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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 June 30, 1997

                           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 August 7, 1997:  60,391,156 shares.

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<PAGE>
                            PHELPS DODGE CORPORATION

                          Quarterly Report on Form 10-Q

                       For the Quarter Ended June 30, 1997



                                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 4.  Submission of Matters to a Vote of Security Holders

      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)

                                               Second Quarter  First Six Months
                                               --------------  ----------------
                                                1997    1996    1997      1996
                                               ------  ------  ------    ------

SALES AND OTHER OPERATING REVENUES .......... $1,065.0  957.7  2,086.7  1,962.4
                                              --------  -----  -------  -------

OPERATING COSTS AND EXPENSES
  Cost of products sold .....................    742.9  646.9  1,438.8  1,311.4
  Depreciation, depletion and amortization ..     69.7   62.7    138.6    123.9
  Selling and general administrative expense      35.2   31.2     68.9     61.7
  Exploration and research expense ..........     26.5   21.4     43.7     40.1
                                              --------  -----  -------  -------
                                                 874.3  762.2  1,690.0  1,537.1
                                              --------  -----  -------  -------

OPERATING INCOME ............................    190.7  195.5    396.7    425.3
  Interest expense ..........................    (16.4) (10.3)   (32.8)   (27.5)
  Capitalized interest ......................      3.7    0.3      6.2      0.5
  Miscellaneous income and expense, net .....     15.0    2.2     24.9     17.2
                                              --------  -----  -------  -------

INCOME BEFORE TAXES, MINORITY INTERESTS 
 AND EQUITY IN NET EARNINGS OF AFFILIATED 
 COMPANIES ..................................    193.0  187.7    395.0    415.5
  Provision for taxes on income .............    (57.8) (62.2)  (122.4)  (135.1)
  Minority interests in consolidated 
   subsidiaries .............................     (2.8)  (3.0)    (5.1)    (6.4)
  Equity in net earnings of affiliated 
   companies ................................      2.4    3.8      4.8      5.4
                                              --------  -----  -------  -------

NET INCOME .................................. $  134.8  126.3    272.3    279.4
                                              ========  =====  =======  =======

EARNINGS PER SHARE .......................... $   2.16   1.90     4.28     4.16
                                              ========  =====  =======  =======

AVERAGE NUMBER OF SHARES OUTSTANDING ........     62.4   66.6     63.7     67.1

See Notes to Consolidated Financial Information.
<PAGE>

BUSINESS SEGMENTS
-----------------
(Unaudited; in millions)
                                               Second Quarter  First Six Months
                                               --------------  ----------------
                                                1997    1996    1997      1996
                                               ------  ------  ------    ------

SALES AND OTHER OPERATING REVENUES
  Phelps Dodge Mining Company ............... $  603.8  529.3  1,194.1  1,113.9
  Phelps Dodge Industries ...................    461.2  428.4    892.6    848.5
                                              --------  -----  -------  -------
                                              $1,065.0  957.7  2,086.7  1,962.4
                                              ========  =====  =======  =======

OPERATING INCOME (LOSS)
  Phelps Dodge Mining Company ............... $  142.4  146.3    314.2    330.9
  Phelps Dodge Industries ...................     59.9   60.1    105.2    114.5
  Corporate and other .......................    (11.6) (10.9)   (22.7)   (20.1)
                                              --------  -----  -------  -------
                                              $  190.7  195.5    396.7    425.3
                                              ========  =====  =======  =======

See Notes to Consolidated Financial Information.
<PAGE>
CONSOLIDATED BALANCE SHEET
--------------------------
(Unaudited; in millions)

                                                          June 30,  December 31,
                                                            1997        1996
                                                          --------  ----------- 


ASSETS
   Cash and short-term investments, at cost ............. $  352.1      470.1   
   Accounts receivable, net .............................    515.0      489.1 
   Inventories ..........................................    308.1      293.0 
   Supplies .............................................    117.0      117.0 
   Prepaid expenses .....................................     17.4        6.1 
   Deferred income taxes ................................     45.1       46.2 
                                                          --------    ------- 
       Current assets ...................................  1,354.7    1,421.5 
   Investments and long-term accounts receivable ........    137.5       86.4 
   Property, plant and equipment, net ...................  3,163.9    3,020.5 
   Other assets and deferred charges ....................    287.5      288.0 
                                                          --------    ------- 
                                                          $4,943.6    4,816.4 
                                                          ========    ======= 
                                                                              
LIABILITIES                                                                   
   Short-term debt (see Note 4) ......................... $  195.9       66.5 
   Current portion of long-term debt ....................     48.5       38.2 
   Accounts payable and accrued expenses ................    549.1      564.9 
   Dividends payable (see Note 5) .......................     30.6         --
   Income taxes .........................................     18.3       16.3 
                                                          --------    ------- 
       Current liabilities ..............................    842.4      685.9 
   Long-term debt (see Note 4) ..........................    602.8      554.6 
   Deferred income taxes ................................    457.2      424.9 
   Other liabilities and deferred credits ...............    315.9      309.6 
                                                          --------    ------- 
                                                           2,218.3    1,975.0 
                                                          --------    ------- 
MINORITY INTERESTS IN CONSOLIDATED SUBSIDIARIES .........     90.4       85.5 
                                                          --------    ------- 
COMMON SHAREHOLDERS' EQUITY                                                   
   Common shares, 61.1 outstanding (12/31/96 - 64.7) ....    382.1      404.4 
   Retained earnings ....................................  2,372.2    2,465.0 
   Cumulative translation adjustments ...................   (105.2)     (98.8)
   Other ................................................    (14.2)     (14.7)
                                                          --------    ------- 
                                                           2,634.9    2,755.9 
                                                          --------    ------- 
                                                          $4,943.6    4,816.4 
                                                          ========    ======= 

See Notes to Consolidated Financial Information.
<PAGE>
CONSOLIDATED STATEMENT OF CASH FLOWS
------------------------------------
(Unaudited; in millions)

                                                       Six months ended June 30,
                                                       -------------------------
                                                              1997      1996  
                                                            -------    ------ 
OPERATING ACTIVITIES                                                          
   Net income ............................................  $ 272.3     279.4 
   Adjustments to reconcile net income to net cash                            
     provided by operating activities:                                        
       Depreciation, depletion and amortization ..........    138.6     123.9 
       Deferred income taxes .............................     35.5      43.7 
       Equity earnings net of dividends received .........     (1.9)     (4.9)
       Changes in current assets and liabilities:                             
         (Increase) decrease in  accounts receivable .....    (29.8)     (5.3)
         (Increase) decrease in inventories ..............    (18.5)     (0.6)
         (Increase) decrease in supplies .................      1.3       2.1 
         (Increase) decrease in prepaid expenses .........    (11.4)    (22.3)
         (Increase) decrease in deferred income taxes ....      1.0       1.3 
         Increase (decrease) in interest payable .........      2.0       0.8 
         Increase (decrease) in other accounts payable ...     (8.4)     (7.1)
         Increase (decrease) in income taxes .............      1.9      (1.6)
         Increase (decrease) in other accrued expenses ...     (6.1)    (10.7)
       Other adjustments, net ............................     (1.3)      6.8 
                                                            -------     ----- 
               Net cash provided by operating activities .    375.2     405.5 
                                                            -------     ----- 
INVESTING ACTIVITIES                                                          
   Capital outlays .......................................   (281.9)   (209.0)
   Capitalized interest ..................................     (6.2)     (0.5)
   Investment in subsidiaries ............................    (33.7)    (30.0)
   Proceeds from asset dispositions and other, net .......     (1.3)      2.0 
                                                            -------     ----- 
               Net cash used in investing activities .....   (323.1)   (237.5)
                                                            -------     ----- 
FINANCING ACTIVITIES                                                          
   Increase in debt ......................................    214.3      15.6 
   Payment of debt .......................................    (24.3)     (6.6)
   Common dividends ......................................    (63.2)    (63.5)
   Purchase of common shares .............................   (306.6)   (191.3)
   Other, net ............................................      9.7      10.3 
                                                            -------     ----- 
               Net cash used in financing activities .....   (170.1)   (235.5)
                                                            -------     ----- 
DECREASE IN CASH AND SHORT-TERM INVESTMENTS ..............   (118.0)    (67.5)
CASH AND SHORT-TERM INVESTMENTS AT BEGINNING OF PERIOD ...    470.1     608.5 
                                                            -------     ----- 
CASH AND SHORT-TERM INVESTMENTS AT END OF PERIOD .........  $ 352.1     541.0 
                                                            =======     ===== 

See Notes to Consolidated Financial Information.
<PAGE>
CONSOLIDATED STATEMENT OF COMMON SHAREHOLDERS' EQUITY
-----------------------------------------------------
(Unaudited; in millions)


                              Common Shares            Cumulative
                           -----------------           Translation    Common
                             Number   At Par  Retained Adjustments Shareholders'
                           of Shares  Value   Earnings  and Other     Equity
                           ---------  ------  --------  ---------     ------

BALANCE AT DECEMBER 31, 1996   64.7  $ 404.4  $2,465.0  ($ 113.5)   $ 2,755.9 
  Stock options exercised ..    0.4      2.7      10.3                   13.0 
  Common shares purchased ..   (4.0)   (25.0)   (281.6)                (306.6)
  Net income ...............                     272.3                  272.3 
  Dividends declared on                                                       
    common shares ..........                     (93.8)                 (93.8)
  Translation adjustment ...                                (6.4)        (6.4)
  Other ....................                                 0.5          0.5 
                               ----  -------  --------  --------    --------- 
BALANCE AT JUNE 30, 1997 ...   61.1  $ 382.1  $2,372.2  ($ 119.4)   $ 2,634.9 
                               ====  =======  ========  ========    ========= 
                                                                    
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, 1996.  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 six-month  periods
         ended June 30, 1997, 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.

         During the 1996 third quarter, the Corporation  liquidated a portion of
         its copper price  protection  contracts that covered  anticipated  mine
         production in the first quarter of 1997.  Consequently,  a $6.8 million
         gain was recognized in pre-tax income during the 1997 first quarter.

4.       The  Corporation's  short-term  debt  increased  from $66.5  million on
         December 31, 1996, to $195.9  million on June 30, 1997,  primarily as a
         result of borrowings under the Corporation's revolving credit agreement
         to support the  Corporation's  capital  expenditure  and share purchase
         programs.  The revolving credit  agreement  between the Corporation and
         several lenders was amended on June 25, 1997. The agreement, as amended
         and  restated,  permits  borrowings  of  up  to $1  billion  until  its
         scheduled  maturity  on June 25,  2002.  The  agreement  allows for two
         one-year renewals beyond the scheduled maturity date if the Corporation
         requests and receives  approval from at least two-thirds of the lenders
         involved.  Interest is payable at a fluctuating rate based on the agent
         bank's  prime rate or a fixed rate  based on the  Eurodollar  Interbank
         Offered Rate (LIBOR),  or at fixed rates offered  independently  by the
         several  lenders,  for  maturities  of from  seven  to 360  days.  This
         agreement  provides for a facility fee of six and one-half basis points
         (0.065  percent)  on total  commitments.  The  agreement  requires  the
         Corporation  to maintain a minimum  consolidated  tangible net worth of
         $1.1   billion  and  limits   indebtedness   to  50  percent  of  total
         consolidated  capitalization.  There were  borrowings  of $125  million
         under this agreement at June 30, 1997;  there were no borrowings  under
         this agreement at December 31, 1996.

         In addition,  the  Corporation's  long-term  debt increased from $554.6
         million on  December  31,  1996,  to $602.8  million on June 30,  1997.
         During the second quarter of 1997, the  Corporation's  80-percent-owned
         Chilean  subsidiary,  Compania  Contractual  Minera Candelaria  (CCMC),
         borrowed $30 million of 12-year,  dollar-denominated  debt to refinance
         Chilean  peso-denominated  debt that was prepaid in December  1996.  In
         addition,  during  the  quarter  CCMC  borrowed  $58  million of a $150
         million,  12-year  dollar-denominated  facility  arranged  in  order to
         partially finance CCMC's $337 million expansion project.  Both of these
         facilities are based on floating rates tied to six-month  LIBOR and are
         non-recourse to the Corporation.  Under the proportional  consolidation
         method,  the  Corporation  reflects 80 percent of these  amounts in its
         financial  statements.  The Corporation  also caused CCMC to sell the 9
         percent and 11 percent  interest rate caps  purchased in 1993 that were
         intended  to limit  the  effect  of  increases  in the  cost of  CCMC's
         floating rate debt. In turn, the Corporation  caused CCMC to enter into
         interest rate swaps with certain financial  institutions to effectively
         convert all of CCMC's  floating rate debt to 7.84  percent,  fixed rate
         debt for the life of the debt. The obligations  under the interest rate
         swaps are non-recourse to the Corporation.

5.       On June 25,  1997,  the  Corporation's  board of  directors  declared a
         regular  quarterly  dividend of 50 cents per common  share for the 1997
         third  quarter.  This  dividend is to be paid on September 10, 1997, to
         common  shareholders  of record at the close of  business on August 20,
         1997. This has resulted in an outstanding  dividends payable balance as
         of June 30, 1997, of $30.6 million.

6.       The effect of the  implementation of Statement of Financial  Accounting
         Standards  No. 128,  "Earnings per Share," would be immaterial on a pro
         forma  basis  for  the  calculation  of  earnings  per  share  for  the
         three-month and six-month periods ended June 30, 1997.




                        REVIEW BY INDEPENDENT ACCOUNTANTS
                        ---------------------------------

         The financial  information as of June 30, 1997, and for the three-month
and six-month periods ended June 30, 1997 and 1996,  included in Part I pursuant
to Rule 10-01 of Regulation S-X has been reviewed by Price Waterhouse LLP (Price
Waterhouse),  the  Corporation's  independent  accountants,  in accordance  with
standards established by the American Institute of Certified Public Accountants.
Price Waterhouse's report is included in this quarterly report.

         Price Waterhouse 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>
                              PRICE WATERHOUSE LLP
                        REPORT OF INDEPENDENT ACCOUNTANTS


To the Board of Directors and Shareholders of
  Phelps Dodge Corporation


We have  reviewed the  accompanying  consolidated  balance sheet of Phelps Dodge
Corporation  and its  subsidiaries  as of June  30,  1997  and the  consolidated
statements of income, of cash flows and of common  shareholders'  equity for the
three-month and six-month  periods ended June 30, 1997 and 1996. These financial
statements are 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 consolidated  financial  statements referred to above for them 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,  1996,  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,  1997 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, 1996, is
fairly stated in all material  respects in relation to the consolidated  balance
sheet from which it has been derived.


Price Waterhouse LLP



Phoenix, Arizona
July 10, 1997
</AUDIT-REPORT>
<PAGE>
Item 2.  Management's Discussion and Analysis
-------  ------------------------------------

                              RESULTS OF OPERATIONS

         Phelps Dodge Corporation had consolidated net income of $134.8 million,
or $2.16 per common share,  in the second quarter of 1997,  compared with $126.3
million,  or $1.90 per common share, in the 1996 second quarter.  Net income for
the six months  ended June 30,  1997,  was $272.3  million,  or $4.28 per common
share,  compared  with  $279.4  million,  or  $4.16  per  common  share  in  the
corresponding  1996 period.  Earnings per share in the three-month and six-month
periods  ended  June  30,  1997,   were  higher  than  those   reported  in  the
corresponding  1996 periods  principally due to a decrease in the average number
of shares outstanding as a result of the Corporation's share purchase program.

         Operating  income in the 1997  second  quarter  was $190.7  million,  a
decrease of $4.8 million from the  corresponding  1996 period  principally  as a
result of higher  copper  production  costs and lower sales volumes of specialty
chemicals in the European  markets.  Operating  income of $396.7 million for the
six-month  period  ended  June  30,  1997,  was  $28.6  million  less  than  the
corresponding  1996 period  principally due to higher copper  production  costs,
lower sales  volumes of  specialty  chemicals  in the  European  markets and the
effects of a first quarter strike at the Corporation's  London,  Ontario,  wheel
and rim  plant.  Increased  sales  volumes in the  Corporation's  wire and cable
businesses  and continued  strength in the North  American wheel and rim markets
partially offset these negative factors in 1997.

         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
1.6 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 $16 million.

         The  COMEX  spot  price per pound of  copper  cathode,  upon  which the
Corporation  bases its selling price for a majority of its production,  averaged
$1.14 in the second quarter and $1.13 in the first six months of 1997,  compared
with $1.16 and $1.17 in the corresponding 1996 periods. From July 1 to August 7,
1997, the COMEX price  averaged  $1.09 per pound,  closing at $1.08 on August 7,
1997.

         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.  For a  further  discussion  of  the  Corporation's  copper  price
protection  arrangements  for 1997  production,  see Note 3 to the  Consolidated
Financial Information.

         Sales were  $1,065.0  million in the 1997 second  quarter and  $2,086.7
million  in the first six  months of 1997,  compared  with  $957.7  million  and
$1,962.4  million  in  the  corresponding  1996  periods.   The  1997  increases
principally  resulted from increased sales of wire and cable products and wheels
and rims, and from increased amounts of copper purchased for resale.
<PAGE>
                     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  activites.  Copper is sold primarily to others
as rod,  cathode  or  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.

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

                                             Second Quarter     First Six Months
                                             --------------     ----------------
                                            1997       1996      1997     1996
                                            ----       ----      ----     ----

Copper production (short tons):
  Total production-------------------------241,400   236,000   476,700   467,400
  Less minority participants' shares *----- 41,900    40,800    82,600    82,000
                                           -------   -------   -------   -------

  Net Phelps Dodge share-------------------199,500   195,200   394,100   385,400
                                           =======   =======   =======   =======


Copper sales (short tons):
  Net Phelps Dodge share from
    own mines------------------------------189,700   189,000   382,500   379,400
  Purchased copper------------------------- 83,100    57,500   156,200   119,600
                                           -------   -------   -------   -------

  Total copper sales-----------------------272,800   246,500   538,700   499,000
                                           =======   =======   =======   =======


New York Commodity Exchange
  average spot price per
  pound - copper cathodes------------------$  1.14      1.16      1.13      1.17

                                                         (in millions)

Sales and other operating revenues---------$ 603.8     529.3   1,194.1   1,113.9

Operating income---------------------------$ 142.4     146.3     314.2     330.9

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

*        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 of copper increased by 26,300 tons
or 11 percent in the second  quarter of 1997 and by 39,700  tons or 8 percent in
the first six months of 1997 compared with the corresponding  1996 periods.  The
sales volume  increases  principally  consisted of copper  purchased for resale.
Resulting sales and other operating  revenues in the second quarter of 1997 were
$603.8  million,  14 percent higher than the  corresponding  1996 period,  while
sales  and other  operating  revenues  in the  first  six  months of 1997 were 7
percent higher than the same 1996 period.

         Phelps Dodge Mining Company recorded operating income of $142.4 million
in the 1997 second  quarter and $314.2  million in the first six months of 1997,
compared  with  $146.3  million  and $330.9  million in the  corresponding  1996
periods.  These decreases  reflected  higher copper  production  costs primarily
resulting from increased depreciation charges and reduced by-product credits for
gold.

         The  collective  bargaining   agreements  covering   approximately  625
employees  at Phelps  Dodge  Mining  Company's  Chino  operations  in New Mexico
expired on June 30, 1996.  As of August 7, 1997,  employees  who were covered by
the agreements have continued to work without a contract.
<PAGE>
                       RESULTS OF PHELPS DODGE INDUSTRIES

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

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

                                              Second Quarter    First Six Months
                                              --------------    ----------------
                                              1997     1996       1997    1996  
                                              ----     ----       ----    ----  
                                                                                
                                                         (in millions) 
                                                                                
Sales and other operating revenues:                                             
      Specialty chemicals----------------   $  106.4   109.9      215.1   222.3 
      Wheels and rims--------------------       87.1    81.1      168.6   163.9 
      Wire and cable---------------------      267.7   237.4      508.9   462.3 
                                            -------- -------    ------- ------- 
                                                                                
                                            $  461.2   428.4      892.6   848.5 
                                            ======== =======    ======= ======= 
                                                                                
                                                                                
                                                                                
                                                                                
Operating income:                                                               
      Specialty chemicals----------------   $   18.6    23.7       35.8    44.9 
      Wheels and rims--------------------       13.7    13.2       19.8    24.2 
      Wire and cable---------------------       27.6    23.2       49.6    45.4 
                                            -------- -------    ------- ------- 
                                                                                
                                            $   59.9    60.1      105.2   114.5 
                                            ======== =======    ======= ======= 
                                                                

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

         During  the 1997  second  quarter,  Phelps  Dodge  Industries  recorded
operating  income of $59.9 million,  compared with a record $60.1 million in the
corresponding 1996 period.  Operating income in the first six months of 1997 was
$105.2  million,  compared with $114.5  million in the first six months of 1996.
The strong second quarter earnings reflected increased sales volumes in the wire
and cable  business and continued  strength in the North  American wheel and rim
markets. The year-to-date  decrease in earnings reflected lower sales volumes of
specialty  chemicals in the European  markets and the effects of a strike at the
Corporation's  London,  Ontario,  wheel and rim plant which began on January 21,
1997, and was settled on March 15, 1997.

         The  collective   bargaining   agreement  covering   approximately  360
employees at Phelps Dodge Magnet Wire Company's  Hopkinsville,  Kentucky,  plant
expired on October 11, 1996. As of August 7, 1997, employees who were covered by
the agreement have continued to work without a contract.

                            OTHER MATTERS RELATING TO
                      THE STATEMENT OF CONSOLIDATED INCOME

         Miscellaneous  income and expense,  net,  increased by $12.8 million in
the second  quarter and $7.7  million in the first six months of 1997,  compared
with the corresponding  1996 periods.  These increases  principally  reflected a
1996  second  quarter  $7.1  million  foreign  exchange  loss from the effect on
working capital of the devaluation of the Venezuelan Bolivar, and a $6.0 million
pre-tax, non-cash gain in the 1997 second quarter from the exchange of shares of
a cost basis  investment  in a wire and cable  business  located in Greece.  The
year-to-date  increase  was  partially  offset  by a $3.4  million  decrease  in
dividends  received from the  Corporation's  13.9 percent  minority  interest in
Southern Peru Copper  Corporation.  The $7.1 million 1996 second quarter foreign
exchange loss from the  devaluation of the Bolivar was offset by an $8.0 million
interest  expense gain that  represented a  remeasurement  of  Venezuelan  local
currency debt after the devaluation.

                         CHANGES IN FINANCIAL CONDITION

         Capital outlays during the first six months of 1997 were $207.3 million
for Phelps Dodge Mining  Company  including  $108.3 million for the expansion of
the Corporation's  Candelaria  mining operations in Chile.  Capital outlays were
$72.6 million for Phelps Dodge Industries.  Capital outlays in the corresponding
1996 period  were  $136.4  million  for Phelps  Dodge  Mining  Company and $71.0
million for Phelps Dodge Industries. The Corporation expects capital outlays for
the year 1997 to be  approximately  $500 million for Phelps Dodge Mining Company
(including  approximately  $175 million for the Candelaria  expansion  project).
Phelps Dodge Industries is expected to spend  approximately  $200 million during
the year.

         At June 30,  1997,  the  Corporation's  total debt was $847.2  million,
compared with $659.3  million at year-end  1996.  Debt  increased as a result of
non-recourse  borrowings for the expansion of the Candelaria mine and borrowings
under the Corporation's  revolving credit agreement to support the Corporation's
capital expenditure and share purchase programs. The Corporation's ratio of debt
to total  capitalization  was 23.7 percent at June 30, 1997,  compared with 18.8
percent at December 31, 1996. For further information  concerning the Candelaria
borrowings and the Corporation's  revolving credit agreement that was amended in
the second quarter of 1997, please refer to Note 4 of the Consolidated Financial
Information.

         On June 10, 1997, the Corporation paid a regular quarterly  dividend of
50 cents per share on its common shares for the 1997 second  quarter;  the total
amount paid was $30.9  million,  bringing total 1997 dividends paid through June
30 to $63.2 million.  On June 25, 1997,  the board of directors  declared a 1997
third  quarter  regular  dividend  of 50 cents  per  common  share to be paid on
September 10, 1997, to shareholders of record at the close of business on August
20, 1997.

         On May 7, 1997, the  Corporation  announced that its board of directors
had  authorized  the  purchase  of up to an  additional  6 million of its common
shares,   approximately  10  percent  of  its  then  outstanding   shares.  This
authorization  follows a 5 million share purchase  program that was initiated in
March 1995 and extended to 10 million shares in March 1996.  Under that program,
9.9 million shares were purchased by the Corporation.  In 1997 through August 7,
the Corporation purchased a total of 4.8 million of its common shares at a total
cost of $370.5 million, including 1.8 million shares at a cost of $151.9 million
under the new 6 million share  authorization.  An additional  4.2 million shares
remain  authorized for purchase  under the new program.  There were 61.1 million
common shares outstanding on June 30, 1997.
<PAGE>
                           Part II. Other Information

Item 1.  Legal Proceedings
--------------------------

         I. Reference is made to Paragraph II, section  A.2.(a) of Item 3, Legal
Proceedings of the Corporation's Form 10-K for the year ended December 31, 1996,
and to paragraph I of Item 1, Legal Proceedings of the  Corporation's  Form 10-Q
for the quarter ended March 31, 1997,  regarding In re the General  Adjudication
of All Rights to Use Water in the Gila River  System and Source,  Nos. W-1 (Salt
River),  W-2 (Verde River), W-3 (Gila River) and W-4 (San Pedro River) (Superior
Court of Arizona, Maricopa County).

         On May 12, 1997,  the San Carlos  Apache  Tribe filed a complaint  (the
"Complaint")  in San Carlos  Apache  Tribal  Court naming the  Corporation  as a
defendant  (the "Tribal  Court  Action").  The  Complaint  alleges,  among other
things,  that a  right-of-way  permit issued by the Secretary of the Interior in
1944 and relied upon by the  Corporation  in  transporting  water from the Black
River across the San Carlos Apache  reservation  to Morenci was void when issued
or has expired. The Complaint seeks declaratory and injunctive relief, including
eviction of the  Corporation  from the  reservation,  and  requests  substantial
damages  based on,  among other  things,  production  and profits of the Morenci
mine. The Corporation  believes that the right-of-way was validly issued and has
at no point expired and that the Corporation's presence on the reservation lands
has been lawful.

         In June 1997,  federal  legislation  (Public Law No. 105 18, sec. 5003,
the  "Legislation")  was adopted which amends the San Carlos Apache Water Rights
Settlement  Act of 1992 and provides for  dismissal of the Tribal Court  Action.
The  Corporation's   time  to  respond  to  the  Complaint  has  been  adjourned
indefinitely  and  under  the  Legislation,  the  Tribal  Court  Action  must be
dismissed by August 22, 1997.  The  Legislation  does not address any  potential
claims by the Tribe  relating  to the  Corporation's  historical  occupancy  and
operation of its pump station on the Black River and related facilities but does
require that any such claims be brought,  if at all,  exclusively  in the United
States District Court.

         On July 23, 1997, as contemplated by the Legislation,  personnel of the
Federal Bureau of Reclamation  officially  assumed  operation of the Black River
facilities   and  the   Corporation's   personnel   vacated   the   reservation.
Responsibility  for  operation  of the Black  River  pump  station  and  related
facilities  is to be  transferred  to the Tribe by  December  31,  1998,  upon a
finding  by the  United  States  that the  Tribe is  qualified  to  operate  the
facilities.  With the approval of the Secretary of the  Interior,  the Tribe may
contract  with third  parties for the  operation of the  facilities.  During the
period prior to the transfer of operation of such  facilities  to the Tribe (the
"Interim Period"), the Corporation is entitled to receive up to 14,000 acre feet
of water per year (subject to certain  limitations) from Black River. During the
Interim  Period,  the  Corporation  shall pay a monthly  fee and  reimburse  the
Bureau's operating costs of the Black River facilities.

         Following the Interim  Period,  the Tribe will lease to the Corporation
14,000  acre feet of water per year  (subject  to certain  limitations)  under a
lease having a term of 50 years  subject to a 50 year  extension  (or to earlier
termination  if  mining  activities  cease at the  Morenci  mine  complex).  The
Corporation  will make an initial  one-time  payment  of $5 million  and make an
annual payment on an ongoing basis of approximately  $640,000 per year,  subject
to  inflation  adjustment  and the  amount  of  water  actually  delivered.  The
Corporation  will also advance funds sufficient to cover the reasonable costs of
the  operation of the Black River  facilities  and pay certain  monthly fees and
other charges.

         In addition, the Legislation also provides that the Corporation,  for a
monthly  fee,  may  transport  water from the  Corporation's  Upper  Eagle Creek
wellfields  across the  Tribe's  reservation.  The amount  pumped from the Upper
Eagle Creek  wellfield,  in  combination  with the water received from the Black
River  facilities,  may not  exceed  22,000  acre feet  annually.  The rights of
landholders to pump percolating groundwater, such as the Corporation's rights to
pump water from the Upper Eagle Creek  wellfields,  are subject to determination
under the  general  adjudication  proceeding  pending in the  Superior  Court of
Arizona.

         Management  believes  that the water  available  under the  arrangement
prescribed by the Legislation,  along with other available water supplies,  will
be adequate for the needs of the Morenci mine.
<PAGE>
Item 4.  Submission of Matters to a Vote of Security Holders
------------------------------------------------------------

         The  Corporation's  annual  meeting was held on May 7, 1997. A total of
54,042,107  common  shares,  or about 84 percent  of the issued and  outstanding
common shares of the  Corporation,  were  represented at the meeting.  Set forth
below is a description of the matters voted upon at the meeting and a summary of
the voting regarding each matter:

                                                            For         Withheld
                                                            ---         --------
Election of Directors:

      Robert N. Burt                                      53,835,117     206,990

      Robert D. Krebs                                     53,839,184     202,923

      Douglas C. Yearley                                  53,830,017     212,090


                                                For          Against     Abstain
                                                ---          -------     -------
Appointment of Auditors                     53,892,119        56,222      93,766

Proposal to approve an amendment
      to the 1993 Stock Option and
      Restricted Stock Plan                 52,413,148     1,433,865     195,094

Proposal to amend the Registrant's
      Certificate of Incorporation to
      increase the number of authorized
      common shares                         46,904,944     6,992,729     144,434

Proposal to amend the Registrant's
      Certificate of Incorporation to
      decrease the maximum size of the
      Registrant's Board of Directors       53,661,619       259,065     121,423

         There were no broker non-votes  included in the results of the election
of directors listed above, or the appointment of auditors, amendment to the 1993
Stock  Option  and  Restricted   Stock  Plan,  or  the  two  amendments  to  the
Registrant's Certificate of Incorporation.


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 June 30, 1997.
<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:  August 12, 1997                       By:      Gregory W. Stevens
                                                      ------------------
                                                      Gregory W. Stevens
                                                  Vice President and Controller
                                                  (Principal Accounting Officer)
<PAGE>
                    PHELPS DODGE CORPORATION AND SUBSIDIARIES

                                Index to Exhibits
                                -----------------



3.1      Certificate of Amendment of the Restated  Certificate of  Incorporation
         effective June 19, 1997 (SEC File No. 1-82). Complete composite copy of
         the Certificate of  Incorporation of the Corporation as amended to date
         (incorporated  by  reference to exhibit 3.1 to the  Corporation's  1992
         Form 10-K (SEC File No. 1-82)).

3.2      By-Laws of the Corporation, as amended, effective May 7, 1997 (SEC File
         No. 1-82).

4.2      Second  Amended and  Restated  Credit  Agreement,  dated as of June 25,
         1997,   among  the   Corporation,   several  banks  and  other  lending
         institutions,  and The Chase  Manhattan Bank, as  administrative  agent
         (SEC File No. 1-82).

10.5     Deferred  Compensation  Plan  for  the  Directors  of the  Corporation,
         amended and restated as of June 25, 1997,  effective September 30, 1997
         (SEC File No. 1-82).

10.15    Amendment to the  Corporation's  1993 Stock Option and Restricted Stock
         Plan (the 1993 Plan), effective May 7, 1997 (SEC File No. 1-82).

12       Computation of ratios of total debt to total capitalization.

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