Freeport-McMoRan approves $4.5bn to more than double its Bagdad copper mine in Arizona
With first output not due until mid-2030, the expansion adds to Freeport's long-dated US growth but looks unlikely to change its near-term cash flow.
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Freeport-McMoRan's board has approved a $4.5bn expansion and modernization of Bagdad, its wholly owned copper and molybdenum mine in northwest Arizona. Initial production is targeted for mid-2030.
The brownfield project, built on the existing site, is expected to more than double Bagdad's mining and milling rates. That would raise long-term copper production to over 400 million pounds a year and molybdenum production to over 20 million pounds.
Chief Executive Kathleen Quirk said the project "builds on Bagdad's substantial reserve base, long operating history, existing infrastructure and experienced workforce to deliver new U.S. copper and molybdenum production."
The long lead time shapes what this is. Nothing from the expansion arrives for years, so it looks unlikely to change near-term cash flow. Freeport guided 2026 capital spending at $4.4bn on October 27, and this approval leaves that plan as it was. What the board has done is commit to a larger domestic copper business in the next decade.
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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-McMoRan reports Q3 EPS of $0.88, $0.08 better than expected. Revenue $7.55B vs $7.50B expected.
Full-year 2026 sales are expected to total about 3.0 billion pounds of copper, 649,000 ounces of gold and 93 million pounds of molybdenum, including 875 million pounds of copper, 300,000 ounces of gold and 22 million pounds of molybdenum in the fourth quarter. Average unit net cash costs are expected to average $1.90 per pound of copper for 2026. Operating cash flow for 2026 is expected to approximate $8.5 billion, assuming fourth-quarter prices of $6.50 per pound of copper, $4,000 per ounce of gold and $32.00 per pound of molybdenum. Capital expenditures for 2026 are expected to approximate $4.4 billion, including $3.0 billion for major mining projects. Freeport-McMoRan repurchased 1.4 million shares for $102 million in the third quarter, bringing year-to-date buybacks to 4.9 million shares for $305 million.
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.