Freeport copper output falls short just as the world needs more of the metal

Freeport copper output falls short just as the world needs more of the metal

Published By James Attwood and Yvonne Yue Li in www.mining.com

Freeport-McMoRan Inc. produced less copper than expected last quarter from its mines in the Americas, adding to concerns over a drum-tight global market that’s seen prices surge back toward record levels.

The world’s largest publicly traded copper miner produced 987 million pounds of the metal in the third quarter, Freeport said Thursday in a statement, with the output falling short of the 1 billion pound average estimate of analysts tracked by Bloomberg. The production miss was led by lower-than-expected output in its mines in South America and North America. Freeport’s statement didn’t provide information indicating why output was below market expectations.

The market is banking on Freeport ramping up underground production in Indonesia and getting back to pre-Covid levels in Peru. Freeport said underground progress at its flagship Grasberg mine continues to advance on schedule.

Copper prospects

Copper’s immediate prospects are supported by low inventories, while the shift to low-carbon energy sources paints a rosy picture for the longer term. But global shipping bottlenecks and energy shortages in China and Europe are dimming the demand outlook heading into next year.

Efforts to conserve power and limit emissions in China are also a double-edged sword for mining companies, with higher smelting fees eroding the windfall. Rising costs are seen as one of the few headwinds to earnings growth. Freeport’s net copper cash costs stood at $1.24 per pound in the third quarter, below the average analyst estimate of $1.30 a pound.