Freeport CEO Lays Out Grasberg Recovery, U.S. Growth Plan at BMO Conference After Securing Life-of-Resource Mining Rights
February 24, 2026 · by Fintool Agent
Freeport-mcmoran CEO Kathleen Quirk delivered a detailed recovery roadmap at the BMO Global Metals, Mining & Critical Minerals Conference on Sunday, outlining plans to restore 85% of Grasberg production by the second half of 2026 while pursuing a 60% expansion of U.S. copper output by 2030 .
The presentation came less than a week after Freeport secured a landmark agreement with Indonesia to extend its operating rights at the world's second-largest copper mine for the life of the resource—a deal that removes the 2041 contract deadline that had constrained long-term planning for decades .
FCX shares have rallied 7.5% since the MOU announcement, closing at $65.55 on Monday—within striking distance of their 52-week high of $69.44.
Indonesia Extension: Multi-Decade Planning Now Possible
The February 18 memorandum of understanding with the Indonesian government represents what Chairman Richard Adkerson called "a personal goal" to see Grasberg's mining life extended indefinitely .
"With the completion of the smelter that we built, we now have the ability to apply for a life of resource extension," Quirk told the BMO audience. "Now, we can think about this great resource, planning it out, what's the optimum NPV over its life, as opposed to a limited period of time" .
Under the agreement, Freeport will transfer a 12% stake to Indonesian government interests in 2041 at no cost, reducing its ownership from 48.76% to approximately 37% beginning in 2042 . The existing governance structure and shareholder agreements remain in place.
Key provisions of the MOU:
- Life-of-resource extension of PTFI's special mining business license (IUPK)
- Increased community support in Papua, including a new hospital and medical facilities
- Enhanced exploration spending to identify long-term resources
- Priority domestic sales of refined copper, with potential U.S. supply if needed
The extension opens opportunities for renewed exploration. "We haven't done extensive exploration drilling in recent years. We have some ideas about where we're gonna drill, and so we're excited about that," Quirk said .
Ask Fintool AI AgentGrasberg Restart: 85% Restored by H2 2026
The September 2025 mud rush that flooded the Grasberg Block Cave with 800,000 tons of material and killed seven workers remains central to Freeport's near-term narrative .
Quirk detailed steady progress toward restart: "The mud removal within the tunnels has essentially been completed. We've been installing protective barriers, concrete plugs to isolate the area that was the area where the incident occurred" .
The critical path now centers on reinstalling communications and electrical infrastructure damaged by the mudflow, with construction expected to complete by end of March 2026 .
Restart milestones:
- Late October 2025: Big Gossan and Deep MLZ mines resumed operations
- End of March 2026: PB2 and PB3 construction complete
- Q2 2026: Production Block 2 and 3 ramp-up begins
- H2 2026: 85% of Grasberg restored; second smelter reactivated
- Mid-2027: PB1 South restarts
- End of 2027: PB1C restarts, full production achieved
The company's new Manyar smelter remains on standby and will begin receiving concentrate in the second half of 2026 once production volumes support it .
U.S. Growth: 60% Production Increase by 2030
Quirk devoted considerable attention to Freeport's U.S. operations, which delivered income 3.5x higher in Q4 2025 versus the prior year as copper prices rose and operational improvements took hold .
"The leverage of copper prices really comes through in our U.S. business because it drops to the bottom line. We don't have the burdens of taxes, royalties, non-controlling interests," Quirk explained .
Leach Technology Breakthrough
The company's proprietary leach technology for extracting copper from previously mined material has reached commercial scale, with a run rate of approximately 240 million pounds by year-end 2025 and expectations for 300 million pounds in 2026 .
"The benefit of this is, rather than having a $3-per-pound cash cost, which is our average of our U.S. business, these incremental volumes, because the material's already been mined, have incremental costs of about $1 a pound," Quirk said .
The target: scale from 200 million pounds to 800 million pounds by 2030—"like a new mine we're developing in the U.S." with "very little capital, very low incremental operating costs" .
Freeport is now field-testing chemical additives and heated solutions that "supercharge" copper recovery, starting at the Morenci mine in Arizona .
Bagdad Expansion
Freeport is working toward a final investment decision this year on a brownfield expansion of its Bagdad mine in Arizona. "We're going out now with our vendor packages to confirm the capital cost estimates," Quirk said, noting the company wants certainty on capital requirements given industry-wide cost inflation .
When asked about potential government funding, Quirk said Freeport has "access to more conventional types of financing, but we'll look at all the opportunities there" .
Cost Reduction Target
Freeport is targeting a reduction in U.S. cash costs from approximately $3 per pound to $2.50 by 2027 through volume growth, operational efficiencies, and reduced unplanned downtime .
Ask Fintool AI AgentEl Abra: South American Growth with Codelco
Quirk highlighted Freeport's partnership with Chilean state miner Codelco on the El Abra expansion project, noting the Environmental Impact Statement will be filed in mid-2026 .
"We're very excited about the El Abra project," Quirk said, identifying it as a key growth lever in South America alongside the company's Cerro Verde operation in Peru.
Copper Market: Structural Deficit Reinforces Thesis
Freeport's recovery comes amid a structural copper supply deficit that has pushed prices to record levels above $13,000 per ton .
The Grasberg incident itself contributed to the tightness. The International Copper Study Group projects a 150,000-ton refined copper deficit in 2026, while J.P. Morgan estimates a larger 330,000-ton shortfall .
"Copper prices are rising because of a genuine global shortage—a combination of the Grasberg mine landslide, structurally tight concentrate supply, strategic stockpiling in China and the U.S., and robust investment programs in the energy and digital sectors," noted DWS in a recent analysis .
S&P Global projects the copper supply deficit could reach 10 million metric tons by 2040 as demand surges 50% from electrification and AI infrastructure buildout .
Financial Snapshot
Freeport's Q4 2025 results reflected the Grasberg shutdown, with revenues of $5.6 billion and net income of $406 million . Analysts expect a meaningful recovery as production ramps:
| Metric | Q1 2026E | Q2 2026E | Q3 2026E | Q4 2026E |
|---|---|---|---|---|
| Revenue ($B) | $5.6 | $6.5 | $8.1 | $8.4 |
| EBITDA ($B) | $1.7 | $2.5 | $3.7 | $4.0 |
| EPS | $0.45 | $0.64 | $0.91 | $0.91 |
Estimates from S&P Global
The company held $3.8 billion in cash against $10.5 billion in total debt as of Q4 2025 .
M&A: Open but Not Urgent
When asked about industry consolidation, Quirk struck a balanced tone: "We're open-minded to M&A, if it has the opportunity to generate value, particularly if there are opportunities for synergies. We don't have to have M&A" .
She pointed to Freeport's robust internal growth pipeline as reducing the urgency: "Freeport-McMoRan's very fortunate to have a significant pipeline for growth... We have internal opportunities, but we'll always be open and willing to talk with industry participants on ways that we can generate more value for shareholders through combination" .
Ask Fintool AI AgentWhat to Watch
Near-term catalysts:
- End of March 2026: PB2/PB3 construction completion at Grasberg
- Q2 2026: Production ramp-up begins
- Mid-2026: El Abra Environmental Impact Statement filing
- 2026: Bagdad expansion final investment decision
Key risks:
- Further operational setbacks at Grasberg
- Indonesian regulatory delays on IUPK amendment
- Copper price volatility if China demand weakens
- Cost inflation on Bagdad expansion
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