TLDR
- FCX stock is down ~5% pre-market Thursday as copper futures decline
- Freeport filed for an environmental permit for a $7.5B expansion of its El Abra copper mine in Chile
- The expansion would quadruple output and add more than 300K metric tons of copper annually
- The project is a 51/49 joint venture between Freeport and state-owned Codelco
- Expanded operations are not expected to begin until 2033; a final investment decision is still pending
Freeport-McMoRan filed for an environmental permit Thursday for a $7.5 billion expansion of its El Abra copper mine in northern Chile.
The move was first reported by Chilean newspaper Diario Financiero late Wednesday and confirmed by the company Thursday.
The expansion would quadruple production at El Abra. Freeport says the project could add more than 300,000 metric tons of copper output per year.
The overhaul includes building a new concentrator, a desalination plant, and tailings storage. The company originally flagged the expansion plan back in mid-2024 after years of delays.
Freeport had said it expected to begin the environmental permitting process between late 2025 and early 2026. That timeline is now playing out.
Joint Venture With Codelco
El Abra is operated by Freeport, which holds a 51% stake. Chile’s state-owned copper company Codelco holds the remaining 49%.
Freeport executives briefed Chile’s new Economy and Mining Minister Daniel Mas in Santiago on Thursday, according to Bloomberg.
No final investment decision has been made yet. The permitting process is the first formal step toward that decision.
Expanded Output Not Expected Until 2033
If approved and funded, operations at the expanded mine are not expected to start until 2033. That’s a long runway before any production uplift hits the market.
The stock is taking a hit Thursday regardless. FCX is down around 5% in pre-market trading as copper futures slide.
The weakness in copper is being tied to rising energy prices from an escalating Middle East conflict, which is feeding fears about the global economy.
Other copper names are also trading lower. Southern Copper (SCCO), Teck Resources (TECK), Taseko Mines (TGB), and Hudbay Minerals (HBM) are all indicated sharply down in pre-market trading.
The El Abra mine sits in Chile’s Atacama region, one of the driest places on earth. The planned desalination plant addresses the water scarcity challenge that comes with operating in that environment.
This is a long-term project. Even if the permit is granted and Freeport commits the capital, investors won’t see production from the expanded facility for the better part of a decade.
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