Freeport-McMoRan Eyes Grasberg Ramp-Up, U.S. Copper Growth From Leaching

Key Points

• Grasberg is ramping back up after a fatal underground incident, with Freeport targeting 65% of capacity in the second half of 2026, 80% by mid-2027 and near-full capacity by year-end 2027. A new Indonesian smelter also makes the company fully integrated locally.
• Freeport’s leaching technology could unlock copper from stockpiles containing an estimated 40 billion pounds of previously unrecoverable material, potentially increasing annual production from about 200 million pounds to 800 million pounds without conventional mine-development costs.
• The proposed Bagdad mine expansion and successful leaching deployment could raise Freeport’s U.S. copper production by roughly 60% over three to four years; the company is also seeking a potential $500 million annual benefit from including copper in the federal 45X tax credit.

Freeport-McMoRan NYSE: FCX is prioritizing the ramp-up of its Grasberg operations in Indonesia, potential U.S. production growth and an emerging leaching technology initiative that management believes could materially expand copper recovery from previously mined material.

Speaking at a Jefferies conference in New York, Chief Executive Officer Kathleen Quirk said the company is entering a period of growth supported by its large-scale, geographically diversified copper production base and embedded expansion opportunities. She said the company’s 2026 priorities include disciplined execution at Grasberg, advancing leaching technology and investing in technology and innovation to improve efficiency and lower costs.

Grasberg Recovery Progressing

Quirk said Freeport has made substantial progress in recovering from an unprecedented incident at the Grasberg Block Cave underground operation about a year earlier. The incident resulted in the deaths of seven coworkers, she said, and the company has completed an investigation and identified steps it will take to manage the related risks in the future.

Some operations restarted in October, followed by a larger restart in March. The company is proceeding with its planned ramp-up, Quirk said, targeting about 65% of overall capacity in the second half of the year, 80% by the middle of next year and nearly full capacity by the end of 2027.

Freeport modified its plan in April to add upgrades to the material-handling system. Quirk said the changes were intended to improve long-term efficiency rather than address a safety issue.

Dry weather in Indonesia has helped mining conditions since operations resumed, according to Quirk, although she emphasized that the company is designing systems to operate effectively in the region’s typically wet climate. She said management believes the incident is behind the company, while acknowledging that mining operations will continue to face operational challenges.

Freeport also recently started its new Indonesian copper smelter, adding to an existing smelter that has operated since the late 1990s. Quirk said the new facility makes the company fully integrated in Indonesia across mining and processing, reducing its reliance on third-party processing in other countries.

Leaching Initiative Targets Stockpile Recovery

A major area of potential growth involves recovering copper from material that was previously mined and placed in stockpiles, primarily in the United States. Quirk said Freeport estimates those stockpiles contain approximately 40 billion pounds of copper that was not considered recoverable using technology available decades ago.

The company has increased production from new leaching initiatives to roughly 200 million pounds annually and sees a potential path to 800 million pounds a year. Reaching that level will require further validation of the technology, Quirk said.

Freeport is testing additives intended to improve copper recovery and is also evaluating methods to increase temperatures within stockpiles. One additive is already being deployed, while two additional proprietary additives showing significant promise are expected to be available for further testing later this year and in early 2027.

Quirk said the opportunity could be especially meaningful because the material has already been mined and would not require the capital investment associated with conventional new copper production. The process also produces copper cathode directly and does not require a smelter, she said.

• Approximately 40 billion pounds of copper are contained in Freeport stockpiles, primarily in the U.S., according to Quirk.
• New leaching initiatives currently contribute about 200 million pounds of annual production.
• Freeport sees potential to increase that contribution to 800 million pounds annually, subject to further technology proof points.

U.S. Expansion and Policy Support

Quirk highlighted the strategic importance of Freeport’s U.S. operations, which she said account for 70% of refined copper produced in the country. The company operates mines in Arizona and New Mexico as well as primary molybdenum operations in Colorado.

She said Freeport’s U.S. assets provide significant leverage to copper prices because the company owns the assets and land, faces a comparatively favorable tax structure and has lower payments to governments and partners than it does in certain international operations.

The company expects to bring a proposed expansion at its Bagdad mine in northwest Arizona to its board for an investment decision before year-end. Quirk said the project could make Bagdad the second-largest copper mine in the U.S., behind Freeport’s Morenci mine, and would take about three years to construct if approved. She said the project is “shovel-ready” and does not require material permitting.

Freeport believes its leaching program and Bagdad expansion together could increase U.S. copper production by approximately 60% over three to four years, provided the leaching technology is successfully proven and the Bagdad project moves ahead.

Quirk also cited federal support for critical-mineral development, including potential incentives related to domestic processing. She said Freeport is pursuing inclusion of copper within Treasury regulations for the 45X tax credit, which could provide the company with a potential $500 million annual incentive if enacted. She noted that congressional action would be required.

Beyond growth investments, Quirk said Freeport’s capital-allocation framework directs 50% of discretionary cash toward projects and 50% toward shareholder returns.

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.

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