Freeport-McMoRan Q2 Earnings Call Highlights

Key Points

• Second-quarter results topped expectations as Freeport-McMoRan reported better-than-forecast copper sales and unit cash costs, with stronger U.S. operations and a continuing recovery at the Grasberg mine helping margins, cash flow and earnings.
• Grasberg remains the key growth driver for 2026, with production rates doubling in the quarter and the company targeting a further ramp-up through 2027 while also pursuing a life-of-resource operating-rights extension in Indonesia.
• Freeport is advancing multiple growth projects, including a near-term investment decision on the Bagdad expansion in Arizona, regulatory progress at El Abra in Chile and ongoing leaching and equipment upgrades across its U.S. assets.

Freeport-McMoRan NYSE: FCX executives said the copper producer’s second-quarter 2026 results reflected “progress” across its major operating regions, citing better-than-forecast copper sales and unit cash costs, a continuing recovery at the Grasberg Block Cave mine in Indonesia and stronger performance from U.S. operations.

Richard Adkerson, Freeport-McMoRan’s chairman of the board, said the company continues to benefit from its long-standing focus on copper and its portfolio of long-lived assets. “Electricity means copper,” Adkerson said, adding that the company is positioned to grow as global electrification increases copper demand.

President and Chief Executive Officer Kathleen Quirk said second-quarter copper sales and unit cash costs exceeded the company’s forecast. She also said favorable metal prices supported “significant margins, cash flows, and earnings.” For the first half of 2026, Quirk said Freeport-McMoRan’s U.S. mining operations contributed 2.4 times more operating income than in the prior-year period, while consolidated net income rose 65% from the first half of 2025.

The company returned $600 million to shareholders in the first half of the year, including roughly $200 million through share repurchases. Quirk also said Freeport-McMoRan increased its ownership in Cerro Verde through open-market purchases, bringing total purchases over roughly two years to more than $300 million and increasing its ownership by 2 percentage points to more than 55%.

Grasberg Ramp-Up Remains Central to 2026 Outlook

Executives highlighted the ongoing ramp-up of the Grasberg Block Cave mine as a major operating priority. Quirk said production rates at the mine doubled during the quarter, rising from an average of 34,000 tons per day in April to 69,000 tons per day in June.

Freeport-McMoRan continues to target overall rates in the Grasberg district at approximately 65% of full capacity in the second half of 2026, rising to 80% by mid-2027 and approaching full capacity by the end of 2027. Quirk said upgrades to the material handling system for the automated rail system are progressing on schedule, and the company is advancing work to restart Production Block One South in 2027.

Mark Johnson, president and chief operating officer of Freeport-McMoRan Indonesia, said the company is installing new technology in chute galleries and pursuing risk mitigation initiatives, including drilling and drainage work related to the old pit bottom.

Freeport-McMoRan also submitted a formal application in June to extend its operating rights in Indonesia for the life of the resource, following a memorandum of understanding with the Indonesian government earlier this year. Quirk said the company is working through the regulatory process and aims to complete the extension this year, though there is no prescribed timeline. Adkerson said recent meetings with Indonesian officials were positive and that the extension would benefit shareholders, the government, workers and local communities.

U.S. Operations Show Higher Mining Rates

In the U.S., Quirk said the company is making “important and tangible progress” in increasing mining and processing rates. At Morenci, second-quarter mining rates were 30% higher than the average achieved over the past five years. Quirk said sustaining those higher rates should translate into improved copper production over time.

Cory Stevens, president and chief operating officer for the Americas, said the company has focused on people, process and technology to improve equipment reliability and mine performance. He said Freeport-McMoRan is also transitioning trucks at Morenci to higher-capacity 400-ton ultra-class trucks, with additional trucks planned next year.

The company continues to pursue its leaching initiative, which is aimed at increasing copper recovery from existing stockpiles. Quirk said Freeport-McMoRan is currently producing around 200 million pounds annually from these efforts and is targeting a 300 million-pound run rate by the end of 2026. Longer term, the company has described a potential path to 800 million pounds per year.

Stevens said early results from the company’s first-generation leach additives have been better than expected, and additional additive tests are planned at Morenci, New Mexico and El Abra. Freeport-McMoRan is also testing heated leaching solutions at Morenci and El Abra.

Growth Projects Advance in Arizona, Chile and Indonesia

Quirk said Freeport-McMoRan is nearing an investment decision on a major expansion of its Bagdad mine in Arizona. The project would more than double production at Bagdad and make it the second-largest copper mine in the U.S. behind Morenci, according to Quirk.

The company is finalizing capital cost estimates and expects to seek board approval in the second half of 2026. Preliminary indications based on current market conditions point to capital of about $4.5 billion, approximately 30% above a 2023 estimate. Quirk attributed the increase to commodity and labor escalation, revisions to project scope and updated engineering estimates. She said the project remains supported at a $4 per pound copper price, below current market levels.

Freeport-McMoRan is also advancing regulatory work for a major expansion at El Abra in Chile, where it partners with Codelco. Quirk said the Chilean government is engaged in the review process following the company’s environmental impact study submission in March. The company is also studying expansion and development options in the Safford Lone Star District in the U.S. and continuing development of the Kucing Liar project in Indonesia.

Financial Outlook Reflects Higher Volumes Ahead

Chief Financial Officer Maree Robertson said Freeport-McMoRan’s three-year outlook for copper, gold and molybdenum sales remains broadly consistent with April estimates. The company expects second-half 2026 copper sales to be more than 20% higher than the first half, while gold sales are expected to be more than 65% higher.

For 2027, Robertson said annual copper sales are expected to increase by more than 20% compared with 2026, while gold volumes are expected to rise by more than 50%. Additional growth is projected in 2028.

Robertson said the company now estimates 2026 average unit net cash costs at approximately $1.90 per pound, slightly below the April estimate of $1.95 per pound, as higher by-product credits more than offset other cost increases. She noted that oil, sulfur and acid markets remain volatile.

Freeport-McMoRan’s modeled outlook shows annual EBITDA ranging from approximately $13 billion at $5 per pound copper to $20 billion at $7 per pound copper, using average 2027 and 2028 volume and cost estimates and assuming gold at $4,000 per ounce and molybdenum at $30 per pound. Robertson said each $0.10 per pound move in copper equates to about $390 million in annual EBITDA during that period.

Capital expenditures for 2026 remain consistent with the prior forecast, while 2027 capital is now estimated at $4.8 billion, about $300 million higher than the April estimate. Robertson said the increase reflects investments in upgraded mining equipment and revised cost estimates. The forecast excludes major projects still subject to final studies and board approval, including the Bagdad expansion.

Robertson said Freeport-McMoRan’s financial policy remains focused on maintaining a strong balance sheet, returning cash to shareholders and investing in value-enhancing growth projects. Since adopting the policy in 2021, she said the company has distributed $6.3 billion to shareholders through dividends and share purchases.

About Freeport-McMoRan (NYSE:FCX)

Freeport-McMoRan Inc is a U.S.-based natural resources company primarily engaged in the exploration, mining and processing of copper, gold and molybdenum. Its operations encompass large-scale open-pit and underground mining as well as associated concentrator and milling facilities. The company produces copper in the form of concentrates and cathodes, and also recovers gold and molybdenum as co-products; its business model includes exploration, development, mining, beneficiation and the sale of bulk commodities to smelters and industrial customers.

Freeport-McMoRan conducts operations and development activities across multiple geographies, with substantial assets in the Americas and Indonesia.

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