Freeport-McMoRan (NYSE:FCX) is pursuing growth through U.S. brownfield expansions, technology investments and the recovery of its Grasberg mine in Indonesia, President and CEO Kathleen Quirk said during a Morgan Stanley conference discussion.
Quirk said copper remains the company’s central focus as electrification and related power and energy infrastructure increase demand for the metal. She said the industry faces a constrained supply outlook because major new copper discoveries are rare and greenfield projects can take roughly two decades to develop.
Leaching Technology Targets Stockpile Copper
A major element of Freeport’s strategy is expanding copper recovery from previously mined material through leaching technology. Quirk said historical leaching methods may have recovered only about 30% of the copper in ore, while the company is working with new operational techniques, chemical additives and heat to improve recoveries.
Freeport currently produces roughly 200 million pounds annually through its leaching initiative and is targeting a run rate of about 300 million pounds by the end of the year. Quirk said that 300 million-pound level is included in the company’s guidance for next year, while larger gains remain dependent on field results.
The company has two additional chemical additives that showed stronger recovery potential in laboratory testing, Quirk said. Those materials are being manufactured and are expected to arrive late this year and early next year for field deployment. Freeport is also testing heated solutions for injection into stockpiles, based on its view that copper reacts more favorably at higher temperatures.
Quirk said Freeport has about 40 billion pounds of copper in above-ground stockpiles. The company believes the combination of additives and heating could potentially lift annual leach production from 200 million pounds to 800 million pounds over a three- to four-year period, though she stressed that the technology must first be proven in the field.
Because the material has already been mined, Quirk said the incremental cost of producing the first 200 million pounds has been less than $1 per pound. Freeport’s U.S. operations have higher average costs than its international operations because of lower grades and more mature assets, she said. The company has targeted U.S. costs in the $2.50-per-pound range, compared with roughly $3 per pound currently, although energy, diesel, sulfuric acid and supply costs have created headwinds.
Bagdad Expansion Approaches Board Review
Quirk also highlighted a potential brownfield expansion at Freeport’s Bagdad mine in Arizona. The mine, which has operated since the 1940s, has reserves that have grown beyond current processing capacity, she said.
The expansion requires a copper price of at least $4 per pound to earn the company’s cost of capital, according to Quirk. Freeport has been evaluating capital-cost inflation, labor availability and construction approaches, including potentially building some components off-site.
Bagdad recently converted its haul-truck fleet to autonomous operations, Quirk said, marking Freeport’s first U.S. site to adopt the technology. The company plans to present its expansion plan to the board later this year and hopes for a positive final investment decision by year-end. If completed, Quirk said the expanded mine would become the second-largest copper mine in the United States and would benefit from greater operating scale.
Grasberg Recovery and Indonesian Smelters
In Indonesia, Freeport is recovering from an unprecedented mud rush incident at its Grasberg mine around this time last year. Quirk said the company investigated the event, implemented remedial actions and restarted production first in smaller areas before increasing output at the Grasberg Block Cave earlier this year.
Freeport expects Grasberg to operate at roughly 65% of capacity in the second half of the year and to return to full capacity by the end of 2027. The company is upgrading its materials-handling and rail infrastructure to support operations under varying ore and weather conditions.
Quirk said dry conditions in Indonesia have made mining easier, but have not changed the company’s ramp-up plan. Grasberg produces high-grade copper and gold and has an attractive cost structure, she said.
Freeport has also restarted its newer Indonesian smelter and is now operating two smelters in the country. Quirk said an operational challenge at one smelter had been resolved and the newer facility is proceeding through its startup process.
Tariffs and Capital Allocation
On U.S. copper tariffs, Quirk said no government decision has been made regarding potential Section 232 tariffs on copper cathodes. She noted that downstream copper products already face tariffs of as much as 50%, while a prior Commerce recommendation called for a 15% tariff on cathodes beginning in January 2027 and 30% in 2028. That recommendation has not been finalized, she said.
Freeport is currently balanced in U.S. mining and smelting capacity, Quirk said. If the Bagdad expansion moves ahead, the company will evaluate whether additional domestic smelting capacity is warranted as part of an integrated mining, processing and sulfuric-acid system.
Quirk said Freeport’s capital-allocation framework calls for half of available discretionary cash flow to be returned to shareholders and half to be invested in profitable growth. The company has paid a base and special dividend and has restarted share repurchases, while also seeking to fund future projects.
About Freeport-McMoRan (NYSE:FCX)
Freeport-McMoRan Inc is a global mining company focused primarily on the exploration, development and production of copper, gold and molybdenum. Copper is its principal product and is used in electrical wiring, construction, transportation, industrial equipment and renewable-energy technologies. The company also produces gold as a byproduct of its copper operations and molybdenum, an alloying metal used in steelmaking and other industrial applications.
Freeport-McMoRan operates major mining and processing assets in North America, South America and Indonesia.
