Freeport-McMoRan is a leading international metals company primarily focused on producing copper and molybdenum.
Kathleen, what is your vision for Freeport-McMoRan as the new CEO?
I took over as CEO in June of this year, though I have been with Freeport for 35 years. Freeport is a very special company with a global, multicultural team and operations in the U.S., South America, Indonesia, and Spain. Our vision is clear: we aim to be leaders in responsible copper production. We are committed to supplying the world with the copper it needs, but we are equally focused on doing so in a responsible, sustainable manner.
Our strategy revolves around five key objectives: ensuring safety, executing operating plans reliably and responsibly, developing new copper sources profitably, investing in people and talent development, and leaning into new technologies. This is not a radical shift in our strategy, but a deepening focus on these areas. By prioritizing these five objectives, we aim to maintain our strong, low-cost position while driving long-term success in the copper industry.
What is driving recent record copper prices? Do you think these peaks will be sustained?
We are currently in a new era for copper. Over the last 20 years, China’s economic growth has been the primary driver of new copper demand, and today, China accounts for about 50% of global copper consumption. But we are now seeing a broader, more global trend of copper demand growth. Copper is essential to reducing CO2 emissions and supporting the transition to greener energy sources like solar and wind, as well as the electrification of daily life. These trends are major drivers of future demand.
As for prices, we must prepare for volatility. While the outlook for copper is positive and demand is expected to rise, copper prices have historically been cyclical. Freeport remains focused on maintaining a strong balance sheet to weather any unexpected economic challenges or downturns. Even with a tight market and growing demand, we recognize that external factors can impact commodity prices, so we remain vigilant in our cost control and financial discipline.
What can companies like Freeport do to address the supply challenges in meeting growing copper demand?
There have been no significant recent copper discoveries, and the pipeline of new projects is shrinking. The opportunities are becoming smaller, and the timelines for bringing new projects online are getting longer, in part due to inflation and rising project costs. At Freeport, we are addressing these challenges by adopting new technologies to increase copper production from existing resources.
One example is our innovative leach initiative, primarily in the U.S., though also in South America. We are revisiting previously mined stockpiles, where ore that was once considered unrecoverable can now be efficiently processed using advanced technologies. This approach allows us to increase production at a low incremental cost and with a minimal carbon footprint, as the material has already been mined. Our initial target of producing 200 million pounds per year from this initiative has been reached, and we are ultimately aiming to expand to 800 million pounds per year. This is equivalent to some of the world’s largest copper mines, but at a fraction of the capital cost. It is a significant opportunity for Freeport, and we are embracing it aggressively.
What about recovery from tailings? Have you considered that as a viable option?
While tailings recovery happens in some places globally, it is not a significant part of our operations at Freeport. Managing tailings is a major aspect of our environmental efforts, and we have been leaders in establishing industry standards for tailings management. However, the current focus is on enhancing our leaching operations, which do not create tailings but allows us to recover copper from previously mined stockpiles using new technologies.
Does Freeport follow the same sustainability standards across all its operations, regardless of jurisdiction?
Absolutely. Whether we are operating in the U.S., Indonesia or elsewhere, we apply the same high sustainability standards. Freeport has been operating in Indonesia for over 57 years, and we take a long-term view with every investment we make. Our commitment is to ensure that our operations benefit not only the current generation but also future generations. We do not operate with a short-term mindset; we are part of these communities for decades and even centuries, as seen in some of our U.S. operations that have been around for over 100 years.
Sustainability and community partnership are core to how we operate. In Indonesia, for example, we have made significant contributions to job creation and the local and national economy, while also ensuring that our operations are environmentally responsible. Transparency and trust-building with the communities where we operate are essential. We have learned that continuous engagement and communication are key to ensuring that our operations align with community aspirations, and we are constantly working to improve these relationships over time.
Given the rise in copper prices, are you interested in acquiring projects that were previously economically unviable?
At Freeport, we are fortunate to have significant organic growth opportunities within our existing operations. Our leach initiative shows great promise, and we have ongoing opportunities to expand operations in the U.S. and a large, exciting project in Chile. Additionally, we are ramping up a new smelter in Indonesia, a complex project that is substantially complete despite the challenges posed by inflation and supply chain issues.
While our focus is on maximizing the value of our current assets, we do keep an eye on potential acquisitions. If an opportunity arises that aligns with our long-term goals and adds value for our shareholders, we will consider it. However, our primary focus is on driving growth and value from our organic opportunities, as we continue to strengthen our position as a leader in the copper industry.
