Freeport-McMoRan Copper And Gold Volumes Shine, CEO Touts China, India As Major Demand Driver

Freeport-McMoRan Inc. (NYSE:FCX) reported better-than-expected second-quarter results on Wednesday, driven by strong copper and gold sales volumes, lower costs, and favorable pricing. The company also marked a major operational milestone with the start-up of its new copper smelter in Indonesia.

The company posted adjusted earnings of 54 cents per share, beating the consensus estimate of 44 cents. Revenue was $7.58 billion, topping expectations of $7.09 billion.

Net income attributable to common stock totaled $772 million, or 53 cents per share, while adjusted net income was $790 million, or 54 cents, after excluding net charges of $18 million.

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Second-Quarter Production And Sales Volumes

• Copper production totaled 963 million pounds, with sales of 1.0 billion pounds
• Gold production was 317,000 ounces, with sales of 522,000 ounces
• Molybdenum production and sales both totaled 22 million pounds

All sales volumes exceeded Freeport’s April 2025 guidance. Higher U.S. milling rates and refined gold sales timing helped offset weaker ore grades in Indonesia and South America.

During the period, average realized prices stood at $4.54 per pound for copper, $3,291 per ounce for gold, and $21.10 per pound for molybdenum.

Unit net cash costs for copper averaged $1.13 per pound, well below guidance of $1.50 and down from $1.73 a year earlier, primarily due to stronger by-product credits and higher copper sales.

Tariffs And Market Premiums

Freeport said that the recently announced U.S. tariffs on copper imports, set to take effect on August 1, had not yet significantly impacted Q2 costs. However, the company warned that supplier pass-throughs could increase input costs by roughly 5%.

Following the July tariff announcement, COMEX copper prices surged to a 28% premium over LME, potentially enhancing Freeport’s domestic sales margins. The company estimates that each $0.10 increase in the COMEX premium over LME could boost second-half 2025 cash flows by $70 million.

Freeport launched start-up activities at its new Indonesian smelter in May and expects to produce first copper cathode in July. The company continues to invest in innovative copper leaching and organic growth projects across its portfolio.

Capital expenditures for the quarter totaled $1.3 billion, including $600 million for major mining projects and $300 million for PT Freeport Indonesia’s downstream facilities. Full-year capital spending is expected to total $4.9 billion.

Freeport repurchased 1.5 million shares during the quarter at an average price of $33.94, bringing its year-to-date total to 2.9 million shares for $107 million.

As of June 30, Freeport-McMoRan held $4.5 billion in cash and equivalents, with total debt of $9.3 billion and net debt of $1.5 billion, excluding $3.2 billion related to its Indonesian downstream facilities.

The company also had $3 billion available under its corporate revolving credit facility and $1.85 billion in combined credit availability at its PT Freeport Indonesia and Cerro Verde operations.

“As a leading copper producer, our role is increasingly important in providing essential metals to a growing market,” stated President and CEO Kathleen Quirk. “We are well positioned for the future, both domestically, as America’s copper champion, and internationally with large-scale production, a strong balance sheet, and a portfolio of attractive growth opportunities.”

2025 Outlook

• Full-year sales are expected to reach 3.95 billion pounds of copper, 1.3 million ounces of gold, and 82 million pounds of molybdenum.
• Q3 sales guidance: 1.0 billion pounds of copper, 350,000 ounces of gold, and 18 million pounds of molybdenum
• Full-year unit net cash costs: projected at $1.55 per pound of copper

Operating cash flows are projected to be approximately $7.0 billion for the full year, or $7.9 billion, including the projected $1.25 per pound premium on U.S. copper sales in the second half of 2025.

Key Takeaways From Earnings Call

Quirk addressed the impending 50% U.S. copper tariff, stating the company is awaiting further details and is unaware of any exemptions. While Q2 costs were not significantly impacted, future tariffs could increase U.S. purchase costs by approximately 5%.

Regarding Indonesian copper, the company anticipates continuing to primarily sell in Asia in the near term, but will evaluate the feasibility of shipping to the United States. Expanding the Miami, Arizona copper smelter is under consideration, though building a new U.S. smelter is deemed “very challenging.”

Chairman Richard Adkerson expressed satisfaction with the recent Indonesia-United States trade agreement, while Quirk highlighted China’s continued role as a major copper demand driver and identified India as an important growth market.

Price Action: FCX shares are trading lower by 0.74% at $45.50 at the last check on Wednesday.

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