Freeport-McMoRan Inc.
Analysis
Freeport's growth story has moved home: low-cost leach copper and a bigger Bagdad mine now carry the volume plan, while Grasberg recovers from last year's mudflow more slowly than planned. The copper keeps arriving after the money that buys it. How much of FCX's 800 million pound leach target rests on additives not yet deployed?
- The U.S. mines are now the profit engine.
U.S. mining operating income was 2.4 times last year's first half, with Morenci rates 30% above their five-year average; management calls the U.S. its biggest earner. The cheapest near-term pounds are there too. How does FCX's U.S. cost per pound compare with its South American mines?
- Grasberg is coming back, on a longer clock.
Block cave output doubled by June, but wet ore forced new equipment onto the loading chutes, so the ramp stays near 60,000 tonnes a day and full capacity waits until late 2027. The metal is deferred, not lost. How much copper has FCX deferred from Grasberg into 2027 and 2028?
- The next wave of growth keeps getting more expensive.
Bagdad's price tag rose to about $4.5 billion, 30% above the 2023 plan, and the U.S. cost target of $2.50 a pound is now out of reach for 2027 on diesel and acid prices. Costs climb faster than the new copper arrives.
- Grasberg reaches full capacity by the end of 2027 as planned. Its return brings back the volumes and rock-bottom costs the rest of the business was built around.
- The leach initiative keeps scaling toward its long-term target. Those pounds come from rock already mined, so they add copper at very low cost and lift profit on every pound sold.
- Bagdad is approved and paid for out of cash flow. Building it from cash rather than borrowing keeps the dividend and buyback running while the mine goes up.
- The chute upgrades at Grasberg slip past mid-2027. Every month the fix is late keeps the mine at half rate, and the copper it should be producing stays in the ground.
- Diesel and acid stay expensive and U.S. costs stay near $3 a pound. It leaves the U.S. mines earning less per pound than planned and less cash to fund the growth they are promising.
- Bagdad and El Abra both get built at the same time. Two huge building bills land together, so more of the cash that funds dividends and buybacks goes into construction.
| Politician | Transaction | Amount | Traded | Filed |
|---|---|---|---|---|
Donald Trump Republican · Executive | Purchase | ≥$1K | May 18 | Jul 1 |
Donald Trump Republican · Executive | Purchase | ≥$15K | Mar 23 | May 13 |
Donald Trump Republican · Executive | Purchase | ≥$15K | Mar 11 | May 13 |
Ro Khanna Democratic · House · CA-17 | Purchase | ≥$1K | Aug 3 | Sep 4 |
Ro Khanna Democratic · House · CA-17 | Sale | ≥$1K | Aug 10 | Sep 4 |
Congressional trading data provided by QuiverQuant
How Freeport-McMoRan turned $25.9B of revenue into $6.5B of operating income.
| Revenue | ||
|---|---|---|
| Copper Cathode | $8.1B | ▼ 2.03% YoY |
| Copper In Concentrates | $6.3B | ▼ 6.18% YoY |
| Refined Copper Products | $4.4B | ▲ 14.75% YoY |
| Gold | $3.9B | ▼ 12.28% YoY |
| Molybdenum | $2.0B | ▲ 9.16% YoY |
| Other Products Or Services | $749.0M | ▲ 18.70% YoY |
| Purchased Copper | $449.0M | ▼ 35.21% YoY |
| Total revenue | $25.9B | |
| Gross profit | $7.3B | 28.2% |
| Operating income | $6.5B | 25.2% |