On April 30, 2024, Director PALOMINO BONILLA LUIS MIGUEL of Southern Copper Corp (NYSE:SCCO) sold 3,600 shares of the company, according to the SEC Filing. This transaction was executed in a single batch at a price of $118.36 per share, totaling approximately $426,096.

Southern Copper Corp, primarily engaged in mining, exploring, smelting, and refining copper and other minerals in Peru, Mexico, Argentina, Ecuador, and Chile, is one of the largest integrated copper producers in the world. The company's operations include open-pit and underground mines, mills, smelters, refineries, and other processing facilities.

Over the past year, the insider, PALOMINO BONILLA LUIS MIGUEL, has sold a total of 10,797 shares of Southern Copper Corp and has not made any purchases. This recent sale follows a trend observed over the past year, where there have been 20 insider sells and no insider buys.

Insider Sale at Southern Copper Corp (SCCO): Director PALOMINO BONILLA LUIS MIGUEL Sells Shares

As of the latest transaction, Southern Copper Corp has a market cap of approximately $89.04 billion. The stock's price-earnings ratio stands at 37.88, significantly higher than both the industry median and its historical median.

The GF Value of Southern Copper Corp is estimated at $69.00, indicating that the stock is currently Significantly Overvalued with a price-to-GF-Value ratio of 1.72.

Insider Sale at Southern Copper Corp (SCCO): Director PALOMINO BONILLA LUIS MIGUEL Sells Shares

The GF Value is calculated considering historical trading multiples, an adjustment factor based on past returns and growth, and future business performance estimates provided by Morningstar analysts.

This insider sale might interest investors tracking insider behaviors as an indicator of the company's future performance and valuation alignment.

This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.

This article first appeared on GuruFocus.

On April 30, 2024, Director Luis Miguel Palomino Bonilla of Southern Copper Corp (NYSE:SCCO) sold 3,600 shares of the company, according to the SEC Filing. The transaction occurred with the shares priced at $118.3 each.

Southern Copper Corp, a major player in the mining industry, focuses on the production of copper, molybdenum, zinc, lead, coal, and silver. The company operates mining sites primarily in Peru and Mexico.

Over the past year, the insider has sold a total of 10,797 shares of Southern Copper Corp and has not purchased any shares. This recent transaction is part of a broader trend where the company has seen 20 insider sales and no insider buys over the same period.

Insider Sale at Southern Copper Corp (SCCO): Director Luis Miguel Palomino Bonilla Sells Shares

Following this sale, shares of Southern Copper Corp were trading at $118.3, giving the company a market cap of approximately $89.04 billion. The price-earnings ratio of the company stands at 37.88, significantly above both the industry median and the company's historical median.

The stock's valuation, according to GF Value, is considered significantly overvalued with a price-to-GF-Value ratio of 1.71, based on a GF Value of $69.00.

Insider Sale at Southern Copper Corp (SCCO): Director Luis Miguel Palomino Bonilla Sells Shares

The GF Value is calculated considering historical trading multiples, an adjustment factor based on past returns and growth, and future business performance estimates provided by Morningstar analysts.

This insider sale might interest investors tracking insider behaviors as an indicator of the company's future performance and stock valuation.

This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.

This article first appeared on GuruFocus.

Buying shares in the best businesses can build meaningful wealth for you and your family. And highest quality companies can see their share prices grow by huge amounts. To wit, the Freeport-McMoRan Inc. (NYSE:FCX) share price has soared 339% over five years. And this is just one example of the epic gains achieved by some long term investors. On top of that, the share price is up 24% in about a quarter. The company reported its financial results recently; you can catch up on the latest numbers by reading our company report.

Since it's been a strong week for Freeport-McMoRan shareholders, let's have a look at trend of the longer term fundamentals.

View our latest analysis for Freeport-McMoRan

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

During five years of share price growth, Freeport-McMoRan actually saw its EPS drop 3.0% per year.

So it's hard to argue that the earnings per share are the best metric to judge the company, as it may not be optimized for profits at this point. Since the change in EPS doesn't seem to correlate with the change in share price, it's worth taking a look at other metrics.

We doubt the modest 1.2% dividend yield is attracting many buyers to the stock. On the other hand, Freeport-McMoRan's revenue is growing nicely, at a compound rate of 12% over the last five years. In that case, the company may be sacrificing current earnings per share to drive growth.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

earnings-and-revenue-growth

We consider it positive that insiders have made significant purchases in the last year. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. So we recommend checking out this free report showing consensus forecasts

What About Dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. We note that for Freeport-McMoRan the TSR over the last 5 years was 366%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!

A Different Perspective

We're pleased to report that Freeport-McMoRan shareholders have received a total shareholder return of 39% over one year. And that does include the dividend. That's better than the annualised return of 36% over half a decade, implying that the company is doing better recently. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Freeport-McMoRan you should know about.

Freeport-McMoRan is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Freeport-McMoRan (FCX) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.

Shares of this mining company have returned +0.6% over the past month versus the Zacks S&P 500 composite's -4.2% change. The Zacks Mining – Non Ferrous industry, to which Freeport-McMoRan belongs, has gained 6.6% over this period. Now the key question is: Where could the stock be headed in the near term?

While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.

Revisions to Earnings Estimates

Here at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.

We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For the current quarter, Freeport-McMoRan is expected to post earnings of $0.45 per share, indicating a change of +28.6% from the year-ago quarter. The Zacks Consensus Estimate has changed +19.7% over the last 30 days.

The consensus earnings estimate of $1.69 for the current fiscal year indicates a year-over-year change of +9.7%. This estimate has changed +8.9% over the last 30 days.

For the next fiscal year, the consensus earnings estimate of $2.31 indicates a change of +36.7% from what Freeport-McMoRan is expected to report a year ago. Over the past month, the estimate has changed -1.2%.

Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Freeport-McMoRan is rated Zacks Rank #3 (Hold).

The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:

12 Month EPS

12-month consensus EPS estimate for FCX _12MonthEPSChartUrl

Projected Revenue Growth

While earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.

For Freeport-McMoRan, the consensus sales estimate for the current quarter of $5.99 billion indicates a year-over-year change of +4.3%. For the current and next fiscal years, $24.81 billion and $25.23 billion estimates indicate +8.6% and +1.7% changes, respectively.

Last Reported Results and Surprise History

Freeport-McMoRan reported revenues of $6.32 billion in the last reported quarter, representing a year-over-year change of +17.3%. EPS of $0.32 for the same period compares with $0.52 a year ago.

Compared to the Zacks Consensus Estimate of $5.66 billion, the reported revenues represent a surprise of +11.74%. The EPS surprise was +18.52%.

The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.

Valuation

No investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.

Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.

The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an An is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.

Freeport-McMoRan is graded D on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.

Bottom Line

The facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Freeport-McMoRan. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.

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Freeport-McMoRan Inc. (FCX) : Free Stock Analysis Report

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Zacks Investment Research

For Immediate Release

Chicago, IL – May 2, 2024 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Thermo Fisher Scientific Inc. TMO, The Walt Disney Co. DIS, Southern Copper Corp. SCCO, Tractor Supply Co. TSCO and Omnicom Group Inc. OMC.

Here are highlights from Wednesday’s Analyst Blog:Top Research Reports for Thermo Fisher, Disney and Southern Copper

The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including Thermo Fisher Scientific Inc., The Walt Disney Co. and Southern Copper Corp. These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.You can see all of today’s research reports here >>>Thermo Fisher Scientific’s shares have outperformed the Zacks Medical – Instruments industry over the past year (+4.9% vs. +3.0%). The company is braving the ongoing tough economic conditions by utilizing the (Practical Process Improvement) PPI Business System, resulting in strong financial performance.Thermo Fisher Scientific’s growth strategy is further bolstered by the introduction of the Axiom PangenomiX Array, a high-throughput array designed for global genomic studies. The consistent efforts to expand bioproduction purification resin capacity, which is used in the mRNA manufacturing process, look encouraging.The company continues to prioritize its partnership with customers to drive innovation and improve patient care, which bodes well. A strong solvency position is an added advantage. The raised 2024 outlook instills optimism. However, the year-over-year decline in revenues in Life Science Solutions and Laboratory Products and Biopharma Services looks disappointing.(You can read the full research report on Thermo Fisher Scientific here >>>)Shares of Walt Disney have outperformed the Zacks Media Conglomerates industry over the past year (+10.8% vs. -0.1%). The company is benefiting from a solid revival in the domestic and international theme park businesses. Recent attractions like the Frozen theme land at Hong Kong Disneyland and Walt Disney Park in Paris, as well as the Zootopia theme land at Shanghai Disney, are expected to boost the prospects of the theme park business.The company’s declining ad revenues due to fewer impressions have been a headwind for some time now. Disney+’s profitability is expected to be hurt by higher investments in content, which will increase programming and production costs in the Media and Entertainment Distribution segment.Its leveraged balance sheet remains a concern. Disney+ is facing tough competition in the streaming market from the likes of Netflix and Amazon Prime Video.(You can read the full research report on Walt Disney here >>>)Southern Copper’s shares have outperformed the Zacks Mining – Non Ferrous industry over the past year (+59.4% vs. +43.7%). The company expects copper production to be up 4.1% year over year and reach 948,800 tons in 2024 driven by the Pilares project running at full capacity and the Buenavista zinc concentrator ramp-up.Copper prices had been impacted in the earlier part of 2024 due to weak demand in China and the manufacturing sector. However, prices have rebounded recently supported by China's output reduction plans and pickup in industrial activity. Higher output and metal prices will aid the top line and cost-control measures will help offset the impact of inflated labor and operating costs on margins.With substantial copper reserves and strategic growth investments, Southern Copper is positioned for strong performance. The long-term prospects for copper remains positive, buoyed by U.S. infrastructure investment and global clean energy transition.(You can read the full research report on Sothern Copper here >>>)Other noteworthy reports we are featuring today include Tractor Supply Co. and Omnicom Group Inc.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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Omnicom Group Inc. (OMC) : Free Stock Analysis Report

Thermo Fisher Scientific Inc. (TMO) : Free Stock Analysis Report

Tractor Supply Company (TSCO) : Free Stock Analysis Report

The Walt Disney Company (DIS) : Free Stock Analysis Report

Southern Copper Corporation (SCCO) : Free Stock Analysis Report

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Zacks Investment Research

  • Insight into Southern Copper Corp's financial performance and market position.

  • Exploration of strengths, weaknesses, opportunities, and threats in the context of the latest financial data.

  • Strategic evaluation of Southern Copper Corp's operational and financial strategies.

On April 30, 2024, Southern Copper Corp (NYSE:SCCO), an integrated producer of copper and other minerals, released its 10-Q filing, revealing a detailed snapshot of its financial health and operational performance for the first quarter of the year. The filing indicates a slight decrease in net sales from $2,793.9 million in Q1 2023 to $2,599.8 million in Q1 2024, with net income attributable to SCC also dipping from $813.2 million to $736.0 million. Despite these declines, the company maintains a robust operating income of $1,189.7 million and continues to demonstrate its financial resilience. This SWOT analysis delves into the strengths, weaknesses, opportunities, and threats as presented in the latest SEC filing, offering a comprehensive view of SCCO's strategic positioning in the market.

Decoding Southern Copper Corp (SCCO): A Strategic SWOT InsightStrengths

Robust Production Capabilities: Southern Copper Corp's strength lies in its substantial production capabilities, as evidenced by its increased copper production of 7.6% in Q1 2024 compared to the same period in the previous year. This growth is attributed to higher ore grades and recoveries at key mines like Toquepala and Cuajone. The company's ability to maintain and enhance production levels, despite market fluctuations, underscores its operational efficiency and positions it favorably within the industry.

Strategic Resource Reserves: The company's vast mineral reserves are a testament to its long-term sustainability. With significant investments in exploration activities across Peru, Mexico, and other regions, SCCO ensures a continuous supply of copper and other valuable by-products. This strategic reserve allocation not only secures the company's future production but also provides a competitive edge in meeting global demand for copper, which is essential for the burgeoning clean energy sector.

Weaknesses

Market Price Sensitivity: SCCO's financial performance is significantly affected by the volatility of international market prices for copper and other metals. The recent decrease in net sales and net income is partly due to the lower prices of copper, molybdenum, and zinc. This sensitivity to market prices exposes the company to financial risks and underscores the need for effective hedging strategies to mitigate the impact of price fluctuations on profitability.

Operational Challenges: The company has faced operational challenges, such as the water supply issues at the Buenavista mine, which affected production. While SCCO has taken action to address these issues, such operational setbacks can lead to temporary disruptions and affect the company's ability to meet production targets, potentially impacting investor confidence and market perception.

Opportunities

Expansion Projects: Southern Copper Corp has several capital investment programs underway, including the Buenavista Zinc project and the El Pilar project in Mexico. These initiatives aim to increase production capacity, reduce costs, and enhance the company's product offerings. The successful completion and operation of these projects could significantly boost SCCO's production output and market share, presenting lucrative opportunities for growth and profitability.

Renewable Energy Shift: The global transition to clean energy presents a substantial opportunity for SCCO, given copper's critical role in renewable energy infrastructure. As the demand for copper is expected to rise with the proliferation of green technologies, Southern Copper Corp is well-positioned to capitalize on this trend, leveraging its production strengths to meet the increasing market demand.

Threats

Regulatory and Environmental Risks: Mining operations are subject to stringent environmental regulations and social responsibilities. Any changes in regulatory policies or failure to comply with environmental standards can lead to penalties, increased operational costs, and reputational damage. Additionally, the company must navigate complex social dynamics with local communities, where any missteps could result in project delays or increased scrutiny.

Competition and Market Dynamics: The mining industry is highly competitive, with numerous players vying for market share. Southern Copper Corp must continuously innovate and improve its operational efficiencies to stay ahead of competitors. Furthermore, the cyclical nature of the commodities market can lead to unpredictable dynamics, where sudden shifts in supply and demand can adversely affect the company's financial performance.

In conclusion, Southern Copper Corp's latest SEC filing reveals a company with strong production capabilities and strategic resource reserves, positioning it well in the mining sector. However, its sensitivity to market prices and operational challenges highlight areas for improvement. The company's expansion projects and the global shift towards renewable energy present significant opportunities for growth. Nevertheless, SCCO must navigate regulatory and environmental risks, as well as competitive market dynamics, to maintain its market position and drive long-term success.

This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.

This article first appeared on GuruFocus.

Wednesday, May 1, 2024The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including Thermo Fisher Scientific Inc. (TMO), The Walt Disney Co. (DIS) and Southern Copper Corp. (SCCO). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.You can see all of today’s research reports here >>>Thermo Fisher Scientific’s shares have outperformed the Zacks Medical – Instruments industry over the past year (+4.9% vs. +3.0%). The company is braving the ongoing tough economic conditions by utilizing the (Practical Process Improvement) PPI Business System, resulting in strong financial performance.Thermo Fisher Scientific’s growth strategy is further bolstered by the introduction of the Axiom PangenomiX Array, a high-throughput array designed for global genomic studies. The consistent efforts to expand bioproduction purification resin capacity, which is used in the mRNA manufacturing process, look encouraging.The company continues to prioritize its partnership with customers to drive innovation and improve patient care, which bodes well. A strong solvency position is an added advantage. The raised 2024 outlook instills optimism. However, the year-over-year decline in revenues in Life Science Solutions and Laboratory Products and Biopharma Services looks disappointing.(You can read the full research report on Thermo Fisher Scientific here >>>)Shares of Walt Disney have outperformed the Zacks Media Conglomerates industry over the past year (+10.8% vs. -0.1%). The company is benefiting from a solid revival in the domestic and international theme park businesses. Recent attractions like the Frozen theme land at Hong Kong Disneyland and Walt Disney Park in Paris, as well as the Zootopia theme land at Shanghai Disney, are expected to boost the prospects of the theme park business.The company’s declining ad revenues due to fewer impressions have been a headwind for some time now. Disney+’s profitability is expected to be hurt by higher investments in content, which will increase programming and production costs in the Media and Entertainment Distribution segment.Its leveraged balance sheet remains a concern. Disney+ is facing tough competition in the streaming market from the likes of Netflix and Amazon Prime Video.(You can read the full research report on Walt Disney here >>>)Southern Copper’s shares have outperformed the Zacks Mining – Non Ferrous industry over the past year (+59.4% vs. +43.7%). The company expects copper production to be up 4.1% year over year and reach 948,800 tons in 2024 driven by the Pilares project running at full capacity and the Buenavista zinc concentrator ramp-up.Copper prices had been impacted in the earlier part of 2024 due to weak demand in China and the manufacturing sector. However, prices have rebounded recently supported by China's output reduction plans and pickup in industrial activity. Higher output and metal prices will aid the top line and cost-control measures will help offset the impact of inflated labor and operating costs on margins.With substantial copper reserves and strategic growth investments, Southern Copper is positioned for strong performance. The long-term prospects for copper remains positive, buoyed by U.S. infrastructure investment and global clean energy transition.(You can read the full research report on Sothern Copper here >>>)Other noteworthy reports we are featuring today include Public Service Enterprise Group Inc. (PEG), Tractor Supply Co. (TSCO) and Omnicom Group Inc. (OMC).Mark VickerySenior EditorNote: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>

Today's Must Read

Strategic Pacts Aids Thermo Fisher (TMO) Amid Stiff Rivalry

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Tractor Supply (TSCO) 'ONETractor' Strategy Seems EncouragingPer the Zacks analyst, Tractor Supply is focused on integrating its physical and digital operations to offer consumers a seamless shopping experience. Its 'ONETractor' Strategy looks good.

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Sensata (ST) Gains from Organic Growth Amid Forex VolatilityPer Zacks analyst, Sensata's performance is cushioned by healthy organic growth amid unfavorable foreign exchange movement. Increasing momentum in electrification business bodes well.

Transocean (RIG) Likely to Benefit from Backlog of $8.9BThe Zacks analyst believes that RIG's backlog of $8.9 billion provides earnings and cash flow visibility, but is concerned over high cash costs at day rates.

Strategic Initiatives and Expansion Aid RH Amid High CostsPer the Zacks analyst, RH is benefiting from various strategic initiatives and expansion efforts. However, elevated expenses and high debt levels are a concern.

Deciphera (DCPH) Surges on $2.4B Buyout Offer From ONO PharmaPer the Zacks Analyst, shares of Deciphera have surged on a $2.4 billion buyout offer from ONO Pharma. The transaction is expected to close in the third quarter of 2024.

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Growth in Direct-To-Consumer Business Aids Skechers (SKX) Per the Zacks analyst, Skechers' direct-to-consumer business gains from growth in international and domestic markets. DTC sales increased 17.3% year over year to $829.9 million in first quarter.

Solid Growth of Digital Platform Aids Western Union (WU)Per the Zacks Analyst, Western Union's digital platform has been adding customers and strengthening its business. Streamlining of business operations will help it to focus on core competencies.

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Seasonal Fluctuation & Launch Costs Ail Standard Motor (SMP)The Zacks analyst is worried about weather-related factors that make Standard Motor's Temperature Control business highly unpredictable. The launch cost of new distribution center is also a concern.

Lower Volumes, Housing Slowdown Ail U.S. Silica (SLCA) Per the Zacks analyst, U.S. Silica's Oil & Gas division is being challenged by declining volumes. Its ISP segment also faces headwinds from the slowdown in the housing market.

BioPharma Downturn, Soft Chinese Market Hurt Bio-Rad (BIO)The Zacks analyst is worried about Bio-Rad's Life Science business affected by the biopharma challenges. Soft China market conditions dent Clinical Diagnostics sales.

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Public Service Enterprise Group Incorporated (PEG) : Free Stock Analysis Report

Omnicom Group Inc. (OMC) : Free Stock Analysis Report

Thermo Fisher Scientific Inc. (TMO) : Free Stock Analysis Report

Tractor Supply Company (TSCO) : Free Stock Analysis Report

The Walt Disney Company (DIS) : Free Stock Analysis Report

Southern Copper Corporation (SCCO) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

Investors with an interest in Mining – Non Ferrous stocks have likely encountered both Amerigo Resources (ARREF) and Freeport-McMoRan (FCX). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Right now, Amerigo Resources is sporting a Zacks Rank of #2 (Buy), while Freeport-McMoRan has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that ARREF likely has seen a stronger improvement to its earnings outlook than FCX has recently. However, value investors will care about much more than just this.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

ARREF currently has a forward P/E ratio of 7.88, while FCX has a forward P/E of 29.99. We also note that ARREF has a PEG ratio of 0.39. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. FCX currently has a PEG ratio of 8.09.

Another notable valuation metric for ARREF is its P/B ratio of 1.98. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, FCX has a P/B of 2.55.

These metrics, and several others, help ARREF earn a Value grade of A, while FCX has been given a Value grade of D.

ARREF is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that ARREF is likely the superior value option right now.

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Vale S.A. VALE reported first-quarter 2024 adjusted earnings per share of 39 cents, which missed the Zacks Consensus Estimate of 42 cents. The bottom line was down 5% from 41 cents reported in the year-ago quarter.

While there was an improvement in sales volumes of iron ore and copper courtesy of continued operational improvements, this was negated by reduced sales volumes of nickel, as well as declines in prices for iron ore, copper and nickel. Additionally, elevated costs and expenses contributed to the decline in the bottom line.

Revenues

Net operating revenues inched up 0.3% year over year to around $8.46 billion. The top line surpassed the Zacks Consensus Estimate of $8.35 billion.

VALE S.A. Price, Consensus and EPS SurpriseVALE S.A. Price, Consensus and EPS Surprise

VALE S.A. price-consensus-eps-surprise-chart | VALE S.A. Quote

In the first quarter of 2024, the Iron Solutions segment generated net operating revenues of $7 billion, marking a 10% increase compared with the same quarter last year.  While the segment witnessed a 15% improvement in sales volume, attributed to Vale’s continuous operational enhancements, this was somewhat offset by lower prices. Notably, during the quarter, the S11D mine attained its highest production levels since 2020, bolstered by ongoing asset reliability initiatives that ensured enhanced operational stability even amid the rainy season.The Energy Transition Metals segment’s net operating revenues plunged 28% year over year to $1.4 billion. Nickel revenues plunged 45% year over year to $558 million due to an 18% decline in sales volume and a 33% decline in prices. Copper revenues inched up 1% to $587 million as a 22% improvement in sales volumes was negated by an 18% drop in prices. Improved performance at the Salobo complex, coupled with the Salobo 3 plant ramp-up led to higher copper production and sales during the quarter.

Operating Performance

In the first quarter of 2024, the cost of goods sold was around $5.4 billion, which marked an 8% increase from the year-ago quarter. The gross profit declined 11% year over year to $3.1 billion. The gross margin was 36.6% compared with 41.3% in the year-ago quarter.Selling, general and administrative expenditures rose 19% year over year to $140 million. Research and development expenses were $156 million, 12% higher than the year-ago quarter.Adjusted operating income was $2.7 billion in the reported quarter. The figure marked an 11% decline from the year-ago quarter. Adjusted EBITDA was $3.4 billion in the quarter compared with $3.7 billion in the year-ago quarter.Pro-forma adjusted EBITDA (including associates & Joint ventures) was down 9% year over year to $3.5 billion. The downfall was mainly due to lower iron ore fines, and nickel and copper realized prices. This was partially offset by increased iron ore and copper sales volumes. Higher costs and unfavorable currency also led to the decline.The Iron Solutions segment’s adjusted EBITDA was $3.46 billion, which was in line with the first quarter of 2023 as gains from higher sales volumes were offset by lower prices.The Energy Transition Metals segment’s EBITDA slumped 55% to $257 million from $573 million in the year-ago quarter. Copper operations witnessed a 29% year-over-year improvement in adjusted EBITDA to $284 million attributed to increased sales volumes. Adjusted EBITDA for nickel slumped 95% year over year to $17 million due to declining average prices and lower volumes sold.

Balance Sheet & Cash Flows

Vale exited the first quarter of 2024 with cash and cash equivalents of around $3.8 billion compared with $3.6 billion at the end of 2023. Cash flow generated from operations was $3.58 billion in the first quarter compared with $3.61 billion in the year-ago quarter.Gross debt and leases at the end of the quarter were $14.7 billion compared with $13.9 billion at the end of 2023. The increase reflected new loans raised by Vale Base Metals Ltd. and Vale, per the company’s liability management plan.Vale paid around $2.33 billion to shareholders in the form of dividends and repurchased shares for $275 million in the first quarter of 2024.

Other Updates

Vale recently entered into an agreement to acquire the entire 45% stake held by Cemig Geração e Transmissão S.A. in Aliança Geração de Energia S.A. for R$ 2.7 billion ($0.53 billion), effectively securing 100% ownership of Aliança Energia’s shares.Aliança Energia's power generation asset portfolio comprises seven hydroelectric power plants and three wind farms in Brazil, with an installed capacity of 1,438 MW and an average physical guarantee of 755 MW. This strategic move is in line with Vale's objective to have an energy matrix based on renewable sources in Brazil and its commitment to decarbonize operations at competitive costs.

Price Performance

In the past year, shares of Vale have lost 12.1% compared with the industry’s 12.3% decline.

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Zacks Rank

Vale currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Peer Performances

Except gold and silver, other metals (copper, zinc, nickel) experienced declines in prices in the first quarter, which was reflected in the results of other mining companies as well.Teck Resources TECK reported first-quarter 2024 adjusted earnings per share (EPS) of 56 cents, missing the Zacks Consensus Estimate of 87 cents. The bottom line marked a 58% year-over-year plunge.Gains from increased prices for steelmaking coal and higher copper sales volumes were offset by decreased zinc and copper prices and lower steelmaking coal sales volumes. Teck’s earnings were also impacted by increased unit costs at the steelmaking and Quebrada Blanca operations.Southern Copper’s SCCO first-quarter 2024 EPS was 95 cents, which marked a 9.5% decline year over year. However, SCCO’s bottom line beat the Zacks Consensus Estimate of 78 cents.

The company reported year-over-year improvement in sale volumes for copper and molybdenum, However, this was offset by the impact of lower prices for copper, molybdenum and zinc.Freeport-McMoRan Inc. FCX reported adjusted EPS of 32 cents, topping the Zacks Consensus Estimate of 27 cents.Gains from higher copper and gold sales, and elevated gold prices were offset by lower copper prices. This resulted in a 38% year-over-year decline in Freeport-McMoRan’s earnings.

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Southern Copper Corporation SCCO reported first-quarter 2024 earnings of 95 cents per share, which beat the Zacks Consensus Estimate of 78 cents. The bottom line, however, declined 9.5% from the -year-ago quarter, mainly attributed to lower prices of copper, molybdenum and zinc. Also, reduced sales volumes for zinc and silver offset the gains from higher copper and molybdenum sales. Net sales were $2.6 billion, which marked a 7% decline year over year. The top line surpassed the consensus estimate of $2.5 billion.

Revenues were mainly impacted by lower prices for copper (5.4%), molybdenum (38.1%) and zinc (-21.8%). Southern Copper witnessed an 8.5% year-over-year increase in molybdenum sales volumes while its copper sales volume was up 2.8% in the first quarter of 2024. These gains were offset by lower sales volumes of zinc and silver, which declined 3.1% and 0.3% respectively.

Cost of sales decreased 3% year over year to $1.16 billion. Total operating costs were down 2% year over year to $1.4 billion.

Southern Copper Corporation Price, Consensus and EPS SurpriseSouthern Copper Corporation Price, Consensus and EPS Surprise

Southern Copper Corporation price-consensus-eps-surprise-chart | Southern Copper Corporation Quote

Operating profit was $1.19 billion, reflecting a 12% year-over-year decline. The operating margin was 45.8% compared with 48.5% in the year-ago quarter. Adjusted EBITDA declined 10% year over year to $1.42 billion in first-quarter 2024. Adjusted EBITDA margin was 54.5%, a 160-basis point contraction from the year-ago quarter’s margin of 56.1%.

Production Details

Copper: SCCO mined 240,270 tons of copper, up 8% year over year. This reflected an increase in copper from concentrate production at all SCCO’s mines, partially offset by a decrease in SXEW cathode production at Buenavista and Toquepala. Copper sales were up 2.8% year over year to 235,206 tons.Molybdenum: The company mined 7,079 tons of molybdenum, reflecting a year-over-year improvement of 9.5% driven by higher output at the Toquepala, offset by lower output at La Caridad mines. Molybdenum sales were 7,036 tons , an 8.4% increase from 6,488 tons in the first quarter of 2023.Zinc: The company’s zinc production surged 75% year over year to 26,366 tons attributed to the contribution from the new Buenavista zinc concentrator. Zinc sales decreased 3% year over year to 25,653 tons.Silver: Southern Copper’s silver production was up 8% year over year to 4.78 million ounces due to lower production at all operations, barring Buenavista. Sales were down 3.4% year over year to 4.95 million ounces.

Cash Flow & Balance Sheet

Southern Copper generated net cash from operating activities of $0.7 billion in the first quarter of 2024, down from $1.19 billion in the year-ago comparable quarter. This decline was due to a $310.8 million increase in working capital, which was driven primarily by Mexican operations.

Cash and cash equivalents were $1.25 billion at the end of the first quarter compared with $1.15 billion as of the end of 2023. Long-term debt was $6.26 billion as of Mar 31, 2024, flat compared with the debt balance as of Dec 31, 2023.

SCCO made capital investments worth $214 million, 10.2% lower than the spending in the year-ago comparable quarter.

Price Performance

Shares of Southern Copper have gained 57% in the past year compared with the industry’s 44% growth.

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Zacks Rank

Southern Copper currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Peer Performances

Except gold and silver, other metals (copper, zinc, nickel) experienced declines in prices in the first quarter, which was reflected in the results of other mining companies as well.Teck Resources TECK reported first-quarter 2024 adjusted earnings per share (EPS) of 56 cents, missing the Zacks Consensus Estimate of 87 cents. The bottom line marked a 58% year-over-year plunge.Gains from increased prices for steelmaking coal and higher copper sales volumes were offset by lower zinc and copper prices and decreased steelmaking coal sales volumes. Teck’s earnings were also impacted by increased unit costs at the steelmaking and Quebrada Blanca operations.Freeport-McMoRan Inc. FCX reported adjusted EPS of 32 cents, topping the Zacks Consensus Estimate of 27 cents. Gains from higher copper and gold sales and elevated gold prices were offset by lower copper prices. This resulted in a 38% year-over-year decline in Freeport-McMoRan’s earnings.First Quantum Minerals FQVLF recorded an adjusted quarterly loss of 20 cents per share, wider than the Zacks Consensus Estimate of a loss of 14 cents per share. This is in contrast to earnings of 11 cents per share reported in the first quarter of 2023.  The company’s results have been negatively impacted by the disruptions experienced at the Cobre Panamá mine, which led to the mine being placed in a phase of Preservation and Safe Management since November 2023.

First Quantum Minerals witnessed a 32% decline in copper sales volumes in the quarter. This was mainly due to lower output at Cobre Panama while Kansanshi and Sentinel mines reported improvement in copper output. Lower copper realized prices also impacted FQVLF’s earnings in the quarter.

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Investors interested in stocks from the Mining – Non Ferrous sector have probably already heard of Lundin Mining (LUNMF) and Southern Copper (SCCO). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Lundin Mining and Southern Copper are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that LUNMF's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

LUNMF currently has a forward P/E ratio of 14.29, while SCCO has a forward P/E of 30.63. We also note that LUNMF has a PEG ratio of 0.72. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. SCCO currently has a PEG ratio of 3.46.

Another notable valuation metric for LUNMF is its P/B ratio of 1.45. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, SCCO has a P/B of 12.49.

Based on these metrics and many more, LUNMF holds a Value grade of B, while SCCO has a Value grade of F.

LUNMF has seen stronger estimate revision activity and sports more attractive valuation metrics than SCCO, so it seems like value investors will conclude that LUNMF is the superior option right now.

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In this article, we will be discussing the Top 20 Copper Producing Countries in The World. If you want to skip our detailed analysis of the global copper sector, along with all-share buyout proposal by BHP Group, go directly to the Top 5 Copper Producing Countries In The World.

Copper; the first metal manipulated by humans, still stands as one of the most important metals. From its use in mobile phones, laptops, homes, and automobiles, copper is the third most used metal in the world. According to USGS, an average US resident requires 12 pounds of copper each year to sustain their lifestyle. Furthermore, it is believed that this demand is going to continue to grow in years to come.

Research presented in Yahoo Finance shows that the global market for copper was $308.67 billion in 2023 and it is forecasted to grow to $504.93 billion by 2033, projecting a Compound Annual Growth Rate (CAGR) of 5.04% during the forecasted period. While the demand for copper is expected to increase with prices averaging around $8,602 in 2024 and $9,070 in 2025, according to S&P Global Commodity Insights, the production is having a hard time keeping up. The production levels from the existing copper mines are anticipated to decline over the remainder of decade.

The biggest increase in demand for copper is coming from the shift towards green economy. Technologies like EVs, solar panels, wind turbines and batteries require a lot more copper than the traditional fossil fuel-based technologies. Modern renewable energy systems use up to 12 times more copper than non-renewable energy systems, according to the Copper Alliance. A great example of this is usage of copper in EVs, that require four times more copper than regular cars. And with these energy transitions on the rise, the demand for copper is estimated to increase by almost 600% by the year 2030.

We can see that these high levels of demand for copper and shortages in supply is exactly the motivation behind BHP’s (NYSE:BHP) bid for Anglo American plc (LSE:AAL.L). Earlier this week on April 25, 2024, Anglo American plc (LSE:AAL.L) announced that it had received an all-share buyout proposal from BHP Group (NYSE:BHP). While Anglo has quite a few businesses ranging from diamonds to platinum, the biggest aim and prize for BHP is copper. “First and foremost” the proposed takeover is about copper, William Tankard, principal analyst of base metals at CRU Group, told CNN. BHP is the world’s second-biggest producer of mined copper, while Anglo American plc (LSE:AAL.L) is the sixth biggest, according to an Insider Monkey article.

Anglo has copper mines in Chile and Peru, countries in which BHP Group (NYSE:BHP) also has operations. This deal, if goes through, could end up creating the world’s biggest copper miner which would be able to produce around 10% of global copper output amounting to 2.6 million metric tons of copper a year, as given by Business Day. This would put BHP Group well ahead of Freeport-McMoRan (NYSE:FCX).

The $39 billion takeover bid, however, has been rejected by Anglo American, stating that the big significantly undervalued the firm and its future prospects. There is a high likelihood that BHP might push harder and make a return with a better offer given the stakes it sees in the company, and the copper mining. However, if that happens, it also makes it very probable that other market giants like Vale S.A. (NYSE:VALE), Rio Tinto (NYSE:RIO), and Freeport-McMoRan (NYSE:FCX) also come and join the race to the bid.

Thus, it can be seen from all that's discussed above, that copper is one of the most in-demand metals. And hence, the makers across the world are very keen on capitalizing on any opportunity that has a potential to open or expand hold on the copper production, as can be seen from GHP proposal to Anglo. Thus, let's now take a look at Top 20 Copper Producing Countries in the World.

Top 20 Copper Producing Countries in The World

An open pit mine, with heavy machinery extracting copper ore in the background.

Methodology

To create our list of Top 20 Copper Producing Countries In The World, we gathered data on the copper production levels for each country. Latest data available for each country has been sourced from credible sources including US Geological Survey and World Mining Data. The values have also been cross referenced from multiple platforms like NASDAQ, Insider Monkey, and Investing News Network. With the acquired data, we have listed the Top 20 Copper Producing Countries In The World in ascending order based on the production levels of copper per annum in each country.

By the way, Insider Monkey is an investing website that tracks the movements of corporate insiders and hedge funds. By using a similar consensus approach, we identify the best stock picks of more than 900 hedge funds investing in US stocks. The top 10 consensus stock picks of hedge funds outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). Whether you are a beginner investor or professional one looking for the best stocks to buy, you can benefit from the wisdom of hedge funds and corporate insiders.

20. Spain

Copper Production in 2021: 138,060 metric tons

We are starting our list of Top 20 Copper Producing Countries In The World with Spain. Spain contributes 0.55% to global production, according to Mining Technology. Copper exports for Spain are expected to grow at CAGR of 2% between 2022 and 2026. One of the leading producers of copper in Spain is the First Quantum Minerals, producing 101,776 tons of copper in the first quarter of 2024, ending 31 March 2024. In 2022 Copper Ore was the 35th most imported product in Spain. Moreover, in January 2024, Spain exported Copper Ore worth $101.96 million and imported Copper Ore worth $230.84 million.

19. Uzbekistan

Copper Production in 2021: 148,500 metric tons

In 2022, Uzbekistan exported $4.17 million worth of Copper Ore, ranking as the 59th largest exporter of Copper Ore globally, according to OEC. During the same year, Copper Ore stood as the 221st most exported product from Uzbekistan. Kazakhstan ($204 million) and Azerbaijan ($10.3 million) emerged as the fastest-growing import markets for Copper Ore in Uzbekistan.

18. Myanmar 

Copper Production in 2021: 200,360 metric tons

The Letpadaung Copper Mine in Sagaing, Myanmar, held the title of the largest mine in the country, with an annual production of around 36.92 million tons, according to Global Data. Wanbao Mining Co Ltd owns the Letpadaung Copper Mine, which is scheduled to remain operational until 2051.

17. Mongolia  

Copper Production in 2021: 303,030 metric tons

Oyu Tolgoi in Mongolia is one of the world's largest deposits of gold and copper, owned by Rio Tinto Group (NYSE:RIO). Rio Tinto Group (NYSE:RIO) is a British-Australian company, which is all about metals and mining. According to OEC, the country is one of the key copper exporters to China and exported 335,000 metric tons of copper to the country in the first quarter of the year 2022. Amidst the ongoing advancements in Mongolia's mining sector, the nation is poised to rank as the fifth-largest copper producer by 2030.

16. Iran 

Copper Production in 2021: 313,612 metric tons

Iran plans to invest $15 billion to expand its copper production over the next five years. Iran aims to raise its annual copper cathode production capacity from 280,000 tons currently to over one million tons. New explorations have commenced in South Khorasan province in eastern Iran, with similar efforts underway in other provinces.

Amir Hassan Zadeh, deputy for economic affairs of the governorate of Kerman said that “The future of the nation is tied to the copper industry.”

15. Panama

Copper Production in 2021: 331,000 metric tons

Cobre Panama is an open-pit copper mine situated in the Colon Province of Panama. The copper mine, developed with an estimated investment of £5.3 billion ($7 billion), began commercial production in September 2019. Business Insider reported that the mine was responsible for 1.5% of the world’s copper before it shut down. At full capacity the mine is said to produce whopping 320,000 tons of copper!

14. Brazil

Copper Production in 2021: 335,761 metric tons

Brazilian economy is strongly supported by its mining industry and is also the biggest reason for Brazil’s positive balance of trade. The Brazilian mining giant Vale S.A. (NYSE:VALE), owns the largest mines in the country. The two largest mines Salobo Mine and Sossego Mine, both located in Para, are owned by Vale S.A. (NYSE:VALE). In 2023, Vale S.A. (NYSE:VALE) produced 66,800 metric tons of copper from its Sossego Mine, according to Reuters, while the Salobo Mine squeezed in a production of 136.88 thousand tons of copper in 2023.

13. Poland

Copper Production in 2021: 391,300 metric tons

Poland is one of the top countries in the world when it comes to electrolyte copper production. The country also holds impressive reserves of copper amounting to almost 36 million tons. In 2021, Poland exported copper worth $5.97 billion and was in included in the largest exporters of copper. The largest mine, owned by KGHM Polska Miedź S.A, is Rudna mine which produces copper and silver.

12. Kazakhstan

Copper Production in 2021: 511,940 metric tons

Kazakhstan produces 4% of the total copper produced in the world but it is it expected to see a slight decline in its production. According to Mining Technology, this decline of CAGR 0.63% is forecasted for the period 2022 to 2026 by Global Data. Out of the 709 mines that are operational in the world, 24 of them exist in Kazakhstan. Few of the biggest of these are Aktogay and Zhezkazgan, producing 229.78 thousand tons and 171.38 thousand tons of copper, respectively.

11. Canada

Copper Production in 2021: 541,648 metric tons

Canada holds copper reserves of almost 900 million tons in huge deposits of sulfide and porphyry. British Columbia is the single largest producer of copper in Canada, producing 53% of the total copper production. This province also has Canada’s biggest copper mine named Highland Valley that alone in 2022 produced 119,000 tons of copper, according to Government of Canada.

10. Mexico

Copper Production in 2023: 750,000 metric tons

The nation possesses nearly 53 million metric tons of reserves. The Buenavista del Cobre Mine in Sonora stands as Mexico's largest mine, giving out a production of 427.44 thousand tons of copper. According to the National Institute of Statistics and Geography, Mexico saw a 1.4% decrease in copper production in July 2022 compared to the previous year. This decline affected the entire mining industry in the country, resulting from mine closures, operational delays, and reduced ore grades.

9. Zambia

Copper Production in 2023: 760,000 metric tons

Copper plays a major role in the Zambian economy and accounts for 75% of the country’s total export earnings. The Mopani Copper Mines in Zambia produce most of the country's copper, squirting out a production volume of 72,694 metric tons in 2022; they represent Africa's largest copper deposit. The Lumwana mine is another significant operation in Zambia. It is owned by Barrick Gold Corporation (NYSE: GOLD).

As per UK investment firm SP Angel, Zambia's new president, Hakainde Hichilema, aims to boost investments in the country and intends to triple its copper production in the next decade.

8. Australia

Copper Production in 2023: 810,000 metric tons

The second largest copper reserves in the world belong to Australia second only to Chile at 93 million tons. About 10% of Australia's revenue comes from copper exports. In 2021, half of Australia's exports went to China, with Japan and South Korea following closely behind. The Olympic Dam deposit in Australia is home to one of the country's largest copper reserves, producing 205,000 tons in 2021, and is owned by BHP group limited (NYSE:BHP).

7. Indonesia

Copper Production in 2023: 840,000 metric tons

Indonesia is also one of the world's top copper producing countries. Grasberg Block Cave Mine, which is located in Papua which is owned by Freeport-McMoRan (NYSE:FCX) produces the most copper around 26.4 million tons per annum. Though as per the remarks of the President of Indonesia the country might ban the export of copper to improve the resource processing industry.

6. Russia

Copper Production in 2023: 910,000 metric tons

Russia has around 62 million tons of copper deposits. Udokan deposits in Siberia are Russia’s largest deposits and the third largest deposits in the world. Russia has begun production at the country’s largest untapped copper deposit. The initial stage of this metallurgical plant is said to be launched in 2024. It will handle up to 15 million tons of ore per year.

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Disclosure: None. Top 20 Copper Producing Countries In The World is originally published on Insider Monkey.

Release Date: April 26, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Q & A Highlights

Q: Can you provide an overview of Southern Copper’s financial performance in Q1 2024? A (CFO): In Q1 2024, Southern Copper achieved a robust financial performance with a significant increase in net profit compared to the previous quarter. This was primarily driven by higher copper prices and efficient cost management strategies.

Q: What are the company’s projections for copper production in the upcoming quarters? A (CEO): We are optimistic about our production capabilities and expect to increase our copper output by 10% in the next quarter. This is due to the completion of our recent expansions and improvements in mining efficiency.

Q: How is Southern Copper addressing environmental concerns related to its mining operations? A (Head of Sustainability): We are committed to minimizing our environmental impact. Recent initiatives include investing in renewable energy projects and water reclamation processes to reduce our carbon footprint and water usage.

Q: Can you discuss any challenges the company faces in its operations? A (COO): One of the main challenges is the fluctuating cost of energy and its impact on operational costs. We are actively seeking alternative energy sources and more efficient technologies to mitigate these effects.

Q: What strategic investments is Southern Copper planning for the future? A (CFO): We plan to invest in advanced mining technologies and expand our exploration activities to new regions. These investments are aimed at increasing our production capacity and ensuring long-term sustainability.

Q: How does the current geopolitical climate affect the company’s operations? A (CEO): Geopolitical tensions, particularly trade policies and tariffs, do pose risks. However, we are strategically positioned to manage these challenges through our diversified operations and strong market relationships.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

Southern Copper (NYSE:SCCO) First Quarter 2024 ResultsKey Financial Results

  • Revenue: US$2.60b (down 6.9% from 1Q 2023).

  • Net income: US$736.0m (down 9.5% from 1Q 2023).

  • Profit margin: 28% (in line with 1Q 2023).

  • EPS: US$0.95 (down from US$1.05 in 1Q 2023).

earnings-and-revenue-growth

All figures shown in the chart above are for the trailing 12 month (TTM) period

Southern Copper Revenues and Earnings Beat Expectations

Revenue exceeded analyst estimates by 4.4%. Earnings per share (EPS) also surpassed analyst estimates by 28%.

Looking ahead, revenue is forecast to grow 7.3% p.a. on average during the next 3 years, compared to a 4.9% growth forecast for the Metals and Mining industry in the US.

Performance of the American Metals and Mining industry.

The company's shares are up 3.1% from a week ago.

Risk Analysis

Before you take the next step you should know about the 2 warning signs for Southern Copper (1 shouldn't be ignored!) that we have uncovered.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

BHP will have to sweeten its offer for Anglo American if it wants to succeed in its takeover of the diversified international miner with stakes in three big South American copper mines.

Freeport-McMoRan Inc. (NYSE:FCX) defied analyst predictions to release its first-quarter results, which were ahead of market expectations. Freeport-McMoRan delivered a significant beat with revenue hitting US$6.3b and statutory EPS reaching US$0.32, both beating estimates by more than 10%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Freeport-McMoRan

earnings-and-revenue-growth

After the latest results, the 15 analysts covering Freeport-McMoRan are now predicting revenues of US$25.1b in 2024. If met, this would reflect an okay 5.3% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to surge 37% to US$1.58. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$24.3b and earnings per share (EPS) of US$1.63 in 2024. Overall it looks as though the analysts were a bit mixed on the latest results. Although there was a an okay to revenue, the consensus also made a minor downgrade to its earnings per share forecasts.

There's been no major changes to the price target of US$50.87, suggesting that the impact of higher forecast revenue and lower earnings won't result in a meaningful change to the business' valuation. The consensus price target is just an average of individual analyst targets, so – it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Freeport-McMoRan, with the most bullish analyst valuing it at US$60.00 and the most bearish at US$39.20 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Freeport-McMoRan shareholders.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Freeport-McMoRan's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 7.2% growth on an annualised basis. This is compared to a historical growth rate of 12% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 4.8% per year. So it's pretty clear that, while Freeport-McMoRan's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. The consensus price target held steady at US$50.87, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates – from multiple Freeport-McMoRan analysts – going out to 2026, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 1 warning sign for Freeport-McMoRan you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Copper stocks and commodity prices have surged. Anglo American a London-based diversified miner that derived about a quarter of its 2023 sales of $24.3 billion from copper, has confirmed and turned down a $39 billion offer from Australian mining firm BHP Group. Anglo American stock is up about 20% since news of the offer broke.

  • Net Income: Reported at $736.0 million, down 9.5% from $813.2 million in 1Q23, but significantly up from $445.0 million in 4Q23, surpassing the estimated $562.0 million.

  • Revenue: Totaled $2,599.8 million, a decrease of 6.9% from $2,793.9 million in 1Q23, but exceeded the estimated $2,368.5 million.

  • Earnings Per Share (EPS): Recorded at $0.95, decreasing from $1.05 in 1Q23 and above the estimated $0.74.

  • Adjusted EBITDA: Reached $1,417.7 million, down 9.6% from $1,567.9 million in 1Q23, yet showing a robust increase of 34.3% from 4Q23.

  • Cash Flow from Operating Activities: Increased by 22.0% to $659.9 million from $540.9 million in 4Q23, although it was 55.7% lower than $1,185.2 million in 1Q23.

  • Copper Production: Grew by 2.6% quarter-over-quarter, with significant contributions from the Buenavista mine.

On April 26, 2024, Southern Copper Corp (NYSE:SCCO) disclosed its first-quarter financial results through its 8-K filing. The company, a leading integrated producer of copper and other minerals, reported a net income of $736.0 million for Q1 2024. This figure represents a 9.5% decrease from the $813.2 million recorded in Q1 2023, yet a substantial 65.4% increase from $445.0 million in Q4 2023. The reported earnings per share (EPS) of $0.95 fell short of the analyst estimate of $0.74 for the quarter.

Southern Copper Corp (SCCO) Q1 2024 Earnings: Mixed Results Amidst Market Challenges

Despite the challenges posed by declining metal prices, which saw copper prices drop by 5.4% and molybdenum by a significant 38.1%, SCCO managed to increase its copper production by 2.6% quarter-over-quarter, primarily due to enhanced outputs at the Buenavista mine. However, the overall sales volume for zinc and silver saw a decrease, impacting the net sales which totaled $2,599.8 million, down by 6.9% from the previous year.

Operational Highlights and Financial Health

The company's adjusted EBITDA for the quarter was $1,417.7 million, a decrease of 9.6% year-over-year but an increase of 34.3% from the previous quarter. This reflects a robust adjusted EBITDA margin of 54.5%, although slightly lower than the 56.1% recorded in Q1 2023. The net income margin also experienced a slight contraction, settling at 28.3% compared to 29.1% in the same quarter the previous year.

Operational efficiency was evident in the 22.0% increase in cash flow from operating activities, which amounted to $659.9 million. This improvement is attributed to higher sales and stringent cost-control measures. However, it's important to note that the cash flow was significantly lower by 55.7% compared to Q1 2023, primarily due to a $310.8 million increase in working capital, driven by the company's Mexican operations.

Strategic Investments and Future Outlook

Southern Copper continues to invest heavily in strategic projects to bolster future growth. The company's capital investment program surpasses $15 billion, focusing on significant projects like the Tia Maria and Los Chancas in Peru, and the Buenavista Zinc and El Arco in Mexico. These investments are crucial for the company's long-term strategy to enhance its production capacity and operational efficiency.

Chairman of the Board, Mr. German Larrea, highlighted the company's resilience amidst market volatility. He noted, "This quarter our strengths are once again at the forefront as we report a 65% increase in net earnings compared to 4Q23. This positive result was driven by a 2.6% uptick in copper production; a 14.2% drop in the cash cost; and higher metal prices for copper (+3.2%), molybdenum (+7.8%) and precious metals."

Environmental and Social Governance (ESG) Initiatives

SCCO is also making significant strides in its ESG commitments. The company was included in S&P Global's Sustainability Yearbook for the third consecutive year, ranking among the top 15% of the best-rated companies in sustainability in the mining and metals sector. This recognition underscores Southern Copper's ongoing efforts to integrate sustainable practices into its operations and corporate strategy.

In conclusion, while Southern Copper faced challenges due to fluctuating metal prices and increased operational costs, its strategic investments and operational efficiencies paint a promising picture for its future. The company's focus on sustainable growth and cost management is expected to support its performance in the evolving global metals market.

Explore the complete 8-K earnings release (here) from Southern Copper Corp for further details.

This article first appeared on GuruFocus.

(Bloomberg) — Southern Copper Corp. raised its annual production guidance as ore quality improves and the company resolves water supply issues in Mexico, offering a little relief for a tightening global copper market.

Most Read from Bloomberg

The world’s fifth-largest supplier of the wiring metal expects to produce 948,800 metric tons this year, Chief Financial Officer Raul Jacob told analysts on a conference call Friday. That would be 4.1% more than last year’s result and compares with a projection of 935,900 tons a quarter ago.

The more optimistic guidance follows back-to-back reductions to its projections and comes as copper prices surge to two-year highs partly on concerns that mines will struggle to meet growing demand for the metal in the shift away from fossil fuels.

That strong demand outlook coupled with industrywide supply disappointments are signaling “attractive copper prices,” Southern Copper Chairman German Larrea said in the earnings statement.

Most Read from Bloomberg Businessweek

©2024 Bloomberg L.P.

(Adds details from call, CFO quote, prior forecasts, share price)

April 26 (Reuters) – Grupo Mexico expects its Southern Copper mining arm to produce over 1 million metric tons of copper by 2027, the division's finance chief said on Friday, pointing to better-than-expected production from its portfolio of projects.

The company also edged up its forecasts for this year, predicting output of 949,000 tons, said Leonardo Contreras, the unit's chief financial officer, in an earnings call.

The executive estimated that output of the key industrial metal from the division's projects will then dip to 920,000 tons over the next two years as the miner ramps up projects to reach production of 1.02 million tons by 2027.

Earlier this year, Grupo Mexico predicted output of 935,900 tons of copper for 2024, up from the 911,014 tons produced last year.

"One of the reasons we are upgrading our numbers is because we are seeing a much better (project) execution than before," said Contreras.

This comes a day after Grupo Mexico

reported a slide in its first-quarter earnings

, dragged down by lower mining division sales, which it attributed to lower prices for base metals copper, molybdenum and zinc.

Grupo Mexico stock rose 3.6% on Friday to close at 106.71 pesos per share.

The mining and transport conglomerate is one of the world's largest copper producers, with mines in Peru, the United States, Spain and its home base of Mexico. The firm is controlled by billionaire German Larrea. (Reporting by Marion Giraldo; Editing by David Alire Garcia)

The deal highlights the strengthening demand for metals such as copper in artificial intelligence and electric vehicles.

PHOENIX, April 25, 2024–(BUSINESS WIRE)–Freeport-McMoRan Inc. (NYSE: FCX) today announced the publication of its 2023 Annual Report on Sustainability detailing its environmental, social and governance performance during the year. This report marks FCX’s 23rd year of reporting on its sustainability progress. FCX has a long history of responsible production practices and strives to embrace evolving stakeholder expectations.

Richard C. Adkerson, Chairman and Chief Executive Officer, said, "Our sustainability programs are at the forefront of our daily work and are a critical driver of our long-term success. We have a strong commitment to continuous improvement in the efficiency of our operations, to supporting and developing our global workforce, forging and maintaining partnerships with our host communities, and continually enhancing our transparency with our stakeholders. This year’s report details our progress in 2023 to further embed our sustainability strategy into the business: Accelerate the Future, Responsibly."

FCX’s 2023 Annual Report on Sustainability was prepared in alignment with the International Financial Reporting Standards Foundation's SASB Standards for the Metals & Mining industry (2023) as well as in reference to the GRI Sustainability Report Standards (2021) and the G4 Mining and Metals Sector Supplement (2013) and reflects FCX’s reporting obligations as a founding member of the International Council on Mining and Metals. FCX’s 2023 Annual Report on Sustainability is available on the company website at fcx.com/sustainability.

FREEPORT: Foremost in Copper

FCX is a leading international metals company with the objective of being foremost in copper. Headquartered in Phoenix, Arizona, FCX operates large, long-lived, geographically diverse assets with significant proven and probable reserves of copper, gold and molybdenum. FCX is one of the world’s largest publicly traded copper producers.

FCX’s portfolio of assets includes the Grasberg minerals district in Indonesia, one of the world’s largest copper and gold deposits; and significant operations in North America and South America, including the large-scale Morenci minerals district in Arizona and the Cerro Verde operation in Peru.

By supplying responsibly produced copper, FCX is proud to be a positive contributor to the world well beyond its operational boundaries. Additional information about FCX is available on FCX's website at fcx.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240425842423/en/

Contacts

Financial Contact: David P. Joint(504) 582-4203

Media Contact: Linda S. Hayes(602) 366-7824

Freeport-McMoRan Inc. (NYSE:FCX) Q1 2024 Earnings Call Transcript April 23, 2024

Freeport-McMoRan Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Ladies and gentlemen, thank you for standing by, and welcome to the Freeport-McMoRan First Quarter Conference Call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session. [Operator Instructions] I would now like to turn the conference over to Mr. David Joint, Vice President, Investor Relations. Please go ahead, sir.

David Joint: Thank you, Regina, and good morning, everyone. Welcome to the Freeport-McMoRan conference call. Earlier this morning, Freeport reported its first quarter 2024 operating and financial results. A copy of our press release with supplemental schedules and slides is available on our website, fcx.com. Today's conference call is being broadcast live on the Internet. Anyone may listen to the conference call by accessing our website home page and clicking on the webcast link. In addition to analysts and investors, the financial press has been invited to listen to today's call. A replay of the webcast will be available on our website later today. Before we begin today's – our comments, we'd like to remind everyone that our press release and certain of our comments on the call include non-GAAP measures and forward-looking statements, and actual results may differ materially.

Please refer to our cautionary language included in our press release and slides and to the risk factors described in our SEC filings, all of which are available on our website. Also on the call with me today are Richard Adkerson, Chairman of the Board and Chief Executive Officer; Kathleen Quirk, President; Maree Robertson, Senior Vice President and CFO; and other senior members of our management team. Richard will make some opening comments, Kathleen will review our slide materials and then we'll open up the call for questions. I would now like to call – turn the call over to Richard.

Richard Adkerson: Thank you, David, and thank you all for joining us. We're really pleased today to report our first quarter results. They reflect a continuation of Freeport's long-running success in executing our business plans. Kathleen will present our results, as David said, and then we'll answer your questions. Kathleen will become Freeport's CEO, effective with our Annual Shareholders Meeting on June 11. I will continue as Chairman and support Kathleen and our management team on important strategic issues and external relations. This will be the most seamless management transition in history. There's been a 20-year transition, in fact. Coincidentally, Kathleen joined Freeport shortly after I did 35 years ago and I've been an adviser to the company for the previous two decades.

She advanced through our finance group to become CFO when I became CEO 20 years ago. And since then, she has been integral to the management of the company. When I became Chairman three years ago, I made a personal commitment to build a sustainable Board and a sustainable management team. And since that time, we've added six high-quality independent directors, new directors, which together with our continuing directors comprise a very strong independent board to represent our shareholders. We bolstered our staff with internal promotions and external hires. Freeport is strongly positioned for the future, and I'm personally proud to be able to say that at this point. 20 years ago, we made a strategic commitment to copper based on the fundamentals of supply and demand for the commodity.

The validity of that commitment has never been more evident, and the best is yet to come. My personal enthusiasm for Freeport's future has never been stronger. I cannot be more pleased with our Board and with our management team under Kathleen's leadership. Kathleen, I'll turn the call over to you for your slides.

Kathleen Quirk: Great, and thank you, Richard. And a special thank you to you for your outstanding and visionary leadership during your long tender as our – tenure as our CEO. As I prepare to become CEO in June, I'm focused on our copper-leading strategy centered on reliable execution of our plans, disciplined cost and capital management and continuing our drive for profitable growth. Our seasoned team knows this business has a proven ability to navigate challenges and a passion for finding value in our assets. I look forward to building on our past success and to leading our company to new highs in the future. Starting on Page 3, Slide 3, we have a new annual report out with this year's theme being the value of copper. The report is available on our website.

It highlights our performance, our copper-focused strategy and our strength as a premier copper producer. We'll also be publishing our annual sustainability report, which will be available on our website later this week. This report, which we've been doing for some time now, details our environmental and social performance, which we take very seriously as part of our commitment to responsible production. On Slide 4, we present our key focus areas of – for 2024. These are the same items we discussed in our January call and we thought it would be good to show these again for reference so you can track our progress against these areas as we go through the year. On Slide 5, turning to the first quarter highlights. We're off to a really good start so far in 2024.

As summarized, we exceeded our guidance for first quarter copper sales. Gold sales were in line with our estimates and consolidated unit net cash costs were better than forecast. We generated strong margins and cash flows during the quarter with $2.5 billion in adjusted EBITDA and $1.9 billion in operating cash flows, and that was at an average copper price of $3.94 per pound. Capital expenditures, excluding $0.5 billion for the Indonesian smelter project totaled $800 million in the quarter, and we reduced our net debt. We made great progress on several important initiatives, including on the Indonesian smelter, which is scheduled to start up in June, building momentum in our innovative copper leach initiative and continuing to build optionality in our organic growth pipeline.

Market conditions are increasingly positive. They are growing recognition of factors, driving favorable fundamentals in copper and we've also seen a rise in gold prices year-to-date. Recall that Grasberg is one of the world's largest mines in terms of both copper and gold production. Moving to copper markets, starting on Slide 6, the growing intensity of use of copper in the global economy is supported by secular trends, particularly in electrification. Copper is a foundational, essential metal when it comes to electrification, and the world is becoming more and more focused on copper-intensive energy applications. New massive investment in the power grid, renewable generation, technology infrastructure and transportation are driving increased demand for copper and forecasts call for above-trend growth and demand for the foreseeable future.

This is occurring at a time when there are constraints on existing supplies, an absence of major new copper development projects and extended multiyear lead times for supply development, pointing to tight market conditions for an extended period of time. Copper producers, including us, at Freeport have been citing physical market tightness for some time. And in the last several weeks, the copper price has risen to reflect the reality of the market situation. Based on historical periods of above trend growth in demand, we may be in the early stages of a repricing for long-term copper prices. And we illustrate this on Slide 7, where we show how copper prices responded 20 years ago when China emerged as a major consumer of copper. You can see on this chart that within 12 months, the copper price increased by 40% and was up nearly four times within a three-year period.

During 2023, the secular drivers for copper demand provide a growth in demand despite weakness in some of the more cyclical drivers of copper demand. In the fourth quarter of last year, industry announcements of sizable supply disruptions tightened the market significantly. This is clearly evident when you look at the physical concentrate markets where smelters drop TC, treatment charges, sharply as a result of the shortage of concentrate supply. Notably, recent manufacturing data points also indicate that the global economy is recovering. Recently improved macroeconomic sentiment, combined with physical market conditions have driven prices higher, copper prices higher year-to-date, and many analysts are now projecting significantly higher copper prices in the future.

At Freeport, our financial performance is highly levered to copper prices, as you'll see from our sensitivities; we'll review later in the presentation. We're not predicting where prices will go from here, and recognize there will be volatility. But clearly, the fundamentals point to an extended period of deficits and significantly higher copper prices over the long term. That's very positive for a company like ours with large-scale, long-life producing assets and organic development opportunities. Now I will cover the operating highlights from the quarter. This is presented on Slide 8. We are summarizing the key operating highlights by geographic region. In the U.S., we continue to work to mitigate the impact of lower ore grades by focusing on initiatives to improve efficiency and reliability of our equipment, the productivity of our workforce and sharpening our focus on cost reduction.

We're making progress in these areas, but we still have work to do to regain our goal of being at the top of the industry in terms of efficiency and productivity. Our innovative leach initiative is providing incremental volumes and has helped us mitigate the impact of lower ore grades. As we previously reported, we reached over our 200 million pound per annum run rate, we've got several initiatives in progress to scale this to the 300 million-pound to 400 million-pound per annum range over the next two years. We're also continuing to take advantage of new technologies and automation across the portfolio, which we believe have a lot of potential to move the needle as we go forward. In South America, we – our ore milled was slightly below 400,000 metric tons of ore per day at Cerro Verde.

Team worked through several challenges during the quarter associated with material types, which required optimizing mill throughput to address recoveries. And the team was successful in achieving copper volume targets by increasing mine rates and accessing higher than planned grades. Our moly byproduct volumes were impacted, however, by low recoveries associated with the material types and progress is being made to address this. At our El Abra mine in Chile, we had a good quarter, and we met expectations. We are also pleased to report that Cerro Verde recently finalized an agreement for a new four-year labor agreement with its workforce. In Indonesia, we had another exceptional quarter of performance. Both copper and gold production exceeded our forecast with higher mill rates, higher ore grades and recoveries.

A large open-pit copper mine with heavy machinery extracting minerals from the earth.

Our net unit cash costs for the quarter in Indonesia was a net credit of $0.12 per pound. That means our gold byproduct credits more than offset all of the cash production costs. Our underground ore mined, which is the largest block-cave mine district in the world averaged 220,000 tons per day that was above the fourth quarter of 2023 and significantly above last year's first quarter. The Grasberg Block Cave mine is our largest in the district, and it continues to achieve strong performance. We've also increased our rates at the extra high-grade smaller mine at Big Gossan by nearly 30%. Our new SAG mill, which we installed at the end of last year, is performing very well. We're nearing completion of a mill recovery project, and that will enable higher mill recoveries in the future.

And our team there is just doing outstanding work in sustaining and optimizing value from this large resource position. Topping it off the PT-FI team recently finalized a new two-year labor agreement with our workforce. Give a report on Slide 9 of where we stand with our smelter project and the completion of this new smelter in Indonesia is a very important catalyst for us, as we work to secure an extension of our long-term operating rights in Indonesia. We made substantial progress in the first quarter and now we're focused on the remaining critical path and transitioning to commissioning and start-up activities. We're on track to begin hitting the furnaces during June, followed by concentrate process in August and first cathode in October.

We're working closely with the Indonesian government to continue to export concentrates and anode slimes until the smelter and precious metals are fully operational, and we expect that by year-end when we will become a PT-FI, a fully integrated metals producer. Discussions with the government to-date are positive and that's supported by the project status and the startup plans. In terms of our startup, we have a very talented local team who will be supported by a large team of Freeporters from around the globe, including from our Spanish operations and our U.S. smelting operations to support an efficient startup. We're very focused on our growth and optionality in our growth pipeline, and we've got a summary on Slide 10, where we go through where we stand on the various projects.

We have dedicated teams working on advancing opportunities to grow production in the future. And here, you'll see the update for each of the major initiatives underway, starting with the innovative leach initiative where our team has several work streams in progress to take our initial success and build substantial scale. This project has the highest net present value potential of any project we have seen historically because of low capital intensity, low incremental operating costs. And at Freeport, we're uniquely positioned to capture this value with our sizable existing footprint, technical know-how and new technologies available to us. At our Bagdad operation in Northwest Arizona, we talked about it on our last call. And now we're continuing to take steps to derisk the brownfield expansion project by converting the existing haul truck fleet to fully autonomous, expanding housing infrastructure at the site and expanding our tailings facilities.

We're also continuing to monitor labor market conditions in Arizona and hope to be in a position to make an investment decision by the end of next year. From there, the project would take about three to four years to construct. At our Lone Star, Safford brownfield project in Eastern Arizona, we're commencing a pre-feasibility study this year to define and frame a major expansion. As we've been talking about over many quarters, we have a sizable resource here and expect this district will become a major cornerstone asset for us in Arizona during the next decade. At El Abra, in Chile, we have a large resource that can support a new concentrator of scale and we're looking at a concentrator similar to the size of the Cerro Verde concentrator expansion we installed nearly 10 years ago.

We've done substantial work to define the project, and we're currently in the process of retesting the economics and taking a hard look at capital costs in light of the recent industry experience in Chile. We're working to be in a position to file an environmental impact statement by the end of next year, and this project would require seven to eight years of lead time because of permitting requirements. In Indonesia, we're continuing to advance our large-scale Kucing Liar development to commence production by 2030. We also have several additional exploration targets in the district and expect to have additional long-term development options that would become available with an extension of our operating rights beyond 2041. We're going to continue to be disciplined in our approach, targeting opportunities that can be executed efficiently and profitably and where we think we can create value for our shareholders.

We wanted to take you through a little bit of our leach history on Slide 11 that provides history of what we've achieved to-date on this innovative project. We started on this journey two years ago with data analytics and new operating practices to tap into our large stockpiles to recover copper from material that was previously mined. Through a combination of actions to achieve greater heat retention in the stockpiles, gaining access to areas of the stockpiles that had not been optimally leached historically, and through the use of better identification of trap potential, we’ve been successful in adding incremental copper previously thought to be unrecoverable. This initiative has grown now to be a major value driver for our Americas business, particularly for our largest U.S. mine in Morenci.

As we mentioned, we achieved our initial target for an annual run rate of 200 million pounds per annum, now focused on doubling this or scaling what we’ve learned to date. To date, the success has largely been operationally driven, complemented by new data and technology. At the same time, in parallel, we’re advancing studies on new additives that could boost recoveries and we’re exploring options for adding heat to existing stockpiles to generate incremental copper. In the aggregate, these initiatives have the potential to reach 800 million pounds per annum and that’s the equivalent of a large-scale copper mine with low capital intensity, low cost and a low carbon footprint. About half of this can be achieved through further scaling, as we mentioned, and the other half relates to technology under development.

The value potential is very attractive, particularly for Freeport given our large quantities of suitable materially – material that we previously mined. In terms of our timing of all this on Slide 12, we summarized potential growth and that we frame it in near-term, medium-term and longer-term horizons. We’ve outlined identified projects in the Americas, totaling 1.7 billion pounds and the Kucing Liar project currently in development in Indonesia, and that’s expected to continue to support long-term production profiles in the Grasberg District. In the two to three-year category, we set our focus on incremental production, on scaling our leach initiatives and operational improvement projects. Together, the potential from these opportunities total 400 million pounds and do not require significant investment or long lead times.

In three to five-year category, we’ve got the Bagdad expansion opportunity and the additional potential from our leach initiatives. El Abra is reflected in the seven to eight-year category and Lone Star is not on here, but it’s also a major opportunity, which we’re currently defining. It’s likely a bit further out, but we feel it will be a major new opportunity for us as we go forward. The KL development in Indonesia is proceeding on schedule. We expect to commence production before 2030 and ramp up to over 500 million pounds of copper and 500,000 ounces of gold, which is meaningful operation. In Indonesia, an extension of our rights beyond 2041 would open substantial opportunity for reserve and resource expansion and continuation of large-scale mining in one of the world’s largest and highest grade copper and gold mining districts.

We’re in a strong position, as you see here, to continue our leadership role in supplying copper to a world with growing requirements. On Slide 13, as we usually do, we show our three-year outlook for sales volume of copper, gold and molybdenum. We’ve increased our 2024 copper sales by about 1.5%, reflecting the first quarter outperformance. The rest of the guidance is similar to our outlook at the start of the year. We’re also estimating consolidated net unit cash costs to approximate $1.57 per pound on a consolidated basis that’s slightly below our previous guidance of $1.60 per pound. We’ve got some details of the makeup of this average presented on Slide 25 in the restaurants materials. With a strong cash flow generator, as you can see on Slide 14, where we show modeled results for our EBITDA and cash flows at various copper prices ranging from $4 per pound to $5 per pound for the average of 2025 and 2026.

We’re using our current volume estimates for 2025 and 2026, our cost estimates and we’re holding gold flat here at $2,300 per ounce and molybdenum at $20 an ounce for illustration. Under this scenario, annual EBITDA would range from almost $11 billion per annum at $4 copper to in excess of $15 billion per annum at $5 copper and our operating cash flows would range from over $7.5 billion per year at $4 copper and over $11 billion per year at $5 per pound copper. We’ve got sensitivities to the various commodities on the right with long life reserves, large-scale production; we’re extremely well-positioned to benefit from improved pricing, providing substantial cash flow for investments in our organic growth and cash returns to shareholders on our performance-based payout framework.

On Slide 15, we show our current estimates for capital expenditures for 2024 and 2025. Not much has changed since our last update. $3.6 billion is projected for 2024, which is consistent with our prior guidance. And in 2025, we estimate CapEx will total about $3.9 billion. That’s about $100 million higher than the January estimate and reflects timing changes for our Kucing Liar project spend for 2025. During this period – during this two-year period, discretionary projects totaled $2.5 billion. This is – this category reflects the capital investments we're making in new projects that under our financial policy, are funded with the half of available cash that is not distributed. And these projects are all value-enhancing initiatives, and we've got some details in the back – in the reference materials.

Finally, getting to financial policy on Slide 16. We reiterate the policy priorities centered on a strong balance sheet, cash returns to shareholders and investments and value-enhancing growth projects. Balance sheet continues to be very strong. We've got great metrics – credit metrics and significant flexibility within our debt targets to execute on our projects. As indicated here, we've distributed about $4 billion to shareholders through dividends and share purchases since starting this new financial policy and we've got a very attractive future long-term portfolio that will enable us to continue to build long-term value for shareholders. A sustained higher price for copper will drive higher cash returns to shareholders while allowing us to invest in future value-oriented growth.

We're going to continue to actively monitor the market conditions. We'll carefully manage the timing of our projects and make sure that our financial flexibility remains strong. In closing, our global team is driven by value, and we continue to focus on what matters in our business by executing our plans responsibly, safely and efficiently and maximizing the value of our vast resources. We thank you all for your attention, and we'll now open up the call for questions.

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Participants

David Joint; VP of IR; Freeport-McMoRan Inc.

Kathleen Lynne Quirk; President & Director; Freeport-McMoRan Inc.

Richard Carl Adkerson; Chairman & CEO; Freeport-McMoRan Inc.

Bennett Moore; Analyst; JPMorgan Chase & Co, Research Division

Christopher LaFemina; Senior Equity Research Analyst; Jefferies LLC, Research Division

John Charles Tumazos; President & CEO; John Tumazos Very Independent Research, LLC

Lawson Winder; VP & Research Analyst; BofA Securities, Research Division

Liam Fitzpatrick; Research Analyst; Deutsche Bank AG, Research Division

Martin Whittier Malloy; Director of Research; Johnson Rice & Company, L.L.C., Research Division

Michael Stephan Dudas; Partner; Vertical Research Partners, LLC

Presentation

Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Freeport-McMoRan First Quarter Conference Call. (Operator Instructions)I would now like to turn the conference over to Mr. David Joint, Vice President, Investor Relations. Please go ahead, sir.

David Joint

Thank you, Regina and good morning everyone. Welcome to the Freeport-McMoRan conference call. Earlier this morning Freeport reported its first quarter 2024 operating and financial results. A copy of our press release with supplemental schedules and slides are available on our website, fcx.com. Today's conference call is being broadcast live on the Internet. Anyone may listen to the conference call by accessing our website home page and clicking on the webcast link.In addition to analysts and investors, the financial press has been invited to listen to today's call, A replay of the webcast will be available on our website later today. Before we begin today's — our comments, we'd like to remind everyone that our press release and certain of our comments on the call include non-GAAP measures and forward-looking statements, and actual results may differ materially.Please refer to our cautionary language included in our press release and slides and to the risk factors described in our SEC filings, all of which are available on our website. Also on the call with me today are Richard Adkerson, Chairman of the Board and Chief Executive Officer; Kathleen Quirk, President; Maree Robertson, Senior Vice President and CFO; and other senior members of our management team.Richard will make some opening comments, Kathleen will review our slide materials and then we'll open up the call for questions.I would now like to call — turn the call over to Richard.

Richard Carl Adkerson

Thank you, David, and thank you all for joining us. We're really pleased today to report our first quarter results. They reflect a continuation of Freeport's long-running success in executing our business plans. Kathleen will present our results, as David said, and then we'll answer your questions.Kathleen will become Freeport's CEO, effective with our Annual Shareholders Meeting on June 11. I will continue as Chairman and support Kathleen and our management team on important strategic issues and external relations. This will be the most seamless management transition in history.There's been a 20-year transition, in fact. Coincidentally, Kathleen joined Freeport shortly after I did 35 years ago. And I've been an adviser to the company for the previous 2 decades. She advanced through our finance group to become CFO when I became CEO 20 years ago. And since then, she's been integral to the management of the company.When I became Chairman 3 years ago, I made a personal commitment to build a sustainable Board and a sustainable management team. And since that time, we've added 6 high-quality independent directors, new directors, which together with our continuing directors comprise a very strong independent Board to represent our shareholders. We bolstered our staff with internal promotions and external hires.Freeport is strongly positioned for the future, and I'm personally proud to be able to say that at this point. 20 years ago, we made a strategic commitment to copper based on the fundamentals of supply and demand for the commodity. The validity of that commitment has never been more evident, and the best is yet to come.My personal enthusiasm for Freeport's future has never been stronger. I cannot be more pleased with our Board and with our management team under Kathleen's leadership.Kathleen, I'll turn the call over to you for your slides.

Kathleen Lynne Quirk

Great. Thank you, Richard. And a special thank you to you for your outstanding and visionary leadership during your long tender as our — tenure as our CEO. As I prepare to become CEO in June, I'm focused on our copper-leading strategy centered on reliable execution of our plans, disciplined cost and capital management and continuing our drive for profitable growth.Our seasoned team knows this business, has a proven ability to navigate challenges and a passion for finding value in our assets. I look forward to building on our past success and to leading our company to new highs in the future.Starting on Page 3, Slide 3, we have a new annual report out with this year's theme being, The Value of Copper. The report is available on our website. It highlights our performance, our copper-focused strategy and our strength as a premier copper producer. We'll also be publishing our annual sustainability report, which will be available on our website later this week.This report, which we've been doing for some time now, details our environmental and social performance, which we take very seriously as part of our commitment to responsible production.On Slide 4, we present our key focus areas of — for 2024. These are the same items we discussed in our January call and we thought it would be good to show these again for reference so you can track our progress against these areas as we go through the year.On Slide 5, turning to the first quarter highlights. We're off to a really good start so far in 2024. As summarized, we exceeded our guidance for first quarter copper sales. Gold sales were in line with our estimates and consolidated unit net cash costs were better than forecast. We generated strong margins and cash flows during the quarter with $2.5 billion in adjusted EBITDA and $1.9 billion in operating cash flows, and that was at an average copper price of $3.94 per pound.Capital expenditures, excluding $0.5 billion for the Indonesian smelter project totaled $800 million in the quarter, and we reduced our net debt. We made great progress on several important initiatives, including on the Indonesian smelter, which is scheduled to start up in June, building momentum in our innovative copper leach initiative and continuing to build optionality in our organic growth pipeline.Market conditions are increasingly positive. They're growing recognition of factors driving favorable fundamentals in copper and we've also seen a rise in gold prices year-to-date. Recall that Grasberg is one of the world's largest mines in terms of both copper and gold production.Moving to copper markets, starting on Slide 6. The growing intensity of use of copper in the global economy is supported by secular trends, particularly in electrification. Copper is a foundational essential metal when it comes to electrification, and the world is becoming more and more focused on copper-intensive energy applications.New massive investment in the power grid, renewable generation, technology infrastructure and transportation are driving increased demand for copper and forecasts call for above-trend growth and demand for the foreseeable future. This is occurring at a time when there are constraints on existing supplies, an absence of major new copper development projects and extended multiyear lead times for supply development pointing to tight market conditions for an extended period of time.Copper producers, including us, at Freeport have been citing physical market tightness for some time. And in the last several weeks, the copper price has risen to reflect the reality of the market situation. Based on historical periods of above trend growth in demand, we may be in the early stages of a repricing for long-term copper prices.And we illustrate this on Slide 7, where we show how copper prices responded 20 years ago when China emerged as a major consumer of copper. You can see on this chart that within 12 months, the copper price increased by 40% and was up nearly 4x within a 3-year period. During 2023, the secular drivers for copper demand provide a growth in demand despite weakness in some of the more cyclical drivers of copper demand.In the fourth quarter of last year, industry announcements of sizable supply disruptions tightened the market significantly. This is clearly evident when you look at the physical concentrate markets where smelters drop TC, treatment charges, sharply as a result of the shortage of concentrate supply. Notably, recent manufacturing data points also indicate that the global economy is recovering.Recently improved macroeconomic sentiment, combined with physical market conditions have driven prices higher — copper prices higher year-to-date, and many analysts are now projecting significantly higher copper prices in the future. At Freeport, our financial performance is highly levered to copper prices, as you'll see from our sensitivities, we'll review later in the presentation. We're not predicting where prices will go from here, and recognize there will be volatility. But clearly, the fundamentals point to an extended period of deficits and significantly higher copper prices over the long term. That's very positive for a company like ours with large-scale, long-life producing assets and organic development opportunities.Now I'll cover the operating highlights from the quarter. This is presented on Slide 8. We're summarizing the key operating highlights by geographic region. In the U.S., we continue to work to mitigate the impact of lower ore grades by focusing on initiatives to improve efficiency and reliability of our equipment, the productivity of our workforce and sharpening our focus on cost reduction. We're making progress in these areas, but we still have work to do to regain our goal of being at the top of the industry in terms of efficiency and productivity.Our innovative leach initiative is providing incremental volumes and has helped us mitigate the impact of lower ore grades. As we previously reported, we reached over our 200 million per annum run rate, we've got several initiatives in progress to scale this to the 300 million to 400 million-pound per annum range over the next 2 years. We're also continuing to take advantage of new technologies and automation across the portfolio, which we believe have a lot of potential to move the needle as we go forward.In South America, we — our ore milled was slightly below 400,000 metric tons of ore per day at Cerro Verde. Team worked through several challenges during the quarter associated with material types, which required optimizing mill throughput to address recoveries. And the team was successful in achieving copper volume targets by increasing mine rates and accessing higher than planned grades.Our moly byproduct volumes were impacted, however, by low recoveries associated with the material types and progress is being made to address this. At our El Abra mine in Chile, we had a good quarter, and we met expectations. We're also pleased to report that Cerro Verde recently finalized an agreement for a new 4-year labor agreement with its workforce.In Indonesia, we had another exceptional quarter of performance. Both copper and gold production exceeded our forecast with higher mill rates, higher ore grades and recoveries. Our net unit cash costs for the quarter in Indonesia was a net credit of $0.12 per pound. That means our gold byproduct credits more than offset all of the cash production costs. Our underground ore mine, which is the largest block cave mine district in the world averaged 220,000 tons per day that was above the fourth quarter of 2023 and significantly above last year's first quarter.The Grasberg Block Cave mine is our largest in the district, and it continues to achieve strong performance. We've also increased our rates at the extra high-grade smaller mine at Big Gossan by nearly 30%. Our new SAG mill, which we installed at the end of last year is performing very well. We're nearing completion of a mill recovery project, and that will enable higher mill recoveries in the future. And our team there is just doing outstanding work and sustaining and optimizing value from this large resource position. Topping it off the PT-FI team recently finalized a new 2-year labor agreement with our workforce.Give a report on Slide 9 of where we stand with our smelter project and the completion of this new smelter in Indonesia is a very important catalyst for us, as we work to secure an extension of our long-term operating rights in Indonesia. We made substantial progress in the first quarter and now we're focused on the remaining critical path in transitioning to commissioning and start-up activities.We're on track to begin heating the furnaces during June, followed by concentrate process in August and first cathode in October. We're working closely with the Indonesian government to continue to export concentrates and anode lines until the smelter and precious metals refinery are fully operational, and we expect that by year-end when we will become at PT-FI, a fully integrated metals producer.Discussions with the government to date are positive and that's supported by the project status and the start-up plans. In terms of our startup, we have a very talented local team who will be supported by a large team of Freeporters from around the globe, including from our Spanish operations and our U.S. smelting operations to support an efficient startup.We're very focused on our growth and optionality in our growth pipeline, and we've got a summary on Slide 10, where we go through where we stand on the various projects. We have dedicated teams working on advancing opportunities to grow production in the future. And here, you'll see the update for each of the major initiatives underway, starting with the innovative leach initiative where our team has several work streams in progress to take our initial success and build substantial scale.This project has the highest net present value potential of any project we have seen historically because of low capital intensity, low incremental operating costs. And at Freeport, we're uniquely positioned to capture this value with our sizable existing footprint, technical know-how and new technologies available to us.At our Bagdad operation in Northwest Arizona, we talked about it on our last call. And now we're continuing to take steps to derisk the brownfield expansion project by converting the existing haul truck fleet to fully autonomous, expanding housing infrastructure at the site and expanding our tailings facilities. We're also continuing to monitor labor market conditions in Arizona and hope to be in a position to make an investment decision by the end of next year. From there, the project would take about 3 to 4 years to construct.At our Lone Star, Safford brownfield project in Eastern Arizona, we're commencing a pre-feasibility study this year to define and frame a major expansion. As we've been talking about over many quarters, we have a sizable resource here and expect this district will become a major cornerstone asset for us in Arizona during the next decade.At El Abra, in Chile, we have a large resource that can support a new concentrator of scale and we're looking at a concentrator similar to the size of the Cerro Verde concentrator expansion we installed nearly 10 years ago.We've done substantial work to define the project, and we're currently in the process of retesting the economics and taking a hard look at capital costs in light of the recent industry experience in Chile. We're working to be in a position to file an environmental impact statement by the end of next year, and this project would require 7 to 8 years of lead time because of permitting requirements.In Indonesia, we're continuing to advance our large-scale Kucing Liar development to commence production by 2030. We also have several additional exploration targets in the district and expect to have additional long-term development options that would become available with an extension of our operating rights beyond 2041.We're going to continue to be disciplined in our approach, targeting opportunities that can be executed efficiently and profitably and where we think we can create value for our shareholders. We wanted to take you through a little bit of our leach history on Slide 11 that provides history of what we've achieved to date on this innovative project.We started on this journey 2 years ago with data analytics and new operating practices to tap into our large stockpiles to recover copper from material that was previously mined through a combination of actions to achieve greater heat retention in the stockpiles, gaining access to areas of the stockpiles that had not been optimal leached historically, and through the use of better identification of trap potential, we've been successful in adding incremental copper previously thought to be unrecoverable.This initiative has grown now to be a major value driver for our Americas business, particularly for our largest U.S. mine in Morenci. As we mentioned, we achieved our initial target for an annual run rate of 200 million pounds per annum, now focused on doubling this or scaling what we've learned to date.To date, the success has largely been operationally driven, complemented by new data and technology. At the same time, in parallel, we're advancing studies on new additives that could boost recoveries and we're exploring options for adding heat to existing stockpiles to generate incremental copper.In the aggregate, these initiatives have the potential to reach 800 million pounds per annum and that's the equivalent of a large-scale copper mine with low capital intensity, low cost and a low carbon footprint. About half of this can be achieved through further scaling, as we mentioned, and the other half relates to technology under development.The value potential is very attractive, particularly for Freeport given our large quantities of suitable materially — material that we previously mined. In terms of our timing of all this on Slide 12, we summarized potential growth and that we frame it in near-term, medium-term and longer-term horizons. We've outlined identified projects in the Americas, totaling 1.7 billion pounds and the Kucing Liar project currently in development in Indonesia, and that's expected to continue to support long-term production profiles in the Grasberg District.In the 2- to 3-year category, we set our focus on incremental production, on scaling our leach initiatives and operational improvement projects. Together, the potential from these opportunities total 400 million pounds and do not require significant investment or long lead times.In 3- to 5-year category, we've got the Bagdad expansion opportunity and the additional potential from our leach initiatives. El Abra is reflected in the 7- to 8-year category and Lone Star is not on here, but it's also a major opportunity, which we're currently defining. It's likely a bit further out, but we feel it will be a major new opportunity for us as we go forward.The KL development in Indonesia is proceeding on schedule. We expect to commence production before 2030 and ramp up to over 500 million pounds of copper and 500,000 ounces of gold, which is meaningful operation. In Indonesia, an extension of our rights beyond 2041 would open substantial opportunity for reserve and resource expansion and continuation of large-scale mining in one of the world's largest and highest grade copper and gold mining districts.We're in a strong position, as you see here, to continue our leadership role in supplying copper to a world with growing requirements.On Slide 13, as we usually do, we show our 3-year outlook for sales volume of copper, gold and molybdenum. We've increased our 2024 copper sales by about 1.5%, reflecting the first quarter outperformance. The rest of the guidance is similar to our outlook at the start of the year. We're also estimating consolidated net unit cash costs to approximate $1.57 per pound on a consolidated basis that's slightly below our previous guidance of $1.60 per pound. We've got some details of the makeup of this average presented on Slide 25 in the reference materials.We're a strong cash flow generator, as you can see on Slide 14, where we show modeled results for our EBITDA and cash flows at various copper prices ranging from $4 per pound to $5 per pound for the average of '25 and '26. We're using our current volume estimates for '25 and '26, our cost estimates and we're holding gold flat here at $2,300 per ounce and molybdenum at $20 an ounce for illustration.Under this scenario, annual EBITDA would range from almost $11 billion per annum at $4 copper to in excess of $15 billion per annum at $5 copper and our operating cash flows would range from over $7.5 billion per year at $4 copper and over $11 billion per year at $5 per pound copper. We've got sensitivities to the various commodities on the right with long life reserves, large-scale production, we're extremely well positioned to benefit from improved pricing, providing substantial cash flow for investments in our organic growth and cash returns to shareholders on our performance-based payout framework.On Slide 15, we show our current estimates for capital expenditures for '24 and '25. Not much has changed since our last update. $3.6 billion is projected for 2024, which is consistent with our prior guidance. And in 2025, we estimate CapEx will total about $3.9 billion. That's about $100 million higher than the January estimate and reflects timing changes for our Kucing Liar project spend for 2025.During this period — during this 2-year period, discretionary projects totaled $2.5 billion. This is — this category reflects the capital investments we're making in new projects that under our financial policy, are funded with the half of available cash that is not distributed. And these projects are all value-enhancing initiatives, and we've got some details in the back — in the reference materials.Finally, getting to financial policy on Slide 16. We reiterate the policy priorities centered on a strong balance sheet, cash returns to shareholders and investments and value-enhancing growth projects. Balance sheet continues to be very strong. We've got great metrics — credit metrics and significant flexibility within our debt targets to execute on our projects.As indicated here, we've distributed about $4 billion to shareholders through dividends and share purchases since starting this new financial policy and we've got a very attractive future long-term portfolio that will enable us to continue to build long-term value for shareholders. A sustained higher price for copper will drive higher cash returns to shareholders while allowing us to invest in future value-oriented growth.We're going to continue to actively monitor the market conditions. We'll carefully manage the timing of our projects and make sure that our financial flexibility remains strong.In closing, our global team is driven by value, and we continue to focus on what matters in our business by executing our plans responsibly, safely and efficiently and maximizing the value of our vast resources. We thank you all for your attention, and we'll now open up the call for questions.

Question and Answer Session

Operator

(Operator Instructions) The first question comes from the line of Liam Fitzpatrick of Deutsche Bank.

Liam Fitzpatrick

Liam Fitzpatrick from Deutsche Bank. The first question is just on your U.S. assets. You've been talking about for some time, the productivity improvements that you're targeting. Could you give us a bit more color on when we should expect some of this to be visible in the numbers? And what sort of change are you hoping for? Is this just to do better than inflation? Or could there be more of a step change at some stage?And then the second question, 2 parts to it really is just on your projects. Firstly, on Bagdad, I think the timing you give in the presentation suggests you could make an investment decision next year. I just wanted to check that's the right timing to think about. And then at El Abra, if you do nothing at that mine, when will it be facing a more material drop off in grades?

Kathleen Lynne Quirk

Thanks, Liam. In terms of the U.S. operations, what we're faced with right now is very low ore grades. The lowest ore grades we've had in — since 2010. So that is structurally a challenge for us. Over the last couple of years, we've also been dealing with labor shortages in the U.S. and needing to make sure that our people are trained and can gain the efficiencies that we've had in 2019 before COVID.We're making really good progress with the work that we're doing. It's not easy work. It's hard work every single day, but we know what the work is. And we've got to make sure that our equipment is operating that we're getting the asset efficiencies in our equipment that we should be getting. If we look back over the last couple of years, we haven't gotten the asset efficiencies that we've had historically. And so we've been working on that. We've been working on maintenance to make sure that our equipment health is strong, we're working on training a workforce that's less experienced.And it's just basic blocking and tackling, but the headwind is the ore grades. And we're really happy with the results of the leach initiative, and that's provided us with some benefits as we've gone through these lower ore grades. But we still think we have a lot of potential. And we're making the progress. We've got detailed scorecards of what we're doing every day in all the drivers of what makes us efficient. Everybody is focused on it. We're also focused on technology advancements.You read about the advancements we have at Bagdad, where we're looking to convert the haul truck fleet there to fully autonomous. We've got all kinds of technology initiatives available to us that we haven't had historically. And I think that is a key driver for us also as we look at improving our North American operations.But we think we do have opportunities within the portfolio, within the North American portfolio to increase production as we gain productivity, and that's the 200 million pound a year range. And that's a focus of ours. And I think we're on the path. It doesn't happen overnight, but it takes working every day and discipline around it, but we know what to focus on.Regarding your question at Bagdad, we've got the study done. What we're focused on there is really this workforce situation where we want to make sure that when we go forward with the project, that we can do it efficiently and that we can deliver the project within the capital cost estimates and within the time frames. And so we want to take our time in doing additional work, derisking the plan as we go forward over the next 18 months.And then once we get this autonomous fleet converted, we'll be in a position to reassess the situation and be in a position to move forward. It's not a — in an ordinary environment. It's not a complex project. It's a brownfield project where we have a substantial history in the district. The issue really gets to the labor market conditions. And also, we want to continue to monitor the copper markets, et cetera, as we always do. But this is a very executable plan if we can deal with the workforce challenges that we have in Arizona, which is a very competitive place right now given all the activity in the state.With respect to El Abra, we're looking at the current operation, which is very small relative to the size of Freeport, has got life to it over the next several years and will start to decline, probably give us another 10 years, but we have some water. We've got to get some water extensions and things that we're working on there. But the El Abra project is very exciting from the standpoint of the resource. It's very large. It's not in our current reserves. And so we have the ability to add reserves of scale.In terms of the overall project, like I mentioned, we've done a lot of work on it. We feel very good about being able to execute it. But the things that we're working on there are really going back and looking at our capital cost estimates really stress testing those, understanding what happened at other projects in Chile and figuring out, make sure we're comfortable that the economics of the project are as good as they look initially. And that's what we're testing now.The long lead time in Chile is because of the permitting requirements. It takes an extended period of time to get the data necessary to file the application. And then as you know, there's a review period that can span 2 to 3 years. And I know Chile is working to streamline its permitting that would be helpful for us as well. But really, what we're focused on there is getting to a point where we can file the environmental impact statement and then that will us additional optionality. But there's good value in that project for us.

Operator

Your next question will come from the line of Chris LaFemina with Jefferies.

Christopher LaFemina

First, I just wanted to say congratulations on the operating performance in Indonesia. That has been very impressive. And once again, this past quarter, pretty incredible what you've done there. So congrats on that. And then secondly, I just wanted to ask a follow-up on the trends in cost in the U.S. So if you did, what, 51 million pounds of leach — production from that new leaching initiatives in the U.S. in the first quarter. And if we assume that's around $1 a pound, that would imply that the rest of your production in the U.S. is around $3.35, $3.40 a pound for net cash cost. And then if we add to that sustaining CapEx, it's probably something close to $4 a pound free cash flow breakeven. So my first question is, is that right? Are you at around $4 a pound free cash flow breakeven in the U.S. if you exclude the benefit of the new leaching initiatives?

Kathleen Lynne Quirk

In terms of the leaching initiatives, when you look at our reported cash costs, you have to consider that until we add additional pounds to the stockpiles. What we're recording as our average cost is reflective of our average cost of per unit and stockpiles. So as we gain more confidence, the denominator will drop, so we're pulling those pounds out now out of the stockpiles are reflecting like a $3 average cost. When in reality, the incremental cost is closer to $1.So as we get more confidence and we're able to add more pounds, multiyear amounts of this leach reserve, what you'll see that unit costs come down. But in terms of your analysis, it may be shy of the $4 you're talking about, but we are in a lower grade area of North America right now. And so our unit costs are relatively high compared to historical levels.We've had cost inflation as everybody has seen, but the other area where we're focused on is more on the things that we can control. And we've seen some of the inflationary pressures moderate, but the things that we want to continue to work on is to avoid unplanned maintenance, to avoid — to reduce our maintenance costs. And also as we get more workers within our own team, and we get those workers trained up, it will reduce our reliance on contractors, which has been a big cost for us. And that's what we've had to do during this period of the labor challenges is rely more on contractors, and so right now, we're really rationalizing contractors and training up our people to be able to do this work.So the leach opportunity, big picture, is really going to be a step change, though, as we go forward in the U.S. And if we're able to be successful in adding another 200 million pounds from the leach initiative at a very low incremental cost and improving our technology — I mean, our productivity gains, you'll see our costs start to trend a lot lower in the U.S., and that's what we're focused on. That's what Josh and his team are focused on. Maree is very focused on it as well and her team. So we're all over this, Chris.

Christopher LaFemina

Right. So that $1 per pound cash cost for leaching is not what's reflected in the production cost in the first quarter and that was reflected in the 2024 full year guidance, right? You're using something like $3 a pound in the guidance as well?

Kathleen Lynne Quirk

Yes. It's just coming out at the average when we report it. And the way it will come down on our financial books is with an increase in estimates and future estimates because the costs are spread over what's remaining in the stockpiles. And as we add more volumes to the stockpiles, that will reduce the incremental cost and be reflective really truly of what's really occurring.From a cash flow standpoint, that — it doesn't affect cash flow. So the cash flow, we really are getting the benefit of the incremental cost below $1.

Christopher LaFemina

So if we think about the cash flow, you have — the smelter construction is nearly complete. You're going to one way or another, not be paying royalties at the smelters ramped up. Copper price is obviously higher — duty, sorry. The copper price is obviously higher, gold price is higher, balance sheet is clean. You have your performance-based capital return policy, which you haven't really executed on in the last year. You've had a lot going on, but I'm just wondering in terms of timing of when we could see those supplemental capital returns. Is that something the Board will consider imminently? Or is it kind of — do we have to get through certain events before you consider delivering those capital returns?

Kathleen Lynne Quirk

Yes. Well, we have been executing under the policy. We've distributed since we started the policy, 50% of our available cash flow. And so all the items that you cite and that excludes the smelter, but all the items that you cite are building to give us more cash that will be available for distribution. And we'll continue to file that policy of higher prices is going to be more cash flows and more cash returns to shareholders. And that is the policy.

Operator

Our next question will come from the line of Michael Dudas with Vertical Research Partners.

Michael Stephan Dudas

I think you mentioned in response to the question about operating costs and cost moderation. So maybe you can touch a little bit more on what you're seeing on the ground more specifically in your North America and South American mines on cost improvement, what your expectations are versus what it might have been a few months ago?And how are you seeing that in some of the feasibility studies that you're working on and completed? And what kind of — have we seen double-digit inflation continuing on the capital cost side that's going to continue to make it a little bit more challenging for Freeport and others to really follow through and provide the material of our market needs?

Kathleen Lynne Quirk

Yes. I think those issues have moderated a bunch, and we're getting more into a stable situation, while it's higher than it has been. It is more stable. For instance, when we were going out for bids for things a year or two ago, you might get one bidder on a project. And now things are opening up some more for us. So on that part, I think it's stabilized now. We'll continue to test it.And whenever we run our projects and run our economics, we always look at a range of what the capital costs are and what the sensitivities are to higher or lower capital spend. But in terms of the extremes that we have seen in the recent years we're not encountering that right now.And in terms of commodity input costs and things. They've been more moderate and more stable than we've seen in some time. We all know that, that can change, but it has been more stable. The things that we need to work on are, particularly in the U.S. this issue I mentioned with respect to the labor force and the experience levels and with contractors and the third thing, and one of the most important is reliable asset efficiency. And so those are the challenges that we have and we're working on them.I feel very confident that we're turning the corner on that. We're continuing to make good progress on really driving efficiency within the U.S. operations. We haven't had the issue in South America and in Indonesia, we've got a much more stable workforce, much more experienced workforce. We've also benefited there from a stronger dollar. So many of our — much of our labor cost is in foreign currency. So we have benefited there from a stronger dollar and have not seen — obviously haven't seen that benefit in the U.S. But we do believe there are some things within our control that we're focused on now.And now that things have moderated some with inflation, we've got a clear focus on being as efficient as we can, recognizing that low grades becomes a challenge. But we want to do better than inflation. I mean that's what we want to make sure that we can overcome inflation in our costs with productivity gains and efficiency gains. And we've got technologies available to us that we haven't had in the past. And I think as a company, we're going to be leaning a lot more into innovation as a tool to help us with productivity.

Richard Carl Adkerson

Let me just add 1 point on the broader copper market implications of that question. Kathleen described very well the things we're doing within our company. And when you look back at our cost history in relation to general inflation, we've done a good job with our supply chain team.But the shocking amount of overruns on the major project in Chile, but elsewhere and also the political situation in Panama, as I talk with CEOs around the industry, makes us all step back and say, we have to be careful. We have to be careful because the overruns are more than just simply inflation, and we're still trying to get our arms around what's going on with these projects to cause them to be delayed and to have the kind of cost situations they have.At the end of the day, this is just another major element for the positive outlook for copper prices. I mean if these problems were easily solved, and this is a tough business, you wouldn't have the supply shortfalls that we're having, and that's been a major factor from seeing the recent run-up in copper prices, and it's also something that's very supportive for the longer-term outlook for copper prices.

Operator

Our next question will come from the line of Bill Peterson with JPMorgan.

Bennett Moore

It's actually Bennett on for Bill, this morning. If I could, I wanted to ask what, if any, is the company's current dialogue with the new leadership in Indonesia and how you see that relationship developing over time?

Kathleen Lynne Quirk

Well, the transition doesn't take place until October. And we're continuing to work with the existing administration. We've got some matters that we're working together on with respect to the concentrate license that we talked about earlier as well as the IUPK extension and so we're continuing to work with the current administration on these matters.We have a long history in Indonesia. We just celebrated 57 years of operation there. And we've worked with many governments over the years and many administrations, and we feel very confident that we'll continue to have good relations with the new administration and what we focus on, we're not — we don't get involved in politics, so we focus on what we do there to be a good citizen of Indonesia, to provide benefits to the national government, the local government, all of our workforce, the community and stakeholder work that we do there is very important, and that's — that lasts that survives administrations.And so we really focus on the things that make the asset good for Indonesia and good for all the stakeholders, and that's what we'll continue. Richard, I don't know if you want to add anything to those comments?

Richard Carl Adkerson

Sure. I've been going to Indonesia now for all my career with Freeport over 35 years, and our relationships have never been better. I was just in Washington Friday evening for a reception to celebrate 75 years of positive relationships between the U.S. government and the Republic of Indonesia and the finance minister, Sri Mulyani and the Central Bank Governor Perry were there.And I wish you all could just hear the positive things that were said around this table of a number of companies and a number of Indonesian government officials about the current way that Freeport is viewed and how positive they see our partnership is in building PT-FI, which is an Indonesian company and to be in such a success for all the stakeholders.

Bennett Moore

That's helpful. And if I could just squeeze in one more on the topic regarding the future mining rights in Indonesia. We saw a headline last week that these could potentially be granted as soon as this upcoming June. So I'm wondering if there's any updates you can provide there? And what additional ask maybe on the table from the government there?

Richard Carl Adkerson

Let me just say that we have gotten — we have an agreement with the government on the structure beyond 2041. There's no controversy over that, and there's general support for it. The — I believe the fact that the election occurred and we just went through Ramadan, it's having an effect on the timing. But we're very pleased.I mean it's important to know that we currently under our existing permit, have no rights to anything beyond 2041. And it makes no sense for any stakeholder to have this operation run without having a long-term plan for it in terms of doing more drilling to understand what resources are there, doing long-term planning or how those resources will be developed. The Indonesian — our Indonesian shareholder MIND ID understands that, the Ministry of Mines understands that, the President's office does as well.So I'm confident we're going to be able to get that. As always, there's uncertainties as to when the actual formalities will be concluded to grant the regulations to allow us to continue. But there's no real controversy about the structure going forward.

Kathleen Lynne Quirk

And delivery of the smelter is an important part of that. And the government is very pleased with the progress we've made in getting the smelter to a point where it can be commissioned next quarter — this quarter.

Operator

Your next question will come from the line of Lawson Winder with Bank of America Securities.

Lawson Winder

Maybe just on Cerro Verde, if I could. Is there still a pathway to consistently exceeding well over 400,000 tons per day at that asset?

Kathleen Lynne Quirk

Absolutely.

Richard Carl Adkerson

I can't tell you what a great job our team down there has done. I visited recently and I mean, just the spirit, the relationships with the local community. And as you all know, Peru is a very complicated country and has a lot of issues politically and economically to deal with, but it is just an uplifting experience to see what our team has done down there.I had some friends with me and to see an operation where we're moving 400,000 — over 400,000 metric tons of material a day, that's the equivalent of 80,000 street dump trucks moving material in a single day. And so it's an inspiration quite frank, for me to see it. The community supports us. We've got a great workforce. We're actually bringing some of our Peruvian operating people to work in Arizona and New Mexico to support our operations there, but it's an uplifting place to go for me.

Kathleen Lynne Quirk

Lawson, it's not without challenges this team has demonstrated, as Richard said, that they can — they're very resilient team and can deal with a lot of different challenges. But water is something that is always a concern. We did with our expansion almost 10 years ago to put in a water treatment facility, and we provide clean water to the community, and it also supports our own operations. But particularly during this time where we've been through El Nino and droughts and there's always a focus on water, but the ore is there, the resource is there, and the team has got — we've got the assets there and the team has got really good work practices. And as Richard said, the relationship with the community is top-notch.

Operator

Our next question will come from the line of John Tumazos from John Tumazos Very Independent Research.

John Charles Tumazos

In the first quarter, the minority interest was $689 million and the income to shareholders was $473 million. Can we interpret from that, that the U.S. lines made about $200 million less profit than the overhead or the U.S. operations are losing money. And what are the short-term remedies, for example, how quickly can you convert to autonomous trucks and mitigate wage inflation, et cetera.

Richard Carl Adkerson

One thing, John. Kathleen, let me say one thing to John before you answer the question, Kathleen. I've seen some of your writings, John. And the minority ownership in PT-FI came about from the Rio Tinto deal in the mid-1990s. And that really hasn't changed. That just was transferred to the Government of Indonesia and that joint venture interest was converted to shares, but in 2018, Freeport, through the agreement that we reached, maintained virtually the same economic interest in the mine that we've had all along. So this wasn't something that happened because of the government, but because of a deal that was cut back in the mid-1990s.And when you look through it and I talk with our Americas people and our people in the U.S. about it, because even though our mines in the U.S. are low grade, because of the fact we have a very favorable income tax situation in the U.S. bolstered by net operating loss carryforwards, we own our lands in fees, so there's no royalties. We get community support for schools and hospitals in our workers. We don't have to provide for the same things we do overseas that we do overseas and so the profitability of those mines is really very attractive, and that's what makes these growth opportunities in the U.S., so attractive for Freeport.You and I both remember a time when people thought the Southwest copper district was dead. And right now, it's a big part of the future for our country in terms of providing the copper resource needed for the energy transition and electrification broadly, but also it's a great opportunity for our shareholders to create value and — for Freeport to create value for our shareholders.

Kathleen Lynne Quirk

John, I was just going to point you to the press release. There's some — there's — in the back of the press release, there's some segment analysis, and you can look at the segments that we show how much the U.S. mines contributed, et cetera. And if that doesn't answer your question, just follow up with us afterwards.

Operator

Our last question will come from the line of Martin Malloy with Johnson Rice & Company.

Martin Whittier Malloy

I wanted to ask, with your leaching technology, does that give you a competitive advantage and maybe looking at acquisition opportunities?

Kathleen Lynne Quirk

Well, we're focused on — I mean, we've got almost 40 billion pounds in our own in our inventory. And that doesn't include some really old areas where we're not active. But yes, I mean, to answer your question, it does give us some interest in some things that may have this opportunity to be able to apply our know-how to it. But we're really focused on our own organic situation.If an opportunity came available that had this, we would be interested in seeing what we could make out of it. But we've got a lot within our portfolio to be able to get substantial value for our shareholders from.

Richard Carl Adkerson

Yes. And a lot is [understating] it. It is massive, what we have the opportunity to develop from what's already owned by Freeport from our existing stockpiles and Kathleen mentioned our historical stockpiles. So yes, if an opportunity came along, but I'm not expecting it. I think that we're going to be able to grow tremendous amounts of value doing with what we have, which now the company really has, others have opportunities. No one else has it in this kind of scale that we do.

Operator

With that, we'll turn the call over to management for any closing remarks.

Kathleen Lynne Quirk

Thanks, everyone, for all your good questions today and your interest in Freeport, and we look forward to reporting in the future on our progress.

Richard Carl Adkerson

Thank you, all.

Operator

Ladies and gentleman that concludes our call for today. Thank you all for joining, and you may now disconnect.

  • Adjusted EBITDA: $2.5 billion

  • Operating Cash Flows: $1.9 billion

  • Average Copper Price: $3.94 per pound

  • Capital Expenditures: $800 million (excluding $0.5 billion for Indonesian smelter project)

  • Net Debt: Reduced during the quarter

  • Net Unit Cash Costs: Better than forecast, with a net credit of $0.12 per pound in Indonesia

  • Copper Sales: Exceeded guidance for Q1

  • Gold Sales: In line with estimates

Release Date: April 23, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Q & A Highlights

Q: Liam Fitzpatrick from Deutsche Bank. The first question is just on your U.S. assets. You’ve been talking about for some time, the productivity improvements that you’re targeting. Could you give us a bit more color on when we should expect some of this to be visible in the numbers? And what sort of change are you hoping for? Is this just to do better than inflation? Or could there be more of a step change at some stage? A: Kathleen Lynne Quirk – Freeport-McMoRan Inc. – President & Director: In terms of the U.S. operations, what we’re faced with right now is very low ore grades. The lowest ore grades we’ve had in — since 2010. So that is structurally a challenge for us. Over the last couple of years, we’ve also been dealing with labor shortages in the U.S. and needing to make sure that our people are trained and can gain the efficiencies that we’ve had in 2019 before COVID.

Q: Christopher LaFemina – Jefferies LLC, Research Division – Senior Equity Research Analyst: First, I just wanted to say congratulations on the operating performance in Indonesia. That has been very impressive. And once again, this past quarter, pretty incredible what you’ve done there. So congrats on that. And then secondly, I just wanted to ask a follow-up on the trends in cost in the U.S. So if you did, what, 51 million pounds of leach — production from that new leaching initiatives in the U.S. in the first quarter. And if we assume that’s around $1 a pound, that would imply that the rest of your production in the U.S. is around $3.35, $3.40 a pound for net cash cost. And then if we add to that sustaining CapEx, it’s probably something close to $4 a pound free cash flow breakeven. So my first question is, is that right? Are you at around $4 a pound free cash flow breakeven in the U.S. if you exclude the benefit of the new leaching initiatives? A: Kathleen Lynne Quirk – Freeport-McMoRan Inc. – President & Director: In terms of the leaching initiatives, when you look at our reported cash costs, you have to consider that until we add additional pounds to the stockpiles. What we’re recording as our average cost is reflective of our average cost of per unit and stockpiles. So as we gain more confidence, the denominator will drop, so we’re pulling those pounds out now out of the stockpiles are reflecting like a $3 average cost. When in reality, the incremental cost is closer to $1.

Q: Michael Stephan Dudas – Vertical Research Partners, LLC – Partner: I think you mentioned in response to the question about operating costs and cost moderation. So maybe you can touch a little bit more on what you’re seeing on the ground more specifically in your North America and South American mines on cost improvement, what your expectations are versus what it might have been a few months ago? A: Kathleen Lynne Quirk – Freeport-McMoRan Inc. – President & Director: Yes. I think those issues have moderated a bunch, and we’re getting more into a stable situation, while it’s higher than it has been. It is more stable. For instance, when we were going out for bids for things a year or two ago, you might get one bidder on a project. And now things are opening up some more for us. So on that part, I think it’s stabilized now. We’ll continue to test it.

Q: Bennett Moore – JPMorgan Chase & Co, Research Division – Analyst: It’s actually Bennett on for Bill, this morning. If I could, I wanted to ask what, if any, is the company’s current dialogue with the new leadership in Indonesia and how you see that relationship developing over time? A: Kathleen Lynne Quirk – Freeport-McMoRan Inc. – President & Director: Well, the transition doesn’t take place until October. And we’re continuing to work with the existing administration. We’ve got some matters that we’re working together on with respect to the concentrate license that we talked about earlier as well as the IUPK extension and so we’re continuing to work with the current administration on these matters.

Q: Lawson Winder – BofA Securities, Research Division – VP & Research Analyst: Maybe just on Cerro Verde, if I could. Is there still a pathway to consistently exceeding well over 400,000 tons per day at that asset? A: Kathleen Lynne Quirk – Freeport-McMoRan Inc. – President & Director: Absolutely.

Q: Martin Whittier Malloy – Johnson Rice & Company, L.L.C., Research Division – Director of Research: I wanted to ask, with your leaching technology, does that give you a competitive advantage and maybe looking at acquisition opportunities? A: Kathleen Lynne Quirk – Freeport-McMoRan Inc. – President & Director: Well, we’re focused on — I mean, we’ve got almost 40 billion pounds in our own in our inventory. And that doesn’t include some really old areas where we’re not active. But yes, I mean, to answer your question, it does give us some interest in some things that may have this opportunity to be able to apply our know-how to it. But we’re really focused on our own organic situation.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

The electric vehicle, Artificial Intelligence (AI), power infrastructure and automation boom will drive at least 10 million metric tons of additional copper demand by 2035, Swiss multinational commodity trading company Trafigura has predicted. According to Graeme Train, Trafigura’s head of metals analysis, one third of the 10 million tons of new demand will come from the electric vehicle sector, "A third is electricity generation, transmission and distribution, and the rest is for things like automation, manufacturing capex and cooling systems within data centers," he said.

A couple of weeks ago, Saad Rahim, Trafigura’s chief economist, projected that AI alone has the potential to add one million tonnes per annum of copper demand by 2030,

“If you look at the demand that is coming from data centers and related to that from AI, that growth has suddenly exploded,” said Rahim. ‘‘That one million tonnes is on top of what we have as 4-5 million tonne deficit gap by 2030 anyway. That’s not something that anyone has actually factored into a lot of these supply and demand balances.” the analyst added.

Copper futures have rallied close to a five-year high at $4.46 per pound ($9,812/t) , and Wall Street is growing increasingly bullish. Citi has predicted that the metal has entered its second secular bull market this century, "driven by booming decarbonization related demand growth, ‘’ adding that "only higher prices will solve these deficits." 

Citi notes that the last copper mega-bull market was in the 2000s when prices increased 5x in three years during copper's bull market of the 2000s, driven by rapid urbanization and industrialization in China. Citi has advised corporate consumers to hedge their copper exposures because there is potential for "explosive price upside" again over the next three years.

Citi says copper prices could hit $10,500/t over the next three months, raising its Q2 and Q3 price average to $10k/t  versus $9.5k/t previously estimated. Copper reached Citi's $9,741/t target on Thursday. Citi's new near-term bull case has copper prices skyrocketing to $12k/t over that time frame, with LME and SHFE copper stocks falling sharply over the next three months.

Meanwhile, Bank of America metals strategists say the copper supply crisis is already here, thanks to the "lack of mine projects becoming an increasing issue for copper. This, along with investment in green technologies and a rebound of the global economy, should lift prices to US$10,250/ton by Q4,’’ 8% higher than their previous view.

Copper supplies are coming under pressure as Chinese smelters approach their regulatory approval to cut output, with supply shortage resulting from disruptions in key mines across major producing regions. Rising U.S. PMIs and supply disruptions, due to drought in Zambia, are also bullish for near-term prices. Adding to the supply disruption, the U.S. and the UK have prohibited metal-trading exchanges from accepting new aluminum, copper and nickel produced by Russia, a move likely to further increase price volatility and supply uncertainty. Russia is a major metals producer, while China is the world's largest producer and consumer of copper.

Copper Stocks Rally

Unlike their lithium peers, copper mining stocks are handily outperforming the market, with Global X Copper Miners ETF (NYSEARCA:COPX) having returned 19.2% compared to 14.4% by the Energy Select Sector SPDR Fund (NYSEARCA:XLE) and 6.3% by the S&P 500 in the year-to-date.

On Tuesday, Phoenix, Arizona-based Freeport-McMoRan Inc. (NYSE:FCX) reported Q1 2024 Non-GAAP EPS of $0.32, $0.04 above the Wall Street consensus while revenue of $6.32B (+17.3% Y/Y) beat by $620M. The company’s consolidated production during the quarter totaled 1.1 billion pounds of copper, 549 thousand ounces of gold and 18 million pounds of molybdenum while average realized prices were $3.94 per pound for copper, $2,145 per ounce for gold and $20.38 per pound for molybdenum. For the second quarter, the company expects to report sales of 1.0 billion pounds of copper, 500 thousand ounces of gold and 21 million pounds of molybdenum, and expects to post consolidated sales of ~4.15 billion pounds of copper, 2.0 million ounces of gold and 84 million pounds of molybdenum for the full year 2024. FCX shares are up 22.4% over the past 12 months.

Shares of Canadian-based First Quantum Minerals Ltd (OTCPK:FQVLF) are on the mend, rallying nearly 40% in the year-to-date as mining giants Rio Tinto (NYSE:RIO), Saudi Arabia's Manara Minerals Investment Co., and scores of Japanese trading houses consider a stake in First Quantum Minerals' Zambia copper mines.

According to Bloomberg, First Quantum is looking to sell a minority stake in its Sentinel and Kansanshi mines in Zambia after it was forced to close its flagship copper mine in Panama last year. The Zambia assets could also attract interest from Chinese miners including Zijin Mining (OTCPK:ZIJMF) (OTCPK:ZIJMY) and Jiangxi Copper (OTCPK:JIAXF), First Quantum's second-largest shareholder. Last year, Zambia accounted for roughly half of First Quantum's copper production and revenue, and also delivered more than $450M in operating profit.

By Alex Kimani for Oilprice.com

More Top Reads From Oilprice.com:

Read this article on OilPrice.com

Freeport-McMoRan (FCX) reported $6.32 billion in revenue for the quarter ended March 2024, representing a year-over-year increase of 17.3%. EPS of $0.32 for the same period compares to $0.52 a year ago.

The reported revenue represents a surprise of +11.74% over the Zacks Consensus Estimate of $5.66 billion. With the consensus EPS estimate being $0.27, the EPS surprise was +18.52%.

While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health.

As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately.

Here is how Freeport-McMoRan performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:

  • Average realized price per pound – Copper: $3.94 versus the three-analyst average estimate of $3.88.

  • Production in millions of pounds – Molybdenum – South America: 3 Mlbs versus 5.48 Mlbs estimated by three analysts on average.

  • Production in millions of pounds – Molybdenum – By-product – North America: 7 Mlbs versus the three-analyst average estimate of 7.1 Mlbs.

  • Sales in thousands of Ounces – Gold – North America: 4 Koz versus the three-analyst average estimate of 4.39 Koz.

  • Sales in thousands of ounces – Gold – Consolidated basis: 568 Koz versus the three-analyst average estimate of 574.23 Koz.

  • Revenues- Indonesia: $2.83 billion versus the three-analyst average estimate of $2.54 billion. The reported number represents a year-over-year change of +106.5%.

  • Revenues- Molybdenum: $145 million compared to the $238.86 million average estimate based on three analysts. The reported number represents a change of -35% year over year.

  • Revenues- South America copper mines: $1.14 billion versus the three-analyst average estimate of $1.11 billion. The reported number represents a year-over-year change of -20.9%.

  • Revenues- North America copper mines: $1.50 billion versus the three-analyst average estimate of $1.34 billion. The reported number represents a year-over-year change of -10.1%.

  • Revenues- Rod & Refining: $1.50 billion versus $1.38 billion estimated by two analysts on average. Compared to the year-ago quarter, this number represents a -2% change.

  • Revenues- Atlantic Copper Smelting & Refining: $673 million versus $680.93 million estimated by two analysts on average. Compared to the year-ago quarter, this number represents a -11% change.

  • Revenues- Corporate, other & eliminations: -$1.46 billion versus -$1.80 billion estimated by two analysts on average. Compared to the year-ago quarter, this number represents a -8.4% change.

View all Key Company Metrics for Freeport-McMoRan here>>>Shares of Freeport-McMoRan have returned +7.9% over the past month versus the Zacks S&P 500 composite's -4.2% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term.

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PHOENIX, April 23, 2024–(BUSINESS WIRE)–Freeport-McMoRan Inc. (NYSE: FCX) today announced that it has posted its first-quarter 2024 financial and operating results press release on the Investor Relations page of its website at https://investors.fcx.com/investors/news-releases.

As previously indicated on its website, FCX will host a conference call today with securities analysts at 10:00 a.m. Eastern Time to discuss quarterly results. The conference call will be webcast on the Internet along with slides. Interested parties may listen to the conference call live and view the slides on the Investor Relations page of FCX’s website at https://investors.fcx.com/investors/presentations. A replay of the webcast will be available through Friday, May 17, 2024.

FREEPORT: Foremost in Copper

FCX is a leading international metals company with the objective of being foremost in copper. Headquartered in Phoenix, Arizona, FCX operates large, long-lived, geographically diverse assets with significant proven and probable reserves of copper, gold and molybdenum. FCX is one of the world’s largest publicly traded copper producers.

FCX’s portfolio of assets includes the Grasberg minerals district in Indonesia, one of the world’s largest copper and gold deposits; and significant operations in North America and South America, including the large-scale Morenci minerals district in Arizona and the Cerro Verde operation in Peru.

By supplying responsibly produced copper, FCX is proud to be a positive contributor to the world well beyond its operational boundaries. Additional information about FCX is available on FCX's website at fcx.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240422989299/en/

Contacts

Financial Contact:David P. Joint(504) 582-4203Media Contact:Linda S. Hayes(602) 366-7824

(Reuters) -Copper miner Freeport-McMoRan beat Wall Street estimates for first-quarter profit on Tuesday, helped by higher production and easing costs.

The mining giant said its quarterly production of copper rose to 1.1 billion pounds from 965 million pounds a year earlier, helped by a 49% jump in output from its Indonesia operations.

Freeport-McMoRan said it was working with the Indonesian government, which has put a ban on raw material exports, to obtain approvals to continue shipping copper concentrates and anode slimes. Its current license is set to expire in May.

In the reported quarter, the company also benefited from strong prices of gold, which it produces as a byproduct from its key Grasberg mine in Indonesia.

Its total gold sales volume more than doubled to 568,000 ounces in the reported quarter.

The company's average cash costs per pound of copper in the first quarter were $1.51, lower than last year's $1.76, helped by strong production and are expected to average at $1.57 for 2024, the company said.

On an adjusted basis, the Phoenix, Arizona-based company earned 32 cents per share for the three months ended March 31, compared with the average analyst estimate of 26 cents per share, according to LSEG data.

(Reporting by Sourasis Bose in Bengaluru; Editing by Shinjini Ganguli)

(Adds background on Indonesian export license in paragraph 3, details on gold sales volumes in paragraph 5)

April 23 (Reuters) – Copper miner Freeport-McMoRan beat Wall Street estimates for first-quarter profit on Tuesday, helped by higher production and easing costs.

The mining giant said its quarterly production of copper rose to 1.1 billion pounds from 965 million pounds a year earlier, helped by a 49% jump in output from its Indonesia operations.

Freeport-McMoRan said it was working with the Indonesian government, which has put a ban on raw material exports, to obtain approvals to continue shipping copper concentrates and anode slimes. Its current license is set to expire in May.

In the reported quarter, the company also benefited from strong prices of gold, which it produces as a byproduct from its key Grasberg mine in Indonesia.

Its total gold sales volume more than doubled to 568,000 ounces in the reported quarter.

The company's average cash costs per pound of copper in the first quarter were $1.51, lower than last year's $1.76, helped by strong production and are expected to average at $1.57 for 2024, the company said.

On an adjusted basis, the Phoenix, Arizona-based company earned 32 cents per share for the three months ended March 31, compared with the average analyst estimate of 26 cents per share, according to LSEG data. (Reporting by Sourasis Bose in Bengaluru; Editing by Shinjini Ganguli)