Freeport-McMoRan Plans Copper Mine Expansions in Arizona and Chile

Freeport-McMoRan Copper

Freeport-McMoRan, the Arizona-based mining giant, has announced ambitious plans to expand its copper mining operations to meet the rising demand for the metal, particularly driven by electric vehicle (EV) production and infrastructure development. The company outlined key projects in Arizona and Chile slated for 2025 and beyond.

Expansion Projects in Arizona and Chile

• Bagdad Mine (Arizona): Freeport plans to double the concentrator capacity of the Bagdad mine to produce 200–250 million lbs of copper annually. It is set to become the first Freeport mine with a fully autonomous haulage system, transitioning its fleet to 100% automation.
• Lonestar/Safford Mine (Arizona): Exploration studies are ongoing, with results expected by late 2024. This could pave the way for significant capacity increases.
• El Abra Mine (Chile): An expansion at the El Abra site is under review, with environmental impact studies scheduled for submission by the end of 2025.

Copper Production Trends and Market Dynamics

In the third quarter, Freeport's copper production fell 3% year-on-year to 1.05 billion lbs, but year-to-date production remains up by 1.8% at 3.17 billion lbs. Consolidated molybdenum production for the quarter was steady at 20 million lbs, though year-to-date figures are down 6% to 58 million lbs.

Despite the mixed production figures, copper prices averaged $4.32/lb during the quarter, a notable increase from $3.86/lb in the previous year, bolstering revenues.

Regional Production Overview

1. North America: Copper production dropped by 9% to 313 million lbs due to lower ore grades and operating rates, with the Morenci joint venture experiencing the most significant decline. However, molybdenum production in the region rose by 14% to 8 million lbs.
2. South America: Copper output decreased by 2% to 299 million lbs, largely attributed to shipment timing and reduced output at Cerro Verde.
3. Indonesia: Copper production rose by 0.7% to 439 million lbs. However, a fire at the Manyar smelter in October may impact fourth-quarter figures.

Financial Performance

Freeport reported a quarterly profit of $526 million, up from $454 million a year ago, supported by a revenue increase to $6.8 billion from $5.8 billion.

Demand Outlook

Freeport is cautiously optimistic about the future of copper demand, citing:

• Increased EV-related demand from China, supported by anticipated government stimulus.
• Balanced US demand with strong performance in power cable and building wire markets offsetting weaknesses in residential and auto sectors.

With these expansions, Freeport-McMoRan is positioning itself to capitalize on growing copper demand while navigating regional production challenges.

Freeport-McMoRan Forecasts Lower Copper Sales, Higher Molybdenum Sales in 2025

Freeport-McMoran

Copper Sales Decline Amid Export Restrictions and Shipment Timing

US mining giant Freeport-McMoRan expects lower copper sales in 2025, projecting 4 billion pounds (1.79 million metric tons), down from 4.07 billion pounds in 2024. The company's fourth-quarter copper sales fell to 992 million pounds, reflecting lower ore grades and shipment timing.

Copper production remained stable at 4.21 billion pounds in 2024, with Q4 output dropping slightly to 1.04 billion pounds. Average realized copper prices rose to $4.21/lb in 2024, marking a $0.36/lb increase from 2023.

Molybdenum Sales and Production Outlook

Freeport expects to sell 88 million pounds of molybdenum in 2025, following a 3-million-pound drop in 2024 sales to 78 million pounds. Molybdenum production slipped to 80 million pounds in 2024, though Q4 production increased to 22 million pounds.

The average molybdenum price fell by $2.87/lb to $21.77/lb in 2024, despite a Q4 price increase to $22.23/lb.

Indonesian Operations and Export Challenges

Indonesia's copper production in Q4 2024 dropped 60 million pounds year-over-year to 429 million pounds. Despite this, annual production increased to 1.8 billion pounds, up from 1.66 billion pounds in 2023. Indonesia banned copper concentrate exports from January 1, but Freeport has requested an exemption until its fire-damaged smelter is repaired by mid-2025.

Expansion Plans in North and South America

In North America, Q4 copper production increased slightly to 321 million pounds, while South America saw a 5-million-pound increase to 291 million pounds. For 2024, total production fell in both regions.

Freeport is evaluating a 200-250 million lb/year expansion at its Bagdad mining complex in Arizona, requiring copper prices between $3.50-4.00/lb to justify the $3.5 billion investment. The company is also considering expansions at Safford/Lone Star in Arizona and a new mill project in Chile, with feasibility studies underway.

Freeport Revises Copper Sales Forecast for 2Q

Freeport-McMoRan

Freeport McMoran, a US-based mining firm, has adjusted its second-quarter copper sales projections downward following a halt in copper concentrate exports from its Indonesian operations throughout June.

According to the company's announcement on Tuesday, Freeport now expects its total copper sales to be 5% lower than the initially forecasted 975 million pounds set in April. This adjustment is coupled with an estimated increase in unit net cash costs by 20 cents per pound to $1.77 per pound, attributed to reduced shipments during the quarter.

PT Freeport Indonesia, a joint venture with the Indonesian government, was unable to export concentrate or anode slimes in June due to the expiration of its export licenses on May 31. Approval to resume exports was granted today, valid until December as permitted by the Indonesian government.

Despite the setback, Freeport intends to transport the delayed portion of Indonesian copper production in subsequent periods, maintaining its total full-year sales guidance of 4.15 billion pounds.

Furthermore, Freeport has completed the construction of its new Manyar smelter in Gresik, Indonesia, and anticipates commencing copper cathode production "in the coming months," scaling up to full capacity by the end of the year.

Grasberg Copper Mine Recovery Delay Tightens Indonesia Supply Outlook

Grasberg Copper Mine

Grasberg copper mine recovery has been delayed after Freeport-McMoRan reported slower progress at its Indonesian operation following last year’s fatal mud rush accident. The company now expects the Grasberg Block Cave to recover more gradually than previously planned.

The Grasberg copper mine recovery delay is important because Grasberg is one of the world’s largest copper assets. Any slower restart affects global mine supply at a time when copper demand remains tied to grids, data centres, electrification and industrial policy.

The Grasberg copper mine recovery outlook has been cut because wet drawpoints increased inside the mine after the incident and subsequent suspension of mining activity. Freeport said it must upgrade ore loading infrastructure before production can recover more fully.

Freeport now expects Grasberg to reach only 65% of production capacity by the second half of this year. It previously expected the mine to reach 85% in that period.

Grasberg Restart Slows After Underground Infrastructure Issues

The progressive restart of Grasberg Block Cave has been slower than expected. The increase in wet drawpoints has limited mining activity and created a need for infrastructure upgrades.

Freeport now expects Grasberg to reach about 85% of capacity by mid-2027. The company expects the mine to approach full capacity by the end of 2027.

That marks a clear delay from the previous plan. Freeport had earlier expected Grasberg to return to full production capacity by the end of 2027.

The production impact was visible in the first quarter. Freeport’s Indonesian copper output fell by 68% on the year to 95mn lbs because of the Grasberg disruption.

Across Freeport’s global operations, copper output fell by 24% on the year to 662mn lbs. The decline shows how heavily the company’s production profile depends on a stable Grasberg recovery.

US operations partly offset the Indonesian weakness. Copper production from Freeport’s seven mines in the southwest US rose by 3% on the year to 309mn lbs.

Output from the company’s mines in Peru and Chile fell by 4.8% to 258mn lbs. Lower leach placements weighed on production across those assets.

Higher Copper Prices Offset Lower Production

Freeport’s first-quarter financial results were supported by stronger copper prices. Average copper prices rose by 30.1% on the year to $5.78/lb.

Unit production costs also improved. Freeport’s per-unit costs fell by 7.7% to $1.91/lb.

This helped offset lower production and sales volumes. Copper sales volumes fell by 25% from a year earlier, although they were 3% above Freeport’s January estimate.

Freeport’s profit more than doubled to $881mn in the first quarter. Revenue rose by 8.8% to $6.2bn.

The result shows the current copper market tension. Operational supply is weaker, but higher prices are protecting margins for major producers.

Molybdenum performance was mixed. Consolidated molybdenum production fell by 4% to 22mn lbs, while sales volumes rose by 20% to 24mn lbs.

For the copper market, the delayed Grasberg recovery adds another supply-side risk. Indonesia has been expected to support global copper growth, but mine-level disruptions continue to limit output.

The issue also reinforces a broader industry problem. Large underground copper mines can take years to stabilise after major incidents, and infrastructure bottlenecks can delay recovery even when restart work has begun.

The Metalnomist Commentary

The Grasberg delay shows why copper supply cannot be judged only by long-term resource size. A single underground disruption at a world-class mine can reshape near-term supply and strengthen copper’s strategic premium.

Freeport US Copper Refining Capacity: Tariffs and Miami Smelter Expansion in Focus

Freeport-McMoRan

Freeport is moving to lift Freeport US copper refining capacity as domestic demand and premiums rise. The company is evaluating a Miami, Arizona, smelter expansion to boost throughput. As a result, Freeport US copper refining capacity could increase while import tariffs reshape market spreads. Freeport says it already provides 70% of US refined copper, underscoring the scale of Freeport US copper refining capacity today.

Tariffs, premiums and the Miami smelter opportunity

Freeport could benefit from the announced 50% US copper import tariff. Therefore, higher US premiums may add about $1.7bn annually, according to management. The firm is assessing Miami smelter expansion to capture that uplift. However, the company also expects a 5% cost increase from broader tariffs.

Mixed global production, stronger US volumes and profits

US copper production rose 13% in the second quarter to 336mn lbs. Freeport plans to sell 1.3bn lbs from US operations in 2025. That compares with 1.257bn lbs sold in 2024. Meanwhile, total production fell 7% to 963mn lbs, but sales rose 9% to 1.02bn lbs. South America slipped 10% to 268mn lbs in the quarter. Indonesia declined to 359mn lbs after a smelter fire, though the plant reopened in May. Molybdenum output increased 10% to 22mn lbs, with sales up 5% to 22mn lbs. As a result, quarterly profit improved to $772mn, up from $616mn a year earlier.

Freeport aims to align smelting with mine output as premiums firm. Therefore, a Miami upgrade could reduce reliance on third-party treatment options. In turn, integrated refining may cushion volatility in treatment and refining charges.

The Metalnomist Commentary

A Miami smelter expansion would harden US midstream resilience if premiums stay elevated. Watch tariff implementation and domestic demand; both will determine the pace and payback of new refining capacity.

Freeport Suspends Copper Output at Manyar Smelter Following Fire Incident

Freeport McMoRan

Freeport McMoRan, a leading US-based mining company, has temporarily halted copper cathode production at its Manyar smelter in the Gresik special economic zone of East Java, Indonesia, due to a fire that broke out on October 14, 2024. The fire occurred at the clean gas separation facility, a critical part of the smelting process, which converts carbon dioxide into sulfuric acid. The blaze was reported to have started at approximately 17:45 local time (10:45 GMT) on October 14 and was fully extinguished by October 15.

According to Tony Wenas, CEO of Freeport Indonesia, the suspension was necessary because the copper cathode production process was consuming sulfuric gas that must be captured by the clean gas separation facility. This incident has led to the postponement of refined copper sales, and production will remain halted until the facility is fully operational again. The Manyar smelter was expected to commence full-scale operations by the start of 2025, with a capacity to process up to 1.7 million tons per year (t/yr) of copper concentrate and produce up to 600,000 tons per year of copper cathodes.

This disruption follows the smelter's recent launch on September 23, 2024, and marks a setback for the company’s copper production efforts in Indonesia, where Freeport has been focusing on expanding its refining capabilities. The company’s response to the incident highlights the challenges faced by mining operations in maintaining the delicate balance of environmental safety and efficient production processes.

US Copper Smelters Face a Strategic Supply Chain Test

Freeport Mcmoran

US copper smelters have become a strategic weak point in the copper supply chain. Industry leaders now see smelting as a national security issue. They no longer view it only as a commercial bottleneck. As a result, US copper smelters now sit at the center of resource nationalism.

Freeport-McMoRan and Rio Tinto highlighted this shift during a critical minerals panel in Houston. Kathleen Quirk said governments now care deeply about smelter location. That marks a clear change in policy thinking. Meanwhile, the United States has only two operating copper smelters today.

Negative Processing Economics Are Reshaping the Copper Supply Chain

Copper treatment and refining charges show how fragile the system has become. Rio Tinto said these charges are currently negative. That means smelters are effectively paying miners for copper concentrate. Therefore, this part of the copper supply chain now faces severe economic pressure.

This imbalance weakens incentives to maintain or expand domestic refining capacity. It also increases dependence on overseas processing networks. However, governments now want more control over mineral conversion inside national borders. That tension could accelerate industrial policy support for US copper smelters.

Copper Bioleaching and Alternative Processing Gain Momentum

New technology could reduce reliance on conventional smelting. Rio Tinto pointed to leaching, solvent extraction, and electrowinning as alternative pathways. It also emphasized copper bioleaching as a major opportunity. Consequently, innovation may become the next battleground in copper processing.

Rio Tinto already produced copper at Arizona’s Johnson Camp mine using its Nuton process. That proprietary system uses site-grown microorganisms to recover metal. The approach targets ores that were once hard to process economically. Therefore, copper bioleaching could expand future supply without traditional smelter growth.

Copper demand is also strengthening beyond normal business cycles. Freeport expects a more durable base of secular demand. Rio Tinto added that US copper consumption could double in coming years. As demand rises, the pressure on US copper smelters and the wider copper supply chain will intensify.

The Metalnomist Commentary

Copper miners may attract attention, but processing capacity now defines strategic power. If smelting margins stay weak, governments will likely support alternative refining routes. The copper race will depend not only on ore, but on who controls conversion.

Molybdenum Mark sustainability certification gains ground as ESG pressures grow

Copper Mark

Molybdenum Mark sustainability certification is rapidly gaining ground as ESG demands reshape global metals markets. Over 40pc of the world’s mined molybdenum now comes from sites holding the Molybdenum Mark sustainability certification. As a result, the Molybdenum Mark sustainability certification is becoming a key reference point for buyers seeking responsible molybdenum supply.

The Molybdenum Mark sustainability certification was launched in 2022 by the Copper Mark and IMOA. It forms part of a broader family of Copper, Nickel and Zinc Marks that promote responsible production and sourcing. Therefore, producers that adopt the Molybdenum Mark can demonstrate alignment with recognised ESG and supply chain standards. The certification increasingly influences buyer preferences, potential pricing premiums and long term offtake decisions.

Global reach of the Molybdenum Mark sustainability certification

The global footprint of the Molybdenum Mark sustainability certification is expanding quickly. As of September, 28 producing sites had earned the label, with three more under assessment. Coverage has reached 100pc of mined molybdenum production in Mexico, Australia and Canada.

Meanwhile, adoption rates are also high in other major molybdenum hubs. The scheme covers 95pc of output in Chile, 92pc in the US and 67pc in Peru. US based Freeport McMoRan’s Climax Molybdenum operations were among the first to secure the certification. These figures show that the Molybdenum Mark sustainability certification is not a niche label but a mainstream benchmark.

Importantly, molybdenum supply is already well diversified outside China in both mining and processing. This contrasts with other critical materials such as tungsten, gallium and many rare earths. Therefore, the certification can amplify an existing geographical advantage by adding verifiable ESG credentials. That combination is increasingly attractive to steelmakers, energy firms and OEMs facing stricter disclosure requirements.

ESG, CBAM and market impacts for molybdenum producers

Rising ESG and carbon constraints are the main drivers behind the Molybdenum Mark sustainability certification. OEMs, energy companies and downstream sectors want proof that raw materials meet environmental and social standards. This trend is intensifying ahead of the EU Carbon Border Adjustment Mechanism’s full rollout from 2026.

Currently, molybdenum is not included in CBAM’s initial scope. However, its critical role in steel alloys, electronics and energy infrastructure positions it for possible future inclusion. In that context, the Molybdenum Mark sustainability certification could help producers prepare for emissions verification demands. Market participants already see the label as a tool to de risk future regulatory and customer audits.

Industry voices stress that mining performance now goes beyond simple tonnage and grade. “Modern mining is not only production tonnes, but also its environmental and social footprint,” one IMOA meeting attendee said. Therefore, producers that ignore ESG and certification risk losing access to premium markets or facing discounts. Over time, the Molybdenum Mark sustainability certification may influence trade flows and contract structures, not only reputations.

The Metalnomist Commentary

The rapid uptake of the Molybdenum Mark shows how ESG frameworks can move from theory to market reality in just a few years. With coverage already spanning most major producing regions, the label is poised to shape pricing dynamics and access to high value customers. Market participants should watch whether end users begin to specify Molybdenum Mark certified material in tenders, which would lock ESG performance into the commercial core of the molybdenum trade.

EU Molybdenum Market Faces Pressure in 2025 from Rising Supply and Slowing Demand

Molybdenum

Price Declines Expected Amid Increased Production and Weak Steel Demand

The European molybdenum market is under significant pressure as supply surges while demand remains sluggish. This imbalance is expected to push prices down further from their 2024 highs, as both production and consumption trends signal an ongoing shift in the market.

In early February, the European molybdenum complex saw prices hit a nine-month low. Ferro-molybdenum (FeMo) was assessed at $49.40-49.80/kg in Rotterdam, while molybdenum oxide (MoOx) was priced at $20.60-20.85/lb. These figures represent a notable dip from the highs observed in 2023, when prices were buoyed by a shortage of immediate supplies. The average FeMo price in 2024 was $49.74/kg, the second highest since 2008, while MoOx prices averaged $19.63/lb, marking the second highest level since 2008.

Increased Supply Pressures Prices

Rising supply is a major factor contributing to the downward pressure on prices. Major molybdenum producers, such as Freeport-McMoRan and Chilean state-owned Codelco, are ramping up production at their copper mines, where molybdenum is often recovered as a by-product. This increase in output is expected to intensify competition in the market and put further strain on prices. In addition, the expansion of Chinese production, driven by efforts to restructure the steel industry, is set to add to global supply levels. The adoption of advanced manufacturing techniques is also contributing to greater output, resulting in an oversupplied market.

Market participants are predicting that FeMo prices could decline to the $45-47/kg range, especially if molybdenum extraction resumes in full swing from various mining operations. The increased production has led to a more competitive environment, which may push prices lower throughout 2025.

Weak Demand in European Markets

While supply continues to rise, demand for FeMo and MoOx in Europe is showing signs of weakening. Steel producers are reducing their alloy intake, reflecting slower buying activity in the market. Despite the growth in industries linked to electric vehicles and renewable energy, these sectors have not been able to offset the broader slowdown in steel production. The ongoing decline in construction and infrastructure projects is expected to keep demand for molybdenum alloys subdued in the short term.

Additionally, political uncertainties and fluctuating energy costs continue to create volatility in the market, making it difficult to forecast the full extent of molybdenum price declines. In light of the pessimistic outlook, many market participants are adopting a cautious approach, opting to work on long-term contracts or deal on a hand-to-mouth basis, with a limited number of truckload inquiries being observed.

Chile Copper Production Falls as Mature Mines and Acid Costs Pressure Supply

Chile Copper minnig

Chile copper production fell sharply in the first quarter, deepening concerns over near-term supply from the world’s largest copper-producing country. Output declined by 5.8% year on year to 1.217mn t.

Chile copper production weakness was driven by lower output from mature mines, softer grades and weaker refined cathode production. March was especially weak, with national copper output down 9% from a year earlier.

Chile copper production matters because the global copper market is already facing tight concentrate availability, fragile refined flows and stronger demand from grids, electrification and data centres.

The decline reinforces a core market concern. Higher copper prices are not quickly translating into higher mine output, especially in countries where ageing assets and delayed projects continue to limit supply response.

Concentrate Output Falls as Major Mines Underperform

Chile’s copper concentrate output fell by 6% year on year to around 947,000t in the first quarter. Concentrates accounted for almost 78% of the country’s total mine output.

The weakness was visible across both state-owned and private producers. Escondida remained Chile’s largest copper mine with 311,600t in the quarter, followed by Codelco at 299,600t, including stakes in El Abra and Anglo American Sur.

Codelco’s own divisions produced around 271,600t. The company is targeting 1.344mn t this year after producing about 1.33mn t in 2025.

The first-quarter result keeps pressure on Codelco to stabilise output after several years of structural underperformance. Ageing mines, delayed projects and higher operating costs remain key constraints.

March data showed broad weakness at the largest mines. Codelco output fell by nearly 10% year on year to 110,900t, while Escondida declined by almost 16% to 101,600t.

Collahuasi, jointly owned by Glencore and Anglo American, produced 31,400t in March, down 10.8% from a year earlier. Its first-quarter output totalled 88,200t.

Other major producers also faced pressure. Los Pelambres produced 69,600t, Anglo American Sur 58,200t, Quebrada Blanca 55,500t and Spence 44,600t during the quarter.

Antofagasta produced 143,000t of copper in the quarter. The company cited lower processing rates and weaker grades at Los Pelambres and Centinela concentrates.

Teck’s Quebrada Blanca was one of the more stable performers. The mine produced 55,500t despite planned maintenance and a shorter February, supported by stronger March throughput and recoveries.

SX-EW Cathode Weakness Exposes Chile to Acid and Fuel Costs

Chile’s refined SX-EW cathode output reached 269,300t in the first quarter. January output increased, but February and March both fell from a year earlier.

Refined electrolytic cathode output was weaker at 107,000t. March production fell by 38.7% year on year, pulling total refined cathode output to about 376,300t.

This matters because Chile’s oxide and SX-EW operations are increasingly exposed to sulphuric acid availability and pricing. Acid is a reagent cost for leaching operations.

Smelters can benefit from higher sulphuric acid prices when they sell acid as a by-product. SX-EW producers face the opposite exposure, as higher acid costs directly pressure operating margins.

Higher diesel prices are adding to the problem. Codelco said Middle East-related cost increases lifted its cash cost by at least 10¢/lb.

Antucoya also showed the cost pressure. Output weakened, while costs rose by 23% year on year to $3.03/lb on higher sulphuric acid and diesel prices.

Chile’s investment pipeline remains significant but long-dated. Freeport-McMoRan has started environmental permitting for a $7.5bn expansion of El Abra.

The project aims to lift production to around 300,000 t/yr from 91,400t in 2025. But it requires a new concentrator and desalination plant and is not expected to start until the next decade.

That timing is critical for the market. Chile has projects, but they will not solve immediate supply tightness.

The first-quarter decline therefore strengthens copper’s structural bull case. Global demand is rising, while Chile’s mature mine base is struggling to deliver stable growth.

The Metalnomist Commentary

Chile’s copper problem is no longer only grade decline; it is now a combined issue of mine maturity, acid exposure, fuel costs and delayed expansion. The market should treat Chilean supply recovery as a slow process, not a quick response to record copper prices.

Copper Prices Plunge Amid Rising Inventories and Global Recession Fears

Copper prices have plummeted to a two-month low as rising global stockpiles and fears of an impending economic recession weigh heavily on the market. The London Metal Exchange (LME) three-month copper prices dropped to $8,714 per metric tonne on August 5, a significant decline from the record high of $11,104.50 per metric tonne reached on May 20. Similarly, the most traded September contracts on the Shanghai Futures Exchange closed at 71,390 yuan per tonne ($9,934/t) on August 7, down from a historical high of 88,940 yuan per tonne on May 20.

The decline in copper prices has been driven by a surge in global exchange copper stocks, which soared to a three-year high of 556,033 metric tonnes on August 2, up from 215,269 metric tonnes in December 2023. This increase is largely attributed to rapid output growth and subdued demand from China, the world’s largest consumer of copper.

Global refined copper production saw a 6% year-on-year increase from January to May, fueled by capacity expansions in China and the Democratic Republic of the Congo (DRC). Chinese smelters alone added approximately 800,000 tonnes per year of new capacity, primarily in the second half of 2023. CMOC, a diversified metals and minerals producer, reported a doubling of copper production from its DRC operations to 313,400 tonnes during the first half of 2024.

Further production increases are anticipated as new projects come online in the latter half of the year. US-based mining giant Freeport McMoran recently completed the construction of its Manyar smelter in Indonesia, with a production capacity of 300,000 tonnes per year, set to begin copper cathode manufacturing soon. Additionally, Indonesia’s Amman Mineral Nusa Tenggara and China’s Jinchuan Group are expected to add significant capacity in the coming months.

Despite the surge in output, copper demand growth has lagged, particularly in China. Demand is projected to increase by only 2-3% this year, hindered by a 21.8% decline in the completion of new housing projects during the first half of the year. The power grid sector, China’s second-largest consumer of copper, has also seen moderate demand growth, with investments shifting toward aluminum-intensive ultra-high voltage grids.

Emerging sectors such as new energy vehicles and solar photovoltaics have seen steady copper demand growth, but not enough to offset the slowdown in the real estate and power grid sectors. Market participants remain cautious about the overall outlook.

Macroeconomic concerns have further exacerbated the situation. Weaker-than-expected US employment data for July, coupled with declining manufacturing indices in both the US and China, have fueled fears of a global recession. The US Federal Reserve’s emergency meeting on August 5, following a collapse in Japan’s stock market, has added to the uncertainty.

However, some positive factors may support copper prices in the near term. A continued shortage of copper concentrate feedstock and the suspension of several Chinese secondary copper processors due to a tax rebate cancellation may lead to production cuts. Additionally, a strike at BHP’s Escondida copper mine in Chile could further tighten supply.

The rapid development of the artificial intelligence (AI) industry in the US is expected to drive copper demand in the grid system, particularly in states like Virginia, where commercial electricity demand has surged due to the growth of AI databases.

Chinese Firms Intensify Investments in Cu-Co Mining in the Democratic Republic of Congo

In a strategic maneuver to secure a steady supply of crucial resources, Chinese enterprises are significantly amplifying their investments in the copper-cobalt reserves of the Democratic Republic of Congo (DRC). This initiative addresses China's limited cobalt resources and the enduringly strong copper market.

Leading the charge are prominent entities such as diversified metals producer CMOC, China Railways Resources, China Nonferrous Metal Mining, Norin Mining, Excellent Mining, and Huayou Cobalt. According to data compiled by Metalnomist, the DRC produced approximately 167,000 metric tons of cobalt feedstock in 2023, with Chinese mining companies contributing around 59% of this total output. Presently, Chinese investments account for over 62% of the DRC’s total cobalt reserves, a remarkable increase from roughly 25% in 2016. This proportion is anticipated to expand further following Norin Mining's acquisition of Dubai-based Chemaf Resources (CRL).

China’s dependency on imported cobalt, which constitutes nearly 99% of its primary feedstock, has propelled these extensive investments. The DRC remains the foremost supplier of cobalt feedstock to China, accounting for 84% of China's total imports in 2023, trailed by Indonesia (10%), Papua New Guinea (1.6%), and New Caledonia (1.5%).

This domestic resource shortfall has driven Chinese mining firms to intensify their investments in the DRC’s copper and cobalt assets over recent years. CMOC, a global titan in mining cobalt, copper, tungsten, molybdenum, and niobium with operations spanning China, the DRC, Australia, and Brazil, acquired a 56% stake in the Tenke Fungurume copper-cobalt mine (TFM) from US-based Freeport-McMoRan in 2016, later increasing its stake to 80% in 2017. Additionally, CMOC finalized its acquisition of the Kisanfu copper-cobalt mine (KFM) in December 2020.

With copper prices maintaining an upward trajectory since early this year, achieving new heights on the Shanghai Futures Exchange (SHFE) and London Metals Exchange (LME) in mid-May, mining firms have been further incentivized to augment their investments in the DRC’s copper-cobalt mines.

Norin Mining's acquisition of CRL, which controls two copper-cobalt mines in the DRC, underscores this trend. Norin Mining Kingco, a wholly-owned subsidiary of Norin Mining, has entered into a share purchase agreement with CRL’s parent company Chemaf to acquire all of Chemaf's shares in CRL. The financial details of the transaction remain undisclosed, yet CRL anticipates completing the deal in the fourth quarter of 2024.

Nevertheless, the state mining company Gecamines has expressed opposition to the sale of Chemaf Resources, potentially delaying the acquisition process. A source familiar with the matter noted, "The acquisition is expected to be delayed for a while because of Gecamines' opposition, but it will probably be resolved later without significantly impacting the acquisition."

Chemaf SA is progressing with the expansion of the Etoile mine (Etoile phase 2) to process mixed and sulphide ore, alongside developing a new Mutoshi mine. Both projects, in advanced stages of development, have the potential to collectively produce over 75,000 metric tons of copper and 20,000 metric tons of cobalt hydroxide annually. These new ventures are expected to commence production in 2025, post-acquisition.

Chile to Boost Global Copper Production Share by 2034

Chile Copper

Strategic Mining Investments Propel Growth

Chile is poised to increase its stake in the global copper market significantly, with the Chilean copper commission, Cochilco, projecting that the country will enhance its share from 24% in 2023 to 27% by 2034. This growth is anticipated to come from new mining projects and expansions in the sector.

Rising Production and Investment Trends

According to Cochilco's recent forecast, Chile will see a steady increase in copper production, achieving a peak of 6.07 million tonnes by 2027. The forecasted growth represents a 5.6% increase annually over the next decade, culminating in a production of 5.54 million tonnes by 2034, up from 5.25 million tonnes in 2024. This expansion is supported by Chile’s extensive mining investment portfolio, which includes significant initiatives like the proposed $7.5 billion expansion of the El Abra mine, a collaborative effort between the U.S. firm Freeport-McMoran and Chile's state copper company, Codelco.

Shift in Production Dynamics

Cochilco’s report also highlights a shift towards the production of copper concentrates, which are expected to constitute 88% of Chile’s total copper output by 2034, up from 80% in 2024. This change is due to a decline in copper cathode output, driven by the depletion of oxide deposits. Additionally, global copper production is projected to reach a peak of over 25 million tonnes in 2026, before a gradual decline to around 20 million tonnes by 2034.

Indonesia’s Nickel Ambitions Face Obstacles Amid HPAL Expansion

HPAL

Indonesia is poised to increase its nickel production in the coming years, primarily by boosting its high-pressure acid-leaching (HPAL) capacity. However, this ambitious plan faces significant hurdles, notably the scarcity of sulphuric acid and challenges in managing tailings waste effectively. Despite these concerns, production is still expected to grow, even as the global nickel market anticipates a surplus.

Sulphuric Acid Supply and Tailings Management: Key Challenges

The HPAL process relies heavily on sulphuric acid to extract nickel and cobalt from ore, producing mixed hydroxide precipitate (MHP), which is essential for downstream nickel sulphate and battery production. Indonesia is projected to produce between 325,000 to 345,000 tons of MHP this year, a jump from 269,000 tons in 2023. With several new MHP projects on the horizon, output is expected to rise significantly, potentially tripling to 800,000-900,000 tons by 2026, as highlighted by Indonesia's Deputy Minister Septian Hario Seto during a recent metal industry event in London.

The increase in MHP production will necessitate more nickel ore and sulphuric acid, raising concerns about the sustainability of limonite ore supplies, which could deplete quickly like saprolite ore, currently used for nickel pig iron and matte production. The Indonesian government plans to address these issues with industry stakeholders.

Currently, Indonesia's four operational HPAL facilities—Huayou's Huayue and Huafei projects, GEM's QMB project, and Lygend's HPAL project—have been importing sulphuric acid primarily from China and South Korea. However, the rising cost has led some producers, such as Halmahera Persada Lygend, to switch to cheaper sulphur alternatives. The startup of new smelters, like Freeport McMoran's Manyar in Java and AMNT's copper smelter in Nusa Tenggara, is expected to add 3 million tons per year of acid capacity by 2025, potentially easing supply pressures.

Another critical issue is the proper disposal of tailings waste, which has come under increased scrutiny due to environmental, social, and governance (ESG) standards. The HPAL process generates substantial amounts of waste, with energy consultancy Wood Mackenzie estimating 1.4-1.6 tons of tailings per ton of nickel produced. Three disposal methods—tailings dams, deep sea disposal, and dry stacking—each have their risks, with dry stacking viewed as the more sustainable option. Yet, Indonesia’s wet climate and seismic activity pose challenges for safe waste storage.

To ensure the successful expansion of its HPAL production, Indonesia must secure a stable supply of sulphuric acid and implement sustainable methods for managing tailings waste. Addressing these issues is critical for maintaining the momentum in the country’s nickel production growth while adhering to stricter ESG standards.

CMOC's Cobalt and Copper Output Soars in 2024, Boosting China's Supply

CMOC's

Chinese mining giant CMOC has reported a significant surge in its copper and cobalt production for 2024, primarily fueled by increased output from its operations in the Democratic Republic of Congo (DRC).  This production boost has subsequently impacted China's imports of these critical metals.

DRC Operations Drive Record Production

CMOC's cobalt production more than doubled in 2024, reaching 114,165 tonnes (metal equivalent), compared to 55,526 tonnes in 2023. This dramatic increase is attributed to higher output from the company's Tenke Fungurume copper-cobalt mine (TFM) and the newly developed Kisanfu copper-cobalt mine (KFM) in the DRC. KFM commenced production in the first half of 2023.  CMOC acquired a 56% stake in TFM from Freeport-McMoRan in 2016, increasing its ownership to 80% in 2017. The acquisition of KFM was completed in December 2020.  KFM is jointly owned by CMOC (71.25%), Brunp, a subsidiary of Contemporary Amperex Technology (CATL), (23.75%), and DRC's state-owned Gecamines.

The company also saw a substantial rise in copper production, reaching 650,161 tonnes in 2024, a 55% increase year-on-year and 14% above its annual production guidance. This growth is partly due to the three new production lines at its mixed ore project at TFM reaching full capacity in the first half of 2024.  TFM now boasts five production lines with a combined capacity of 450,000 tonnes per year.  The KFM mine has achieved a copper capacity of 150,000 tonnes per year.

Impact on China's Metal Imports

The increased cobalt output from CMOC's DRC operations has significantly impacted China's feedstock imports.  Customs data reveals that China imported 172,580 tonnes of cobalt metal equivalent of intermediate products between January and November, a 74% surge compared to the same period the previous year.  Notably, approximately 98.7% of these imports originated from the DRC, a region where the world's two largest cobalt feedstock producers, CMOC and Glencore, operate copper and cobalt mines.  CMOC also holds a 30% stake in Huayue Nickel Cobalt, a joint venture with Huayou Cobalt and Tsingshan in Indonesia.

Looking ahead, CMOC is pursuing further production expansions as part of its five-year plan starting in 2025. These plans include the West Area project at TFM and the second phase of KFM, both of which are currently in the preliminary exploration stage.