Feb 25 (Reuters) - Freeport-McMoRan Inc is set to
approve expansions at several of its U.S. copper mines to
capitalize on surging demand for the red metal as President Joe
Biden moves to electrify the nation's automobiles and combat
climate change, Chief Executive Richard Adkerson told Reuters.
The expansions would be a major bet on the U.S. economy -
one of the company's largest markets - and also on the rising
demand for electric vehicles (EVs), which use twice as much
copper as internal combustion engines.
Adkerson also said he has no desire to combine Freeport with
Barrick Gold Corp or another gold producer and is
working to give COVID-19 vaccines to about 25,000 workers at the
Grasberg copper mine in Indonesia, which Freeport owns with that
country's government. He also is aiming to double the size of
the company's board of directors.
Phoenix-based Freeport already produces more than 1 billion
pounds of copper each year in the United States, little of which
is exported. While the company opened a new U.S. mine last year
in Arizona, it could soon greenlight expansions at three mines
in the U.S. Southwest, Adkerson said, adding more than 250
million pounds of copper each year to U.S. output.
"President Biden clearly has a commitment to addressing
climate change, and any climate change initiative creates demand
for copper," Adkerson, who became Freeport's chairman on Feb. 2,
said in an interview this week. "We're very well-situated to
address that with the assets we have."
Biden met with lawmakers on Wednesday to discuss how to
secure supplies of electric vehicles and the minerals used to
Just a year ago, Freeport worried about "our ability to
continue operating" due to the coronavirus pandemic, Adkerson
said. With copper prices hovering near $2 a pound last
April, the company was forced to make budget and dividend cuts.
Copper is a key barometer of economic health due to its use
in manufacturing. In the last six months, copper prices have
slowly rebounded to just above $4 a pound and Freeport's stock
has more than doubled.
"Now we can turn our attention to focusing on these growth
opportunities," Adkerson said, adding that any expansions would
take several years to bring online. That timeline implies the
company remains bullish on copper for the long run.
The option to expand existing mines, rather than building
new ones, gives Freeport an advantage over its rivals, Adkerson
said. Rio Tinto Plc, for instance, is trying to build
the Resolution Copper mine in Arizona, a project that Native
Americans oppose on religious grounds. Adkerson declined to
comment on that dispute.
The combination of Freeport's improving sales and stock
price has seemingly shooed away potential bidders, including
Barrick. Last year, Barrick CEO Mark Bristow expressed interest
At the time, Barrick's market value was twice that of
Freeport. Now, given its stock surge, Freeport is worth $20
billion more than Barrick. Bristow told investors last week his
first priority now is to expand the assets Barrick already owns.
"I don't believe it makes sense to combine a company like
ours with a gold company," Adkerson said. "But I don't criticize
Mark (Bristow) for thinking we have good assets."
Freeport's commitment to copper, Adkerson said, will remain
and the company will avoid lithium, rare earths and some other
EV metals that are getting more attention on Wall Street. The
company is the world's largest producer of molybdenum, a metal
often found with copper and that can be used to make some types
of EV batteries and airbags.
Adkerson, who has been CEO since 2003 and is now 74, said he
has no plans to retire.
"We're on the verge of really great success, and thank God
I've got the health and energy to be a part of it," he said.
(Reporting by Ernest Scheyder; Editing by Amran Abocar and Paul