So bulls still should consider FCX stock, but should also keep an ear out for management commentary.Įven by the standards of smaller mining stocks, TRQ stock is likely to be especially volatile going forward. And it’s possible that Freeport and the industry have learned their lesson. Now, if copper prices keep rising, any M&A should work out. As I wrote at the time, that should worry investors, particularly given the broader mining industry’s consistent inability to drive shareholder value. He’s still in charge, and said last year he’s considering acquisitions. A key reason was the company’s disastrous foray into oil and gas, which destroyed about $16 billion in shareholder value.Ĭurrent chief executive officer Richard Adkerson led that move into O&G while prices were at a top. At the start of last year, shares had gained 24% total in just two decades. Over time, FCX stock actually has been a relatively poor investment. The Cerro Verde mine in Peru, a long-time mining destination, rounds out the list.īut there are concerns. Another is in Indonesia, and is operated via a joint venture with the country’s government (Freeport owns about 49%). One is in the U.S., an obviously attractive jurisdiction. Three mines account for nearly three-quarters of Freeport’s copper. That production comes from properties that should be stable in an industry that often faces regulatory and political uncertainty. That makes the company the world’s third-largest producer. Securities and Exchange Commission, 80% of 2020 revenue came from copper. Per the company’s annual report filed with the U.S. One of the simplest ways to play a rising copper price is through Freeport-McMoRan.įreeport is one of the world’s largest copper producers - and almost a pure play on the metal. So, with all of that in mind, let’s dive in and take a closer look at each one.
Mining stocks should offer leverage to the price, since costs remain mostly fixed while prices rise. Obviously, that would be excellent news for copper miners, in particular.
The firm set a 2025 price target of $15,000 per ton, against a current $8,700. Solar and wind farms too will add to demand.Īs a result, investment bank Goldman Sachs sees enormous upward pressure on copper prices. In fact, they require four times as much copper as traditional ICE (internal combustion engine) vehicles.
Electric vehicles (EVs), most notably, require significant amounts of copper. It’s secular tailwinds that make the case. After all, copper has seen volatile swings for decades. Copper” higher.īut cyclical factors alone don’t make a long-term case for copper stocks. The near-term catalyst is a global economy that continues to recover from the novel coronavirus pandemic. There’s a big case for copper - and a big case for copper stocks.
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