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| Freeport-McMoRan |
Tariff boost short-term profits, but long-term risks loom for domestic mining
Freeport-McMoRan CEO Kathleen Quirk has cautioned that US plans to impose tariffs on foreign copper imports could ultimately harm the very industry they aim to support. Despite Freeport temporarily benefiting from higher domestic copper prices — trading at a 9.3% premium over global markets — Quirk warns that broader trade disruptions could depress global copper demand and jeopardize US mining expansion.
Speaking from Freeport’s Phoenix headquarters, Quirk emphasized the irony of tariff-fueled protectionism: while US copper fetches a premium due to tariff fears, slowing global growth from trade wars may erode long-term copper demand, hurting both domestic and international operations.
Freeport, which accounts for about 70% of processed US copper, has reported up to $800 million in annual gains from these price differentials. However, Quirk remains cautious, calling for alternative incentives such as tax credits akin to those granted to lithium and nickel producers under the Inflation Reduction Act, rather than punitive trade measures.
President Donald Trump initiated a Section 232 investigation into copper imports in February, citing national security — a move that could allow sweeping restrictions. But industries reliant on copper, from automotive to electronics, may face elevated costs, raising economic concerns.
Freeport is actively expanding US assets, including several Arizona mines and a possible extension of its Miami smelter, yet Quirk described these as modest due to high costs and declining ore grades. US production costs are over three times higher than Freeport’s operations in Indonesia, Chile, and Peru.
With shares down 14% since Quirk assumed the CEO role in June 2023, Freeport is navigating a delicate balance: benefiting from temporary price premiums while urging long-term support for domestic mining competitiveness through structural reforms.
ScrapInsight Editorial Commentary
Tariff-driven copper premiums offer a short-term win for Freeport, but the bigger picture demands more than temporary market distortion. As Quirk suggests, the solution lies not in blunt instruments like import tariffs, but in targeted incentives that lower cost structures and promote US mining innovation — before global competition leaves American producers behind.
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