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    FCX
    Earnings call· Dec 2025(Q4 FY25)

    FREEPORT-MCMORAN INC FCX

    Jan 22, 2026 Source

    Executive summary

    Freeport-McMoRan Q4 FY25 — Grasberg Recovery and U.S. Leach Opportunity Drive Optimism

    Freeport-McMoRan reported strong Q4 FY25 results, driven by robust copper prices and the resilience of its Americas business, despite the Grasberg incident which impacted annual volumes. The company is making significant progress on the phased restart of the Grasberg Block Cave, targeting 85% production restoration by H2 2026, and is advancing innovative leach initiatives in the U.S. to scale production to 800 million pounds per annum by 2030. Management expressed confidence in future value creation through organic growth projects and disciplined capital allocation.

    Highlights

    5

    • Consolidated unit net cash cost for FY25 was $1.65 per pound, within 3% of guidance despite the Grasberg incident.

    • Adjusted EBITDA for FY25 was nearly $10 billion, similar to 2024 levels.

    • U.S. business operating income was 3.5x the level of Q4 FY24 due to strong copper prices.

    • Targeting a 40% increase in leach production in 2026, on path to 800 million pounds per annum.

    • Reserve additions in 2025 substantially exceeded production, including over 17 billion pounds of copper for the El Abra project.

    Concerns

    3

    • The Grasberg incident impacted annual copper volumes by approximately 10% compared to the original plan for 2025.

    • Unit cash costs in South America are forecasted to be higher at $2.58 per pound for 2026, similar to Q4 FY25 levels.

    • The autonomous haul truck fleet at the Bagdad mine is not yet achieving expected performance.

    Guidance & targets

    19
    CategoryTargetConfidence
    U.S. volumes increase
    8% increase
    medium materiality
    High
    Grasberg Block Cave restart
    Second quarter 2026 start-up
    high materiality
    High
    Grasberg production restoration
    85% of production restored
    high materiality
    High
    Quarterly copper sales run rate
    Approximately 1 billion pounds per quarter
    medium materiality
    High
    Consolidated unit net cash costs
    $1.75 per pound
    high materiality
    High
    Consolidated unit net cash costs (H2)
    Approximating $1.25 per pound
    medium materiality
    High
    Annual EBITDA (modeled)
    $11 billion to $19 billion per annum
    high materiality
    High
    Operating cash flow (modeled)
    $8 billion to $14 billion per year
    high materiality
    High
    Capital expenditures
    $4.3 billion to $4.5 billion per year
    high materiality
    High
    Discretionary capital expenditures
    $1.6 billion to $1.7 billion per year
    medium materiality
    High
    Leach production
    300 million pounds
    high materiality
    High
    Leach production
    400 million pounds
    high materiality
    Medium
    Leach production
    800 million pounds
    high materiality
    Medium
    Bagdad expansion investment decision
    Targeted in the second half of the year
    high materiality
    High
    U.S. copper production increase
    Over 50% increase
    high materiality
    Medium
    South America production levels
    Stable production levels at Cerro Verde and some growth at El Abra
    medium materiality
    High
    South America unit net cash costs
    Similar level in 2026
    medium materiality
    High
    U.S. unit cash cost target
    $2.50 a pound
    high materiality
    Medium
    El Abra environmental impact statement submission
    Submit in the first half of this year
    medium materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    U.S.
    Production was up 5% versus both the year-ago fourth quarter and for the full year 2025 versus 2024, despite low grades. Operating income was 3.5x the level of Q4 FY24 due to strong copper prices. The company is targeting an 8% increase in volumes for 2026, partly from leach recovery initiatives, and sees potential for over 50% increase in copper production over the next 4-5 years.
    Production growth FY25 vs FY24: 5%Targeted volume increase FY26: 8%Refined copper supplied to U.S. market: 70%Copper production potential increase (next 4-5 years): >50%
    		—5%—3.5x Q4 FY24 operating income
    South America
    Performance was in line with expectations, with Cerro Verde delivering another solid year. Copper sales for FY25 totaled 1.1 billion pounds, with similar sales expected for FY26. Unit net cash costs for Q4 FY25 averaged $2.57 per pound, with a similar level expected for 2026, primarily due to labor and energy costs. Stable production is expected at Cerro Verde and some growth at El Abra, where 17 billion pounds of copper were added to reserves.
    Copper sales FY25: 1.1 billion poundsCopper sales FY26: similar amountUnit net cash costs Q4 FY25: $2.57 per poundUnit net cash costs FY26 forecast: $2.58 per poundEl Abra reserves added: 17 billion pounds copper
    		————
    Indonesia
    Operations resumed on a limited basis from Deep MLZ and Big Gossan mines in Q4 2025. Sales for Q4 exceeded production by 60 million pounds of copper due to timing. The Grasberg Block Cave is on track for a Q2 2026 start-up, with 85% of district production expected to be restored in H2 2026. The new smelter remains in standby with an expected restart later in 2026. Kucing Liar rates are increasing from 90,000 to 130,000 tons/day to optimize the production profile.
    Q4 sales vs production: exceeded by 60 million pounds copperGrasberg Block Cave restart: Q2 2026Production restoration (Grasberg district): 85% by H2 2026Kucing Liar rates increase: from 90,000 to 130,000 tons/day
    		————

    Operational metrics

    13
    Leach production
    200 million pounds
    FY25

    Production from the innovative leach initiative in 2025.

    Leach production
    300 million poundsTargeting 40% increase from 2025
    FY26

    Target for leach production in 2026.

    Leach production
    400 million pounds
    FY27

    Target for leach production in 2027.

    Leach production
    800 million pounds
    FY30

    Target for leach production by 2030.

    Adjusted EBITDA
    Nearly $10 billionSimilar to 2024 levels
    FY25

    Adjusted EBITDA for the full year 2025.

    Copper price (LME)
    $3.87-$5.68
    FY25

    LME copper price range and average during 2025.

    Copper price (LME)
    Approximately 30% highervs 2025 average
    Current

    Current LME copper prices compared to the 2025 average.

    Copper demand growth rate
    2.9%
    Through 2040

    Projected long-term annual growth rate in copper demand.

    Copper price sensitivity
    $415 millionper $0.10/lb change
    Annual

    Impact of copper price changes on annual EBITDA.

    Gold price sensitivity
    $120 millionper $100/oz change
    Annual

    Impact of gold price changes on annual EBITDA.

    Shareholder distributions
    $5.7 billion
    Cumulative

    Total distributions to shareholders.

    Grasberg underground losses insurance coverage
    $700 million
    Policy

    Maximum coverage for underground losses under property and business interruption insurance.

    Kucing Liar operating rates
    130,000 tons per dayvs 90,000 tons per day projected
    Future

    Increased operating rates for Kucing Liar to optimize production profile and defer pyrite handling capital.

    Industry KPIs

    7
    MetricValueDetails
    Safety—
    Unit cash cost$1.65per pound
    By product credits—
    Reserve life new supply—
    Growth project CAPEX first production$150 millionUSD
    Ore grade recovery drilling by deposit—
    Production sales volume by metal and by mine5%%

    Capital programs

    4
    Bagdad expansionunderway
    Period spend: $150 million

    Added capital in 2026 to advance engineering and early works at Bagdad to enhance optionality as the company works towards an investment decision targeted in the second half of the year.

    Kucing Liar developmentunderway
    Period spend: ~50% of $1.6B-$1.7B

    Benefit: Increased operating rates from 90,000 to 130,000 tons/day

    Part of discretionary capital expenditures for 2026 and 2027. This development allows for deferral of significant pyrite processing capital associated with Grasberg Block Cave.

    LNG project at Grasbergunderway
    Period spend: ~50% of $1.6B-$1.7B

    Part of discretionary capital expenditures for 2026 and 2027, combined with Kucing Liar development.

    Atlantic Copper CirCular projectnearing completion

    Benefit: Process scrap from electronics

    Project in Spain to process scrap from electronics, including precious metals.

    Risks & headwinds

    5
    Grasberg incident impact on copper volumesFY25

    Approximately 10% reduction in annual copper volumes compared to plan

    Mitigation: Phased restart of Grasberg Block Cave, enhanced risk management, dynamic case management plans, robust controls, mud drainage solutions, emerging technology for imaging cave shape monitoring.

    Higher unit cash costs in South AmericaFY26

    $2.58 per pound forecast for FY26 (vs $2.57 in Q4 FY25)

    Mitigation: Focus on driving efficiencies, leveraging existing infrastructure, and optimizing operations.

    Autonomous fleet performance at BagdadOngoing

    Not achieving exactly what was expected from performance

    Mitigation: Optimizing performance, ongoing progress to ensure capability for higher rates.

    General cost inflation and tariffsOngoing

    Cost inflation (general), potential tariff impact on Bagdad components

    Mitigation: Value engineering, securing fixed pricing on major components for Bagdad expansion.

    Labor challenges in the U.S.Ongoing

    Labor has been a challenge

    Mitigation: Investing in infrastructure, autonomous operations (e.g., Bagdad haul truck fleet).

    What to watch in Q1 FY26

    5

    Grasberg Block Cave restart

    Q2 2026
    CurrentOn track for Q2 2026 start-up
    TargetSuccessful restart of PB 2 and PB 3

    Why it matters

    Essential for restoring significant production volumes and achieving full recovery, impacting overall company guidance.

    Since our November report, we've continued to make steady progress to prepare the Grasberg Block Cave to resume operations and we're on track for a second quarter 2026 start-up.

    Q&A highlights

    8

    Does the guidance for outer years include the leach opportunity reaching 800 million pounds by 2028, or is it not yet fully incorporated?

    The current outlook includes 250-300 million pounds for 2026, with potential upside as the company scales to 400 million pounds in 2027 and 800 million pounds by 2030. The full 800 million pounds and Bagdad expansion volumes are not yet included in the 2027-2028 guidance.

    “We've included in our outlook between 250 million and 300 million in 2026 and have not included anything beyond that for expansion. So it's around the long term, we've got around 250 million pounds in these numbers, and have the opportunity we expect to be at 300 million this year with an opportunity to scale to 400 million in '27, so there's some upside in our numbers, obviously.”

    asked by Carlos De Alba · answered by Kathleen Quirk

    3 min read7 chapters

    Detailed Narrative

    01

    Grasberg Recovery Progress

    Freeport-McMoRan is making steady progress on the phased restart of the Grasberg Block Cave operations following the September mud flow incident. The company completed investigations and restarted the Deep MLZ and Big Gossan mines in Q4 2025, and is on track for a Q2 2026 start-up of the Grasberg Block Cave, initially in Production Blocks 2 and 3. Mud removal is substantially complete for these blocks, and protective barriers are advanced, positioning for an early Q2 restart. The goal is to restore 85% of production in the district by H2 2026, with Production Block 1S targeted for mid-2027 and Production Block 1C for late 2027, incorporating enhanced risk management and mud drainage solutions.

    02

    U.S. Leach Opportunity

    The innovative leach initiative in the U.S. is a significant value driver, targeting a 40% increase in production in 2026 to 300 million pounds, with a path to 800 million pounds per annum by 2030. This growth is driven by successful field deployment of internally generated additives and planned testing of heated stockpile injections at Morenci and El Abra in 2026. The company also initiated a new leach stockpile at Chino using chemical heat, which shows promise for future stockpile design. These low-cost, low-capital incremental pounds are expected to significantly enhance U.S. business profitability and contribute to a target of $2.50 per pound unit cash cost by 2027.

    03

    Bagdad Expansion Advancements

    The Bagdad expansion opportunity is advancing towards an investment decision targeted for H2 2026. Freeport has allocated an additional $150 million in 2026 for engineering and early works to secure fixed pricing on major components and enhance optionality. The project requires roughly a $4 per pound average copper price to justify investment, which is supported by current market conditions. The company is also working to optimize the performance of its autonomous haul truck fleet at Bagdad and address labor challenges, aiming to deliver additional volumes at a lower incremental cost.

    04

    Market Outlook and Copper Demand

    Copper prices have risen significantly, with current LME prices approximately 30% higher than the 2025 average of $4.51 per pound. Demand is benefiting from secular trends like electrification and AI data centers, offsetting weakness in traditional sectors. A recent S&P Global report projects a doubling of copper demand through 2040, with a long-term annual growth rate of 2.9%, driven by massive investments in power grids, renewable generation, and technology infrastructure. Freeport is well-positioned to reliably and responsibly supply this growing market.

    05

    Capital Allocation and Financial Policy

    Freeport-McMoRan reiterates its financial policy priorities: maintaining a strong balance sheet, providing cash returns to shareholders, and investing in value-enhancing growth projects. The company distributed $5.7 billion to shareholders through dividends and share purchases. Forecasted annual EBITDA for 2027-2028 ranges from $11 billion to $19 billion, and operating cash flows from $8 billion to $14 billion, depending on copper prices, providing substantial capacity to fund organic growth and shareholder returns.

    06

    El Abra Expansion and Reserve Growth

    The company is progressing a major expansion at El Abra in Chile, in partnership with CODELCO. This project added over 17 billion pounds of copper to reserves in 2025, previously classified as a mineral resource. Freeport is finalizing the preparation of an environmental impact statement for this expansion, with submission planned for H1 2026. Testing of heated stockpile injections is also planned for 2026 to enhance leach recoveries, highlighting the significant long-term potential of this asset.

    07

    Kucing Liar Development Optimization

    Progress at Kucing Liar in Indonesia is continuing, with plans to increase its operating rates from 90,000 tons per day to 130,000 tons per day. This optimization allows Freeport to defer significant capital expenditures associated with pyrite handling and processing that would have been required for the Grasberg Block Cave. This strategic adjustment helps sustain a low-cost, long-term production profile in the Grasberg district by leveraging existing mill capacity and optimizing the sequence of ore processing.

    AI-generated summary of the company’s earnings call. Not investment advice.