Freeport cranks up copper output as rivals scour for deals to grow
World's top copper producer focuses on expanding current assets
Leaching copper to cost a third less than hard rock mining
Leaching to boost output by 800 million pounds annually as soon as 2027
Expansion projects in U.S., Indonesia, Chile to add over 1 bln pounds annually
Freeport's stock up 30% as investors back expansion plans
By Ernest Scheyder
Sept 29 (Reuters) - Freeport-McMoRan FCX.N is turbo-charging its copper output across three continents with no plans to join a buyout frenzy sweeping the mining industry, a strategy that analysts say positions the company well to capitalize on the clean energy transition's rising demand for the red metal.
Used widely across the global economy, copper is an ideal conductor of electricity and easily malleable, qualities that have made it widely popular for use in wiring, engines, construction equipment, electronics and other devices.
Global demand is poised tojump at least 60% by 2050, according to the International Energy Agency. Analysts at Jefferies JEF.N expect prices for the red metal to rise more than 40% in the next two years.
Yet new copper mines are proving difficult to develop, due in part to opposition from Indigenous groups, conservationists, local communities and others.
The difficult backdrop has pushed BHP BHP.AX, Rio Tinto RIO.AX, Glencore GLEN.L and other diversified miners of iron ore, nickel and other critical minerals tohunt for deals to boost their copper output even while balancingshareholders' expectations for payouts.
Phoenix-based Freeport has long focused primarily on copper - it produces 9% of global supplies, more than any other company - and now finds itself in the rare position of being able to concentrate on expanding mines it already owns and avoiding the distraction of a buyout.
"We're really, really focused on creating value from the assets that we have," Kathleen Quirk, who became Freeport's CEO in June, told Reuters ahead of the LME Week conference in London, one of the world's largest annual gatherings of mining executives. "I don't see Freeport as having to aggressively go out and have to overpay for things."
Freeport expects to produce 800 million pounds (362,874 metric tons) of copper annually as soon as 2027 by leaching the metal from piles of old waste rock at its U.S. mines previously thought to be worthless.
Drones and helicopters have been installing irrigation lines atop miles-long waste piles that release an acid solution to tease out low concentrations of copper.
The leached copper will cost a third less to produce than Freeport's hard rock mines - already some of the cheapest in the industry, according to analysts - and will not require a smelter for processing. Freeport estimates it would need to spend at least $10 billion on a new mine to mimic output from leaching.
"It's a huge opportunity for us and one that we're pursuing aggressively," Quirk said.
That leaching plan alone would produce nearly half the copper that Anglo American AAL.L - which BHP tried unsuccessfully to buy earlier this year - mined across the entire globe in 2023.
'STICK TO THEIR KNITTING'
Freeport has four other expansion projects underway that could add more than 1 billion pounds (453,592 metric tons) of copper annually to its production in coming years, including more than 500 million pounds (226,796 metric tons) annually by 2025 in the United States.
Another is in Indonesia, where it is expanding Grasberg, the world's second-largest copper mine. Freeport is also hoping to negotiate an extension of its mining rights beyond 2041 with the new Indonesian president, who takes office next month.
The company is preparing its application now to extend the license and Chairman Richard Adkerson - who led the last round of negotiations when he was CEO - plans to join the discussions, Quirk said.
"Indonesia is part of the fabric of our company as we've been working hard to improve the livelihood of the people, provide benefits to the government, all while providing returns on investments for our shareholders," she said. "I want to continue that positive relationship."
In Chile, Quirk said the regulatory climate has improved under President Gabriel Boric after a period of uncertainty fueled by an unsuccessful attemptto change the country's constitution last year.
"Chile is a more stable environment for investors now," said Quirk. An application to expand the El Abra mine, which counts state-owned Codelco as a minority partner, should by filed next year, she said.
Freeport's stock has risen 30% the past year as investors have warmed to the company's plans to expand existing operations. Seventeen of the 24 analysts that track Freeport's stock recommend buying it and none recommend selling, according to LSEG Workspace.
"Freeport is a workhorse in my portfolio," said Derek Bone of the Optica Rare Earths & Critical Materials ETF CRIT.P, which holds shares of Freeport. "I want them to stick to their knitting."
Quirk, who had been Adkerson's deputy for more than 20 years, is facing a challenge recruiting workers in the United States, where the company has moved as a resultto deploy autonomous trucks.
"I'm hoping that with everybody focused on our future economy and how it will require more use of metals, we'll get the best and brightest into our industry to help us," said Quirk.
That is top of mind for Freeport's customers, who are gobbling up more copper.
Nvidia NVDA.O, for example, said in March it would use copper cables for AI data centers - rather than fiber optic cables.
"That bodes well for copper demand over the longer term," said Steve Schoffstall of the Sprott Energy Transition Materials ETF SETM.O, which holds Freeport shares. "Companies like Freeport are in a good spot."
Reporting by Ernest Scheyder; Editing by Veronica Brown and Marguerita Choy
متعلقہ اثاثے
تازہ ترين خبريں
دستبرداری: XM Group کے ادارے ہماری آن لائن تجارت کی سہولت تک صرف عملدرآمد کی خدمت اور رسائی مہیا کرتے ہیں، کسی شخص کو ویب سائٹ پر یا اس کے ذریعے دستیاب کانٹینٹ کو دیکھنے اور/یا استعمال کرنے کی اجازت دیتا ہے، اس پر تبدیل یا توسیع کا ارادہ نہیں ہے ، اور نہ ہی یہ تبدیل ہوتا ہے یا اس پر وسعت کریں۔ اس طرح کی رسائی اور استعمال ہمیشہ مشروط ہوتا ہے: (i) شرائط و ضوابط؛ (ii) خطرہ انتباہات؛ اور (iii) مکمل دستبرداری۔ لہذا اس طرح کے مواد کو عام معلومات سے زیادہ کے طور پر فراہم کیا جاتا ہے۔ خاص طور پر، براہ کرم آگاہ رہیں کہ ہماری آن لائن تجارت کی سہولت کے مندرجات نہ تو کوئی درخواست ہے، اور نہ ہی فنانشل مارکیٹ میں کوئی لین دین داخل کرنے کی پیش کش ہے۔ کسی بھی فنانشل مارکیٹ میں تجارت میں آپ کے سرمائے کے لئے ایک خاص سطح کا خطرہ ہوتا ہے۔
ہماری آن لائن تجارتی سہولت پر شائع ہونے والے تمام مٹیریل کا مقصد صرف تعلیمی/معلوماتی مقاصد کے لئے ہے، اور اس میں شامل نہیں ہے — اور نہ ہی اسے فنانشل، سرمایہ کاری ٹیکس یا تجارتی مشورے اور سفارشات؛ یا ہماری تجارتی قیمتوں کا ریکارڈ؛ یا کسی بھی فنانشل انسٹرومنٹ میں لین دین کی پیشکش؛ یا اسکے لئے مانگ؛ یا غیر متنازعہ مالی تشہیرات پر مشتمل سمجھا جانا چاہئے۔
کوئی تھرڈ پارٹی کانٹینٹ، نیز XM کے ذریعہ تیار کردہ کانٹینٹ، جیسے: راۓ، خبریں، تحقیق، تجزیہ، قیمتیں اور دیگر معلومات یا اس ویب سائٹ پر مشتمل تھرڈ پارٹی کے سائٹس کے لنکس کو "جیسے ہے" کی بنیاد پر فراہم کیا جاتا ہے، عام مارکیٹ کی تفسیر کے طور پر، اور سرمایہ کاری کے مشورے کو تشکیل نہ دیں۔ اس حد تک کہ کسی بھی کانٹینٹ کو سرمایہ کاری کی تحقیقات کے طور پر سمجھا جاتا ہے، آپ کو نوٹ کرنا اور قبول کرنا ہوگا کہ یہ کانٹینٹ سرمایہ کاری کی تحقیق کی آزادی کو فروغ دینے کے لئے ڈیزائن کردہ قانونی تقاضوں کے مطابق نہیں ہے اور تیار نہیں کیا گیا ہے، اسی طرح، اس پر غور کیا جائے گا بطور متعلقہ قوانین اور ضوابط کے تحت مارکیٹنگ مواصلات۔ براہ کرم یقینی بنائیں کہ آپ غیر آزاد سرمایہ کاری سے متعلق ہماری اطلاع کو پڑھ اور سمجھ چکے ہیں۔ مذکورہ بالا معلومات کے بارے میں تحقیق اور رسک وارننگ ، جس تک رسائی یہاں حاصل کی جا سکتی ہے۔
