Freeport-McMoRan Inc reported second-quarter earnings on Thursday that far exceeded Wall Street's expectations. Freeport-McMoRan Inc, one of the world's largest copper producers, benefited from increased demand for copper and higher prices.
Copper prices hit a record high of $10747.50 a tonne in May. Bullish investors are betting that demand for copper will increase further as the world economy recovers from the covid-19 crisis and investment in green energy increases.
For the three months ended June 30, the Phoenix, Arizona-based miner's adjusted net profit attributable to common stock was $1.14 billion, or 77 cents a share, compared with $44 million, or 3 cents a share, a year earlier.
Analysts had expected an average of 76 cents a share.
The average realised price of copper per pound in Freeport rose by 70 per cent in the second quarter, while copper production increased by about 19 per cent to 913 million pounds.
The company said it produced 2000 million pounds of metal molybdenum in batteries used in airbags, compared with 1900 million pounds in the same period last year.
The company cut its 2021 capital expenditure guidelines, excluding Indonesian smelter spending, from $2.3 billion to about $2.2 billion.
Catherine Quick (Kathleen Quirk), finance director of Freeport, said on a conference call with investors on Thursday that political uncertainty in Chile and Peru, which have large copper mines, made the company's mines in the US "more attractive".
Peru's new president says he wants to increase spending on health care and education by raising mining taxes. In Chile, some lawmakers are seeking to raise mining royalties to finance the restoration of covid-19 in Chile.
Richard Akerson (Richard Adkerson), chief executive, said that elsewhere, the drought sweeping the southwestern US was something the company was watching closely, and that copper mining was a water-intensive process but was not expected to be a crisis affecting operations.
