurring,
after-tax  gain  of $8.3  million,  or 14  cents  per  common  share,  from  the
completion of the disposition of Accuride  Corporation,  the Corporation's wheel
and  rim  business  (see  Note 4 to  the  Consolidated  Financial  Information).
Earnings  in the 1997 third  quarter  were $118.6  million,  or $1.96 per common
share, before non-recurring, after-tax charges of $14.4 million, or 24 cents per
common share,  which primarily  reflected an early retirement  program at Phelps
Dodge Mining  Company.  Earnings for the  nine-months  ended September 30, 1998,
were  $101.6  million,  or $1.73  per  common  share,  before  a  non-recurring,
after-tax  gain  of  $131.1  million,  or  $2.24  per  common  share,  from  the
disposition of Accuride Corporation.  Earnings for the corresponding  nine-month
period  in  1997  were  $390.9  million,  or  $6.25  per  common  share,  before
non-recurring charges.

         Net income including the  non-recurring  gain was $28.6 million,  or 49
cents per common share, in the 1998 third quarter and $232.7  million,  or $3.97
per common  share,  for the nine months ended  September  30,  1998.  Net income
including  non-recurring items was $104.2 million, or $1.72 per common share for
the 1997 third quarter,  and $376.5  million,  or $6.02 per common share for the
first nine months of 1997.

         Earnings before non-recurring items were less in the 1998 third quarter
and nine-month  period than in the corresponding  1997 periods  principally as a
result of lower  average  copper  prices.  The  average  spot price per pound of
cathode copper on the New York Commodity Exchange (COMEX) was 27 cents per pound
(26 percent)  lower in the third quarter of 1998 than the third quarter of 1997,
and 32 cents per pound (29 percent) lower in the 1998 nine-month  period than in
the first nine  months of 1997.  The effect of this  price  decrease  was offset
slightly by increased  volumes of copper sold from mine  production and improved
results at the Corporation's carbon black business.

         The  COMEX  spot  price per pound of  copper  cathode,  upon  which the
Corporation  bases its selling price for a majority of its production,  averaged
75 cents in the third  quarter  and 77 cents in the first  nine  months of 1998,
compared with $1.02 and $1.09 in the corresponding 1997 periods.  From October 1
to November 9, 1998, the COMEX price averaged 72 cents per pound,  closing at 72
cents on November 9, 1998.

         Any material change in the price the  Corporation  receives for copper,
or in its unit production  costs, has a significant  effect on the Corporation's
results.  The Corporation's  present share of annual production is approximately
1.8 billion pounds of copper.  Accordingly,  each 1 cent per pound change in the
average  annual copper price received by the  Corporation,  or in average annual
unit  production  costs,  causes a variation in annual  operating  income before
taxes of approximately $18 million.

         Depending on market  circumstances,  the Corporation  may  periodically
purchase or liquidate various copper price protection contracts for a portion of
its  expected  future  mine  production  to mitigate  the risk of adverse  price
fluctuations.  The  Corporation  currently  has no such copper price  protection
contracts in place.

         Sales  were  $764.0  million  in the 1998 third  quarter  and  $2,356.7
million in the first nine  months of 1998,  compared  with  $961.7  million  and
$3,048.4  million  in  the  corresponding  1997  periods.   The  1998  decreases
principally  resulted  from  lower  average  copper  prices  and the  absence of
Accuride  Corporation,  partially  offset by higher sales  volumes of copper and
carbon black.

RESULTS OF PHELPS DODGE MINING COMPANY

         Phelps Dodge Mining Company is an international  business  comprising a
group of companies involved in vertically integrated copper operations including
mining,  concentrating,  electrowinning,  smelting and refining, rod production,
marketing and sales, and related activities.  Copper is sold primarily to others
as rod,  cathode or in  concentrates,  and as rod to the Phelps Dodge Industries
segment.  In addition,  Phelps Dodge Mining  Company at times smelts and refines
copper and produces  copper rod for others on a toll basis.  Phelps Dodge Mining
Company also produces gold, silver, molybdenum and copper chemicals, principally
as by-products,  and sulfuric acid from its air quality control facilities. This
segment also includes the Corporation's  other mining operations and investments
(including  fluorspar,  silver,  lead and  zinc  operations)  and its  worldwide
mineral exploration and development programs.

================================================================================
<TABLE>
<CAPTION>
                                                                            First Nine
                                               Third Quarter                  Months
                                               -------------               -------------
                                             1998        1997           1998            1997
                                             ----        ----           ----            ----
<S>                                        <C>          <C>           <C>             <C> 
Copper production (short tons):                                      
  Total production                         265,400      250,200       792,300         726,900
  Less minority participants'                                        
   shares *                                 44,800       43,800       134,100         126,400
                                           -------      -------       -------         -------
  Net Phelps Dodge share                   220,600      206,400       658,200         600,500
                                           =======      =======       =======         =======
                                                                     
Copper sales (short tons):                                           
  Net Phelps Dodge share from                                        
   own mines                               220,600      210,500       650,700         593,000
  Plus purchased copper                     73,700       63,400       232,700         219,600
                                           -------      -------       -------         -------
  Total copper sales                       294,300      273,900       883,400         812,600
                                           =======      =======       =======         =======
                                                                     
New York Commodity Exchange                                          
  average spot price per                                             
  pound - copper cathodes                  $  0.75         1.02          0.77            1.09
                                                                     
                                                             (in millions)                                                        
                                                                     
Sales and other operating                                            
 revenues                                  $ 421.9        542.3       1,303.5         1,736.4
                                                                     
Operating income                           $  27.5        116.3         117.0           430.5
-------------------------                                         
</TABLE>

*        Minority  participant  interests  include  (i) a 15  percent  undivided
         interest  in the  Morenci,  Arizona,  copper  mining  complex  held  by
         Sumitomo  Metal  Mining  Arizona,  Inc.,  (ii) a one-third  partnership
         interest in Chino Mines  Company in New Mexico held by Heisei  Minerals
         Corporation,  and (iii) a 20 percent  interest in  Candelaria  in Chile
         held by SMMA  Candelaria,  Inc., a jointly owned subsidiary of Sumitomo
         Metal Mining Co., Ltd. and Sumitomo Corporation.

================================================================================

         Phelps  Dodge  Mining  Company's  sales  and other  operating  revenues
decreased by $120.4  million,  or 22 percent,  in the 1998 third  quarter and by
$432.9  million,  or 25 percent,  in the first nine months of 1998 compared with
the corresponding 1997 periods.  These variances  primarily  reflected decreased
average  selling  prices for copper  that  resulted  in  revenue  reductions  of
approximately $148 million and $520 million, respectively.  Partially offsetting
that price  variance  was a 20,400 ton, or 7 percent,  increase in the volume of
copper sold in the 1998 third  quarter and a 70,800 ton, or 9 percent,  increase
in the  volume of copper  sold for the first nine  months.  These  sales  volume
increases  included greater  availability of Phelps Dodge mined copper resulting
from production  increases at the Candelaria mine in Chile and the February 1998
acquisition of Cobre Mining Company Inc. (Cobre) (see Note 5 to the Consolidated
Financial Information).

         Phelps Dodge Mining Company reported  operating income of $27.5 million
in the 1998 third  quarter,  compared with $137.1  million in the  corresponding
1997  period  before  $20.8  million of  non-recurring,  pre-tax  charges  which
primarily reflected an early retirement program. For the nine-month period ended
September 30, 1998, Phelps Dodge Mining Company contributed  operating income of
$117.0 million,  compared with $451.3 million in the  corresponding  1997 period
before the  effects of the  non-recurring  charges.  These  decreases  primarily
reflected  the lower  average  copper  prices,  partially  offset by the  higher
volumes of copper sold from mine  production.  Copper sold from mine  production
increased by 10,100 tons,  or 5 percent,  over third  quarter 1997 and by 57,700
tons, or 10 percent,  over the first nine months of 1997. The comparison for the
nine-month  period also reflected a first quarter  insurance claim recovery that
added $11.5  million to Phelps Dodge  Mining  Company's  operating  income ($6.7
million or 11 cents per share, after taxes) in the first nine months of 1998.

         On October 21, 1998, the Corporation announced  substantial  production
curtailments at Chino Mines Company in New Mexico and the indefinite  closure of
Cobre Mining  Company in New Mexico and the Ojos del Salado  operation in Chile.
These changes will reduce the  Corporation's  global copper production by nearly
100,000 short tons annually, and will result in the elimination of approximately
700 jobs.  The  production  curtailment  at Chino will  occur in phases  between
October 31 and the first half of 1999.  Chino's annual copper production will be
reduced  by  approximately  35,000  short  tons per year and will  result in the
elimination  of about 300 jobs at the facility.  The  underground  mine at Cobre
closed October 21,  resulting in the  elimination  of about 40 jobs.  During the
first half of 1999, the entire operation will close,  reducing copper production
by 35,000 short tons per year,  and resulting in the loss of an  additional  200
jobs. The Ojos del Salado underground mine and concentrator  operations in Chile
closed October 21,  resulting in the elimination of 180 jobs and reducing annual
copper production by approximately 22,000 short tons.

         The collective  bargaining  agreements at Phelps Dodge Mining Company's
Chino operations in New Mexico expired on June 30, 1996. As of November 9, 1998,
employees who were covered by the  agreements  have  continued to work without a
contract.

RESULTS OF PHELPS DODGE INDUSTRIES

         Phelps Dodge  Industries  is a business  segment  comprising a group of
companies  that  manufacture  engineered  products  principally  for the  global
energy, telecommunications,  transportation and specialty chemicals sectors. Its
operations  are  characterized  by  products  with  significant   market  share,
internationally  competitive  costs and  quality,  and  specialized  engineering
capabilities.   This  business  segment  includes  the  Corporation's  specialty
chemical  operations  through Columbian  Chemicals Company and its subsidiaries;
its wire and cable and  specialty  conductor  operations  through  Phelps  Dodge
International  Corporation  and  Phelps  Dodge  Magnet  Wire  Company  and their
subsidiaries  and affiliates;  and, until its disposition in 1998, its wheel and
rim operations through Accuride Corporation and its subsidiaries.

================================================================================
<TABLE>
<CAPTION>
                                                                                    First Nine
                                                     Third Quarter                     Months
                                                     -------------              -----------------
                                                  1998         1997             1998         1997
                                                  ----         ----             ----         ----
                                                                   (in millions)
<S>                                               <C>         <C>            <C>           <C>  
Sales and other operating revenues:
  Specialty chemicals                             $ 104.6       101.5          326.9         316.6
  Wheels and rims *                                    --        78.4             --         247.0
  Wire and cable                                    237.5       239.5          726.3         748.4
                                                  -------     -------        -------       -------
                                                  $ 342.1       419.4        1,053.2       1,312.0
                                                  =======     =======        =======       =======


Operating income:
  Specialty chemicals                             $  17.5        15.3           60.6          51.1
  Wheels and rims *                                  12.6        14.1          198.7          33.9
  Wire and cable                                     16.7        14.6           64.8          64.2
                                                  -------     -------        -------       -------
                                                  $  46.8        44.0          324.1         149.2
                                                  =======     =======        =======       =======
</TABLE>
-------------------------

*        Ninety percent of Accuride Corporation, the Corporation's wheel and rim
         business,  was  sold to KKR and the  existing  management  of  Accuride
         effective  January 1, 1998,  and the remaining 10 percent  interest was
         sold to RSTW Partners  III, L.P. on September 30, 1998,  resulting in a
         total  pre-tax gain of $198.7  million (see Note 4 to the  Consolidated
         Financial Information).

================================================================================

         Phelps Dodge Industries'  reported sales of $342.1 million in the third
quarter and $1,053.2  million for the first nine months of 1998,  compared  with
$419.4  million and $1,312.0  million in the  corresponding  1997  periods.  The
decreases  principally  reflected  the  effect  of the  sale of  Accuride  which
contributed  sales of $78.4 million in the 1997 third quarter and $247.0 million
for the first nine months of 1997.  Also included in the decreases  were reduced
sales  prices for magnet wire  related to low copper  prices,  and the effect of
Asian  economic  disruptions  on the  Corporation's  wire  and  cable  business,
particularly in Thailand.

         During  the  1998  third  quarter,  Phelps  Dodge  Industries  recorded
operating income of $34.2 million,  before a $12.6 million pre-tax gain from the
sale of the final 10 percent of  Accuride,  compared  with $29.9  million in the
corresponding   1997  period  before  Accuride's  $14.1  million   contribution.
Operating  income in the first nine months of 1998 was $125.4  million  before a
$198.7  million  pre-tax  gain from the sale of Accuride,  compared  with $115.3
million  in the  first  nine  months of 1997  before  Accuride's  $33.9  million
contribution.  The 1998  operating  income  exceeded  corresponding  prior  year
periods,  excluding Accuride, despite the continuing Asian economic disruptions.
This reflected strong performances by the Corporation's U.S. and European carbon
black businesses. In addition, the 60 percent owned wire and cable joint venture
in Brazil,  which was acquired at the end of 1997,  helped offset lower earnings
in the wire  and  cable  business  in  Thailand  and  Venezuela  and in the high
performance conductor business in the United States.

         In October 1998, the  Corporation  acquired the Brazilian  carbon black
manufacturing  business of Copebras  S.A., a subsidiary  of Minorco,  for $220.0
million.  Columbian Chemicals,  the Corporation's  specialty chemicals division,
has assumed  management  and operating  responsibility  of the new company.  The
manufacturing  facility has an annual production capacity of 170,000 metric tons
of carbon black.

         The  collective  bargaining  agreement  at  Phelps  Dodge  Magnet  Wire
Company's  Hopkinsville,  Kentucky,  plant  expired on October 11,  1996.  As of
November 9, 1998,  employees who were covered by the agreement have continued to
work without a contract.

OTHER MATTERS RELATING TO THE STATEMENT OF CONSOLIDATED INCOME

         The Corporation's  1998 third quarter  exploration and research expense
was $15.2  million,  a  decrease  of 26  percent  from the 1997  third  quarter.
Exploration  and  research  expense  for the first nine months of 1998 was $41.5
million,  a 35  percent  decrease  from the  corresponding  1997  period.  These
decreases  were  principally  a result of the  closure  of the U.S.  exploration
offices  during the 1997 fourth  quarter,  but also  reflected  generally  lower
exploration expenditures worldwide.

         Miscellaneous  income and  expense,  net,  for the first nine months of
1998 included a non-cash,  pre-tax gain of $10.0 million from the dissolution of
joint  venture   partnerships   between  Phelps  Dodge  and  Sumitomo   Electric
Industries,  Ltd. at five international wire and cable manufacturing and support
companies.   A  non-cash,   pre-tax   gain  of  $6.0  million  was  included  in
miscellaneous income and expense, net, in the corresponding 1997 period from the
exchange  of  shares of a  cost-basis  investment  in a wire and cable  business
located in Greece.

         Interest  expense net of capitalized  interest was $22.8 million in the
third quarter of 1998 and $66.2 million in the first nine months,  compared with
$15.5 million and $42.1 million in the  corresponding  periods in 1997. The 1998
increases  principally reflect interest associated with corporate debt issued in
the 1997 fourth quarter and decreases in capitalized interest resulting from the
completion of the Candelaria expansion in October 1997.

         The Corporation continues to review its "Year 2000" readiness. The Year
2000  issue  stems  from  the  predominant  use in  computer  applications  of a
two-digit field to capture the year (e.g.,  "98" for 1998).  Because the "19" is
assumed in the date,  when  computers  turn their  clocks to the year 2000,  the
two-digit  field will read "00" and some computer  programs will assume the year
is 1900.  Programs that  calculate,  compare,  or sort on a date field may cause
erroneous  results and errors  leading to the risk of business  interruption  or
shutdown  and other  potential  problems.  The Year 2000 issue is a global issue
that is very complex  because of the many  programs  that may be impacted in any
computer  system.  These computer  systems are used to support the activities of
the  Corporation's  businesses  including  financial  systems,  process  control
technology and other computer-controlled equipment.

         The  Corporation  has identified the scope of the Year 2000 issue as it
relates to its operations and all levels of management are providing  leadership
to effect  workable  solutions.  A program  office  team has been  assembled  to
oversee all facets of this project including information  technology and process
control system  conversions,  contracts and agreements with vendors,  suppliers,
and customers,  insurance  policies,  and security  systems.  The Corporation is
working with major industry associations and agencies in North America,  Europe,
Latin  America,  and Asia Pacific to facilitate  the sharing of  strategies  and
solutions.  The  Corporation  has also  hired a  consulting  firm,  PKS  Systems
Integration LLC, to assist in the assessment and implementation of the Year 2000
conversion.

         The conversion project has been structured into four phases - Inventory
Phase,   Assessment   Phase,   Remediation  and  Testing  Phase  and  the  Field
Implementation  Phase. At September 30, 1998, the inventory phase was 98 percent
complete.  The  assessment  phase,  the final cost  estimation  and action  plan
identification  phase,  is  projected  to be  complete  by the end of 1998.  The
remediation and testing phase is expected to be complete by the end of the first
quarter of 1999 and the field implementation phase is expected to be complete by
the end of the  second  quarter  of 1999  for  mission  critical  processes  and
systems.

         The process of  identifying  and  prioritizing  critical  suppliers and
customers has been completed.  A formal program to communicate with and evaluate
these external  organizations is in progress and will be ongoing  throughout the
conversion process. The Corporation is devoting special attention to the utility
and  transportation  companies  due to their  importance  to this  organization.
Similarly,  the  Corporation  is giving  extra  attention to key  customers.  In
addition,  the Corporation is in the process of developing  contingency plans to
offset potential problems related to external organizations.

         Phelps Dodge's  investment in  standardizing  business system platforms
over the past  several  years  has  streamlined  and  facilitated  the Year 2000
conversion  requirements by eliminating redundant  technologies and allowing the
sharing of  services.  In addition,  coordination  of other  initiatives  (e.g.,
replacement of process control and business  systems  previously  identified for
retirement  or upgrade  without  regard to the Year 2000  issue,  with Year 2000
compliant systems) and concentrating  resources on key systems are also expected
to allow the Corporation to achieve desired results.

         The total cost associated with the Year 2000 conversion is not expected
to be material to the Corporation's financial position. The estimated total cost
of the  conversion is  approximately  $10 million as previously  reported in the
1997  Annual   Report  of  Form  10-K.   This  estimate  does  not  include  the
Corporation's  potential  share  of Year  2000  costs  that may be  incurred  at
operations that the Corporation  does not consolidate or those  expenditures for
planned  system and  process  control  upgrades  that are  undertaken  for other
reasons and also incorporate Year 2000 compliant technology.

         Failure to  correct a  material  Year 2000  problem  could  result in a
potential  disruption  to one or  more  of the  Corporation's  operations.  Such
failures could  materially  and adversely  affect the  Corporation's  results of
operations,  liquidity and financial  condition.  Due to the general uncertainty
inherent in the Year 2000 issue,  resulting in part from the  uncertainty of the
readiness of suppliers and  customers,  the  Corporation  is unable to determine
with any certainty the consequences of Year 2000 failures and the materiality of
these  potential  failures.  Therefore,  the  Corporation  is in the  process of
developing  contingency  plans in order to  mitigate  the  extent  of  potential
disruptions to the business operations.

CHANGES IN FINANCIAL CONDITION

         Capital  expenditures  and investments  during the first nine months of
1998 were $279.9  million for Phelps  Dodge  Mining  Company,  including  $113.3
million  for the  acquisition  of the  stock of Cobre  Mining  Company.  Capital
expenditures  and investments  were $105.5 million for Phelps Dodge  Industries.
Capital  expenditures  and  investments  in the  corresponding  1997 period were
$329.8 million for Phelps Dodge Mining Company, including $135.2 million for the
expansion of the Corporation's  Candelaria  mining operations in Chile.  Capital
expenditures  and investments were $149.1 million for Phelps Dodge Industries in
the first nine months of 1997. The Corporation expects capital  expenditures and
investments for the year 1998 to be approximately  $325 million for Phelps Dodge
Mining Company, including the Cobre acquisition,  and approximately $350 million
for Phelps  Dodge  Industries,  including  $220 million for the  acquisition  of
Copebras (see Note 9 to the Consolidated Financial Information).

         At September 30, 1998, the Corporation's total debt was $960.0 million,
compared with $1,003.3 million at year-end 1997. The Corporation's ratio of debt
to total  capitalization  was 26.1 percent at September 30, 1998,  compared with
27.7 percent at December 31, 1997.

         On  September  10,  1998,  the  Corporation  paid a  regular  quarterly
dividend of 50 cents per share on its common shares for the 1998 third  quarter;
the amount paid was $29.4  million,  bringing  total 1998 dividends paid through
September  30 to $88.3  million.  On  November 4, 1998,  the board of  directors
declared a 1998 fourth quarter regular  dividend of 50 cents per common share to
be paid on December 10, 1998, to shareholders of record at the close of business
on November 20, 1998.

         On May 7, 1997, the  Corporation  announced that its board of directors
had  authorized  the  purchase  of  up  to  6  million  of  its  common  shares,
approximately 10 percent of its then outstanding shares. Under that program, the
company  purchased  a total of 3.6  million of its common  shares in 1997,  at a
total cost of $292.9  million.  In 1998 through  November 9, the Corporation has
purchased 0.7 million shares under that  authorization  at a total cost of $35.4
million,  leaving 1.7  million  shares  authorized  for  purchase  under the new
program.  There were 58.0 million  common  shares  outstanding  on September 30,
1998.
<PAGE>
                           Part II. Other Information


Item 1.  Legal Proceedings

         I.  Reference  is made to  Paragraph  II,  section B.1 of Item 3, Legal
Proceedings of the Corporation's  Form 10-K for the year ended December 31, 1997
regarding United States v. Gila Valley Irrigation District, et al., Globe Equity
No. 59 (D. Ariz.).

         The Corporation  recently  purchased  farmlands with  associated  water
rights that are the subject of this litigation. As a result, the Corporation has
been named and served as a party in this case.  The lands and  associated  water
rights are not  currently  used in connection  with any mining  operation of the
Corporation.

         II. On  September  15, 1998,  the  Southwest  Research and  Information
Center and the United  Steelworkers  of America Local 890  (Plaintiffs)  filed a
complaint  in  United  Steel  Workers,  Local  890 and  Southwest  Research  and
Information  Center v. Chino Mines  Company and Phelps  Dodge  Corporation,  CIV
98-1123 LH (D.  N.M.).  The complaint  alleges that Chino Mines Company  (Chino)
(which is two-thirds  owned by the  Corporation)  and the Corporation  failed to
submit to the United States  Environmental  Protection Agency and the New Mexico
Emergency  Response  Commission  toxic chemical release forms for some or all of
the calendar years 1987 through 1997 as required by Section 313 of the Emergency
Planning and Community  Right-to-Know  Act of 1986. This private litigant action
asks for,  among other things,  imposition of monetary  penalties of $25,000 per
day of alleged violation up to and including December 31, 1996, and penalties of
$27,500 per day from  January  1997  forward.  The  Plaintiffs  also advised the
Corporation through a Notice of Intent to Sue that they intend to assert similar
claims against the  Corporation's  Hidalgo smelting  operation near Playas,  New
Mexico.

         On October 6, 1998,  Chino and the  Corporation  filed an answer to the
complaint   denying  all  alleged   violations  of  the  Section  313  reporting
requirements.

Item 5.  Other information

         The advance notice deadline for a shareholder to notify the Corporation
of intent to  introduce a proposal  for  consideration  at an annual  meeting of
shareholders is established by a provision in the Corporation's ByLaws.  Article
II, Section 7 establishes  that, to be timely,  a  shareholder's  notice must be
delivered to or mailed and received at the principal  office of the  Corporation
not less than 60 days and not more than 90 days prior to the  meeting.  The next
Annual Meeting of Shareholders will be held on May 5, 1999.

Item 6.  Exhibits and Reports on Form 8-K

         (a)      Any  exhibits  required  to  be  filed by the  Corporation are
                  listed in the Index to Exhibits.

         (b)      No reports on Form 8-K were  filed by the  Corporation  during
                  the quarter ended September 30, 1998.
<PAGE>
                                   SIGNATURES






         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  Corporation  has duly  caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.




                                               PHELPS DODGE CORPORATION
                                               ------------------------
                                              (Corporation or Registrant)




Date:   November 13, 1998                      By:    Gregory W. Stevens
                                                      ------------------
                                                      Gregory W. Stevens
                                                  Vice President and Controller
                                                  (Principal Accounting Officer)
<PAGE>
                    PHELPS DODGE CORPORATION AND SUBSIDIARIES

                                INDEX TO EXHIBITS




12         Computation of ratios of total debt to total capitalization.



15         Letter  from  PricewaterhouseCoopers  LLP with  respect to  unaudited
           interim financial information.