Freeport approves $4.5bn Bagdad copper expansion that will take years to deliver
Freeport says Bagdad will become the second-largest US copper producer, but its chief executive said last month that no Bagdad capital was in 2027 guidance.
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Freeport's board has approved a $4.5bn expansion and modernization of Bagdad, its wholly owned copper and molybdenum operation in northwest Arizona. Freeport says Bagdad will become the second-largest US copper producer and a top US molybdenum producer. It expects modern technology, automation and economies of scale to improve the mine's long-term cost position.
The payoff is slow. On its third-quarter call on Oct 27, Freeport said the expansion would take about 3.5 years from final investment decision to commissioning, according to a Yahoo Finance summary of the call. It would add 200-250 million pounds of copper and 10-12 million pounds of molybdenum a year, and more than double concentrator capacity.
The bill has also grown. Shanghai Metals Market, citing Freeport's remarks at a Jefferies conference on Sept 10, reported that the roughly $4.5bn is in current dollars and about 30% above the earlier $3.5bn estimate. It attributed the increase to cost escalation, scope changes and extra engineering.
The Bagdad haulage fleet has been converted to fully autonomous operation, and a remote operating center is being developed in Phoenix, TipRanks reported from the call. Chief executive Kathleen Quirk said on that call that permits for Bagdad are in hand, according to TipRanks and Yahoo Finance summaries.
Freeport guided 2026 capital spending at about $4.4bn and 2027 at $5.2bn, BigGo Finance reported.
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Favorable copper and molybdenum pricing drove strong margins and converted to bottom-line results, said President and Chief Executive Officer Kathleen Quirk, highlighting the diversified portfolio's strength.