Grasberg ramp-up delayed; production rate cut to 60k tpd in H2 2026
Freeport-McMoRan reported Q1 2026 results and lowered Grasberg Block Cave ramp-up expectations due to an unexpected increase in wet draw points, requiring chute modifications to handle material consistency. The company reduced its five-year copper production outlook by ~9% and raised 2026 unit cost guidance to $1.95/lb. Management expressed confidence in the long-term solution but acknowledged near-term delays. Elsewhere, they highlighted progress on leaching technology and brownfield growth projects in the Americas. Grasberg ramp-up cut: PB2 and PB3 now expected to reach only 60k tpd in H2 2026 (vs prior 100k tpd), rising to ~90k tpd by mid-2027 after installing specialized chute regulators.
Buzzberg readGrasberg ramp-up delayed; production rate cut to 60k tpd in H2 2026Freeport-McMoRan reported Q1 2026 results and lowered Grasberg Block Cave ramp-up expectations due to an unexpected increase in wet draw points, requiring chute modifications to handle material consistency. The company reduced its five-year copper production outlook by ~9% and raised 2026 unit cost guidance to $1.95/lb. Management expressed confidence in the long-term solution but acknowledged near-term delays. Elsewhere, they highlighted progress on leaching technology and brownfield growth projects in the Americas. Grasberg ramp-up cut: PB2 and PB3 now expected to reach only 60k tpd in H2 2026 (vs prior 100k tpd), rising to ~90k tpd by mid-2027 after installing specialized chute regulators.Read full analysisCollapse analysis
Freeport-McMoRan reported Q1 2026 results and lowered Grasberg Block Cave ramp-up expectations due to an unexpected increase in wet draw points, requiring chute modifications to handle material consistency. The company reduced its five-year copper production outlook by ~9% and raised 2026 unit cost guidance to $1.95/lb. Management expressed confidence in the long-term solution but acknowledged near-term delays. Elsewhere, they highlighted progress on leaching technology and brownfield growth projects in the Americas. Grasberg ramp-up cut: PB2 and PB3 now expected to reach only 60k tpd in H2 2026 (vs prior 100k tpd), rising to ~90k tpd by mid-2027 after installing specialized chute regulators.
Wet draw points increased from 30% to 45% of total after the production halt, creating blending bottlenecks that require new spilminator equipment.
2026 net unit cost guidance raised to $1.95/lb from $1.75/lb, driven by lower Grasberg volumes and higher diesel costs.
Five-year Grasberg district copper production reduced by ~9% and gold by ~7%, with the largest impacts in 2026-2027; resource not lost, just delayed.
Revenue$6.234B
+11% QoQ
EPS$0.57
+21% QoQ
Gross margin26.55%
reported
Op margin34.28%
reported
What changed this quarter
01
Guidance
Grasberg ramp-up delayed; production rate cut to 60k tpd in H2 2026
Guidance tone
02
Guidance
Grasberg delays are timing, not resource loss
Guidance tone
03
Demand
Copper demand strong from AI data centers and grid
Management acknowledged operational challenges at Grasberg but emphasized engineered solutions, long-term recovery of resources, and confidence in the team, while maintaining a cautious but optimistic outlook overall.
04
Innovation
Leach initiative targets 800 million pounds by 2030
2026 net unit cost guidance raised to $1.95/lb from $1.75/lb, driven by lower Grasberg volumes and higher diesel costs.
AI, capex & demand read
AI
Platform & monetization
Management highlighted strong demand for copper from AI data centers and related energy infrastructure, with U.S. customers reporting rising demand that more than offsets weakness in other sectors. They also discussed using AI tools to enhance operating performance.
Demand
Bookings & conversion
Copper demand strong from AI data centers and grid. Management acknowledged operational challenges at Grasberg but emphasized engineered solutions, long-term recovery of resources, and confidence in the team, while maintaining a cautious but optimistic outlook overall.
Capex
Investment and capacity
Capital expenditure guidance for 2026 and 2027 remains at approximately $4.3 billion and $4.5 billion, respectively. Discretionary projects are around $1.6-1.7 billion annually, funding growth projects like the Bagdad expansion, El Abra expansion, leaching initiatives, and Grasberg development. The chute modifications at Grasberg add only $60-70 million, offset by timing variances.
Tone · Measured
Management acknowledged operational challenges at Grasberg but emphasized engineered solutions, long-term recovery of resources, and confidence in the team, while maintaining a cautious but optimistic outlook overall.
Bottlenecks
Manufacturing capacity
Our current forecast reflects our best estimate of the timeframe to address the current bottleneck.
“Our current forecast reflects our best estimate of the timeframe to address the current bottleneck.”
The bottleneck we are addressing relates to the chutes that are used to load the automated trains at the haulage level, and we show photos of the current chute design and the replacement equipment to regulate the flow of wet material into the rail cars.
“The bottleneck we are addressing relates to the chutes that are used to load the automated trains at the haulage level, and we show photos of the current chute design and the replacement equipment to regulate the flow of wet material into t”