Why Freeport-McMoRan Is the Copper Play to Own in a Tariff-War World

The U.S. government’s push to secure domestic supply chains for critical minerals has created a once-in-a-generation opportunity for Freeport-McMoRan (FCX). As the de facto monopoly of American copper production—accounting for 70% of the nation’s refined copper output—FCX is uniquely positioned to capitalize on a perfect storm of trade tensions, electrification demand, and federal policy support. With its leaching innovations and tariff-driven pricing power, this undervalued miner is primed to outperform even in a volatile metals market.

The U.S. Copper Monopoly: A Structural Moat

Freeport’s dominance isn’t just about scale. Its seven open-pit mines in Arizona and New Mexico—operating at a time when global copper imports face Section 232 tariffs—give it a strategic monopoly over a resource deemed critical for energy transition. With China accounting for 40% of global copper imports, U.S. policymakers are desperate to insulate domestic industries like EV manufacturing and grid infrastructure from supply shocks.

This geopolitical tailwind translates into $800 million in annual EBITDA benefits from the 13% U.S. copper price premium over global benchmarks. As shows, this spread has widened steadily since Section 232 tariffs were imposed in late 2023, locking in fat margins for FCX.

Leaching: The $800M/Lbs Growth Engine

While rivals grapple with falling ore grades and rising costs, Freeport’s leaching technology is a game-changer. By 2030, its Arizona operations aim to produce 800 million pounds annually of low-cost copper through this process—a 267% increase from its 2025 target of 300 million pounds. This shift slashes cash costs to as low as $1.60/lb by 2026, even as global peers face cost inflation.

The leaching ramp-up isn’t just about volume. It’s about marginal profitability: every additional pound produced at $1.60/lb sells into a market where U.S. prices hit $4.00/lb (as of May 2025). At this premium, the 2030 leaching target alone could add $2.4 billion annually to EBITDA—a figure larger than the company’s entire 2023 net income.

Undervalued Against 2026 EBITDA Forecasts

Despite these tailwinds, FCX trades at a staggering discount to its growth potential. Analysts project $13.6 billion in EBITDA by 2026 at $4/lb copper prices—a conservative assumption given lithium-ion battery demand and the Inflation Reduction Act’s green energy subsidies. Yet FCX’s enterprise value (EV) remains stuck at $61.7 billion, implying an EV/EBITDA multiple of just 4.5x.

For comparison, copper peers like BHP and Rio Tinto trade at 9–12x EBITDA, while EV battery stocks likeioneer (LNMR) command multiples over 20x. This disconnect exists because the market underestimates FCX’s dual moats: its domestic monopoly and its leaching-driven cost advantage.

The Catalysts Igniting in 2025

• Section 232 Expansion: The Biden administration is finalizing rules to classify copper as a “critical mineral,” potentially unlocking a 10% tax credit for domestic production—a $135 million annual boost at current output levels.
• Grasberg Smelter Repairs: The $100 million insurance settlement for damage at Freeport’s Indonesian smelter removes a key risk, ensuring steady concentrate exports.
• Earnings Surprise Potential: At current copper prices (~$3.90/lb), 2025 EBITDA could hit $10.5 billion, surpassing consensus estimates and triggering a rerating.

Risks? Yes—but Overblown

Bearish arguments focus on $3/lb copper prices or a U.S. recession. Even in a worst-case scenario, FCX’s 70% domestic market share ensures it gets first dibs on federal contracts, while leaching’s cost efficiency keeps it profitable below $2.50/lb. Meanwhile, a recession would likely accelerate the push for “reshored” copper production, further entrenching FCX’s position.

Why Buy Now?

The math is simple: $61.7 billion EV vs. $13.6 billion EBITDA in 2026 leaves massive upside. Add in the $15 billion+ EBITDA ceiling at $5/lb copper (a realistic scenario if EV adoption hits 20% of U.S. vehicles by 2030) and the 10% tax credit, and FCX’s fair value approaches $100 billion.

Investors who wait for “better entry points” risk missing the rally. As the U.S. races to secure its energy future, FCX isn’t just a copper play—it’s a national infrastructure play. The time to buy is now.

This article is for informational purposes only and does not constitute financial advice.