Freeport-McMoRan reported stronger-than-expected adjusted profit for the second quarter, as elevated copper prices largely compensated for declines in physical output tied to ongoing disruption at its Grasberg operations in Indonesia. Shares of the Phoenix, Arizona-based miner rose 1.4% in premarket trading following the results.
Average copper prices jumped 41.5% compared with the year-ago quarter, driven in the companys account by supply concerns, indications of persistent demand from China, and geopolitical tensions in the Middle East. Freeport said its quarterly average realized copper price was $6.17 per pound, up from $4.54 per pound a year earlier.
The company has been operating with constrained capacity at Grasberg after roughly 800,000 metric tons of wet material flooded the site on September 8, forcing a suspension of some activities. PT Freeport Indonesia has indicated that recovery at Grasberg - the worlds second-largest copper mine and largest gold mine - is taking longer than expected, but that operations should approach full capacity by the end of 2027.
Currently, the Grasberg complex - which is majority-owned by the Indonesian company and operated by Freeport - is running at approximately 50% of capacity, with management expecting capacity to rise to roughly 65% later this year.
Production and sales numbers for the quarter reflected the impact of the disruption. Copper production fell 18.2% to 786 million pounds in the second quarter, while gold production declined 39.4% to 192,000 ounces. On a sales basis, second-quarter copper sales excluding purchases were 710 million recoverable pounds, down from 1 billion recoverable pounds a year earlier. Gold sales totaled 123,000 ounces, a 76% decline from the prior-year period.
Despite the fall in volumes, the worlds largest publicly traded copper producer posted adjusted earnings of $0.74 per share for the three months ended June 30, beating the average analyst estimate of $0.59 compiled by LSEG.
The quarter highlights a dynamic in which sharper metal prices can offset lower mined volumes, at least temporarily, while operational recovery at key assets remains a multiyear process. The companys results underscore how swings in commodity prices and the pace of mine rehabilitation together determine near-term financial outcomes.