Inside Copper Miners’ 2018 Operating Plans

Freeport-McMoRan

In this article, we’ll look at different copper miners’ production plans. During its second-quarter earnings release, Freeport-McMoRan (FCX) maintained its 2018 shipment guidance at 3.8 billion pounds.

During its earnings call, Freeport announced new operating plans in Indonesia, which could lower its production in 2020.

Inside Copper Miners’ 2018 Operating Plans

Rio Tinto (RIO) and Antofagasta (ANTO) kept their 2018 copper production guidances unchanged during their respective second-quarter production report releases. Rio Tinto has assumed its copper share in Grasberg to be zero in 2018. The company has announced a nonbinding heads of agreement to sell its entire stake in its Grasberg mine to Indonesia. Anglo American (AAL-L) has also maintained its 2018 copper production guidance of 630,000–660,000 metric tons.

BHP Billiton

BHP Billiton’s (BHP) fiscal year ends on June 30. The company produced 1.75 billion tons of copper in fiscal 2018 and expects its fiscal 2019 copper production to be between 1.65 billion tons and 1.77 billion tons. Even at the top end of its guidance, BHP expects its Escondida mine’s copper production to be lower in fiscal 2019 than it was in fiscal 2018. The mine, which is the world’s largest, has been grappling with falling ore grades.

Incidentally, falling ore grades at leading copper mines have been fueling copper’s bullish thesis. Copper bulls expect falling ore grades coupled with new discoveries to push copper markets into a state of structural supply shortfall in the next decade. At least this year, however, copper bulls have been left heartbroken as copper supply has been resilient despite a flurry of labor negotiations.

In the next article, we’ll look at copper miners’ second-quarter unit cash costs.