For copper mining giant Freeport McMoRan (NYSE: FCX), 2025 proved to be a very strong year. The stock delivered a total return of over 35%, marking its best annual performance since 2021. This came despite disaster striking the company’s vital Grasberg Mine in Indonesia. A mudslide caused several workers to lose their lives, and the mine will face operational hindrances in the near future.
In September 2025, Freeport significantly cut its guidance due to the mudslide. Shares dropped over 20% in two days to approximately $35. The stock went on to stage a huge recovery, briefly rising above $70 in April 2025.
However, Freeport’s latest earnings report revealed that the re-commencement of operations at Grasberg is facing setbacks. In turn, shares are now down more than 15% from highs. Looking ahead, the rising demand for copper long-term continues to support Freeport’s outlook, but investors should not dismiss its operational issues.
Freeport Beats as Production Exceeds Expectations, Prices Rise
In its latest quarter, Freeport posted revenues of $6.23 billion, an increase of nearly 9% year over year (YOY). This figure greatly surpassed estimates of $5.73 billion. Meanwhile, adjusted earnings per share rose by 138% YOY to 57 cents, beating estimates by 10 cents.
The company’s success came as it was able to sell greater quantities of metal in Q1 than it had previously expected. The firm sold 657 million pounds of copper, 121,000 ounces of gold, and 24 million pounds of molybdenum. This compares to guidance of 640 million pounds of copper, 60,000 ounces of gold, and 22 million pounds of molybdenum. Notably, average realized prices rose considerably versus Q4 2025.
Realized Metals Prices and Change Versus Q4 2025
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Copper = $5.78 per pound, an 8% increase.
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Gold = $4,889 per ounce, a 20% increase.
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Molybdenum = $25.21 per pound, an 11% increase.
Despite these positives, investors focused on delays and reduced forecasts at Grasberg, leading to the large decline in shares.
Freeport Cuts Grasberg Forecasts as Wet Material Accumulates
Previously, Freeport expected its Indonesian operations to reach 85% of their total production capacity by the second half of 2026. Now, the firm has cut that forecast to 65%.
From 2026 to 2030, Freeport expects Grasberg to produce 6.9 billion pounds of copper in total. This is down 9% from past estimates. It forecasts gold production of 5.6 million ounces, down 7% from past estimates.
Management noted that in parts of the Grasberg mine, ore material became wetter than expected. Grasberg sits within a rainforest, making it one of the wettest regions on Earth.
When operations flow normally, Freeport has the technology to manage this. However, with operations halted, wetness accumulated, making ore more difficult to load into railcars. Thus, the company needs to install specialized equipment to operate efficiently under these conditions. The installation of this equipment is what is causing the firm to delay its timeline.
Supply and Demand Outlook for Copper Supports Freeport Long-Term
Notably, it was not all bad news regarding Grasberg. Ultimately, the company notes that this lost production through 2030 is recoverable over a longer period. Furthermore, Freeport expects its modifications to only cost around $60 million to $70 million. This is small relative to the firm’s planned capital expenditures (CapEx) of $8.8 billion in 2026 and 2027 combined. Lost time, rather than higher costs, is the primary negative from the Grasberg delay.
With copper demand expected to continue rising, Freeport should be able to make up for lost production in the long term. S&P Global estimates that copper demand will rise by 50% between now and 2040.
This is due to a variety of factors, with general economic growth and a transition to electric energy being the largest contributors. More economic growth leads to more buildings and demand for appliances, which require copper for power. Meanwhile, electric vehicles require around 2.9 times more copper than gas-powered vehicles.
Additionally, it is difficult to bring new copper supply online. S&P Global estimates that developing new mining projects takes an average of 17 years. These dynamics, higher demand and limited ability to bring on new supply, support higher copper prices long-term, and thus Freeport’s long-term outlook.
The delay at Grasberg is another reminder of the risks of investing in mining companies, as natural events can greatly disrupt operations. Still, Wall Street analysts maintain a generally positive outlook for the stock over the next 12 months. The MarketBeat consensus price target near $65 implies around 15% upside in shares. The average target price updated after the company’s earnings report is slightly higher, at $66.60.
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The article "Freeport Tanks Again on Mine Delay—Long Term Outlook Stays Strong" first appeared on MarketBeat.
