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Freeport-McMoRan (NYSE: FCX) cut its copper sales forecasts for this year and next while reaffirming the recovery timetable for its Grasberg operation in Indonesia.
Consolidated copper sales are projected to hit 3 billion lb. in 2026 and 3.7 billion lb. next year, Freeport said Tuesday in a statement. Those compare with 3.1 billion lb. and 3.8 billion lb., respectively, in a July forecast. The 2028 estimate remains 4.1 billion pounds.
Chief financial officer Maree Robertson attributed the 2026 reduction to slightly lower U.S. and Chilean production and the 2027 revision to updated mine plans, according to a transcript of the company’s quarterly analyst call.
Extreme weather reduced U.S. operating rates and productivity, while slope management restricted access to higher-grade ore at Chile’s El Abra mine, Freeport’s presentation showed. Cerro Verde in Peru performed above forecast.
Higher profit
Robertson made the comments after Freeport reported net income attributable to common shareholders of $1.17 billion (C$1.64 billion) in the third quarter, or 81¢ a diluted share, compared with $674 million, or 46¢, a year earlier. Revenue increased 8% to $7.55 billion, Freeport said in its release.
Adjusted earnings, a non-GAAP measure, were $1.28 billion, or a higher-than-expected 88¢ a share, after excluding $101 million in net charges. Operating cash flow rose to $1.98 billion from $1.69 billion.
The financial gains came despite copper sales falling to 749 million lb. from 977 million lb. a year earlier. Freeport’s realized copper price rose to $6.54 a lb. from $4.68. Quarterly copper production was 832 million lb., with inventories accounting for much of the gap between production and sales.
Freeport still expects about 100 million lb. of copper to remain in Indonesian smelter inventory at year-end. That deferral was already included in July’s outlook and is separate from the newly announced reductions.
Restart progress
Grasberg’s phased restart following a deadly September 2025 mudslide at the mine remains central to the projected rebound in output. Freeport expects the Indonesian operation to reach 80% of capacity by mid-2027 and approach full capacity by year-end.
Mining rates at the Grasberg Block Cave averaged about 70,000 tonnes a day in the third quarter, up from 53,000 tonnes in the second.
Material-handling upgrades remain on schedule for completion early next year, while preparations for restarting Production Block 1S are advancing toward mid-2027. Dry weather has helped mining but limited water availability has complicated efforts to raise milling rates, with the impact so far limited, Freeport said.
Grasberg’s restart is “progressing well,” BMO Capital Markets mining analyst Katja Jancic said Tuesday in a note. “Overall, we view the Grasberg ramp-up as increasingly de-risked.”
Rising costs
Cost pressures persist. Third-quarter unit net cash costs were $2.07 per lb. of copper, against $1.40 a year earlier, after by-product credits and excluding idle-facility, direct recovery and restoration costs. Freeport recorded $244 million of those excluded costs during the quarter.
Capital spending is now expected to hit $4.4 billion this year and $5.2 billion next year, compared with $4.3 billion and $4.8 billion in July. The 2027 increase mainly reflects additional U.S. mining equipment and inflation, Robertson said.
A decision on expanding Arizona’s Bagdad mine is expected this quarter, Freeport also said. Capital costs for a new concentrator, mining equipment and expanded infrastructure could reach about $4.5 billion, according to the company.
The expansion could add 200 million to 250 million lb. of copper annually. It would take three to four years to complete, Freeport said.