Freeport Stock Outlook: Copper Prices vs. Grasberg Risks

Freeport stock holds steady as copper prices rise despite Grasberg mine disruption.SOPA Images/LightRocket via Getty Images

In the third quarter of 2025, Freeport-McMoRan's (NYSE:FCX)[1] revenues increased to approximately US£6.97 billion, a modest rise from about US£6.79 billion a year prior. The company reported net income attributable to common stock of around US£674 million -- equating to US£0.46 per share -- an increase from US£0.36 in Q3 2024. These improvements occurred despite a decline in production: copper output decreased by roughly 13.2% year-over-year to 912 million pounds, and consolidated copper sales dropped to 977 million pounds, down from 1,035 million a year ago.

Sales of gold and molybdenum also experienced declines. The reason for this decline: a significant safety and operational disruption at Freeport's flagship Grasberg Mine in Indonesia. A "mud-rush" incident at the site in September 2025 compelled the company to halt operations there, dramatically reducing production and leading to a force-majeure declaration for its exports from Indonesia.

However, despite reduced volumes, Freeport succeeded in maintaining its bottom line due to higher realized commodity prices. Copper averaged US£4.68 per pound for the quarter (up ~9% from a year earlier), and gold reached ~US£3,539 per ounce -- both significantly enhancing revenue per pound of output. If you are looking for an upside with less volatility than holding an individual stock, consider the High Quality Portfolio.

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Strengths And Structural Stability Behind The Numbers

What stands out in Q3 is Freeport's ability to take advantage of strong metal prices while keeping costs disciplined. The consolidated unit net cash cost for copper remained at approximately US£1.40 per pound -- nearly unchanged from last year, and below guidance expectations.

Although cash flows decreased compared to the previous quarter, operating cash flow still reached over US£1.6 billion for Q3. Furthermore, Freeport isn't solely dependent on the Indonesian mine. Its operations in the Americas continue to produce copper, gold, and molybdenum.

This geographic diversification provides resilience, lessening the impact of the Grasberg disruption. Lastly -- and importantly -- Freeport commenced the quarter with a robust financial foundation: billions in cash reserves and a manageable debt load. This gives the company flexibility to maneuver through the current crisis, sustain investments, and wait for operations to resume.

What's Next: Key Risks And Room For Optimism

Looking forward, much hinges on how swiftly Freeport can restore output at Grasberg.

The company has indicated a phased restart plan, but with production losses in Q3, and guidance suggesting that 2025 volumes may remain below previous estimates, 2026 might be a tough year. Conversely, if global demand for copper and gold remains strong -- driven by infrastructure projects, renewable energy initiatives, and industrial needs -- and commodity prices stay high, Freeport's low-cost structure and diversified mines may enable it to endure the disruption without a significant decline in cash flow. Additionally, Freeport's operations outside Indonesia and its molybdenum production provide a cushion.

If those remain stable, the company has a chance to withstand current challenges and recover. However, extended shutdowns at Grasberg, additional safety or environmental issues, or a decline in commodity prices are still considerable risks.

The Verdict

Q3 2025 was a mixed performance for Freeport-McMoRan: production challenges and mine-specific risks weighed on volumes, yet robust metal prices, controlled costs, and diversified operations aided in maintaining profitability. Freeport is not merely a short-term recovery narrative.

Its extensive global presence, balanced mix of metals, and sound financial health offer a solid opportunity for rebound -- assuming key mines like Grasberg can safely restart, and demand for commodities remains strong. We value Freeport[4] stock at £46, approximately 7% above the current market price. Now, we apply a risk assessment framework while constructing the Trefis High Quality (HQ) Portfolio, which, featuring 30 stocks, has consistently outperformed the S&P 500 over the last four-year period -- and has generated returns exceeding 105% since its inception.

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References

1. ^ Freeport-McMoRan's (NYSE:FCX) (www.trefis.com)
2. ^ High Quality Portfolio (www.trefis.com)
3. ^ What's Next For Gamestop Stock After The 38% Drop? (www.trefis.com)
4. ^ value Freeport (www.trefis.com)
5. ^ High Quality (HQ) Portfolio (www.trefis.com)
6. ^ HQ Portfolio performance metrics (www.trefis.com)