Freeport-McMoRan poised to gain from Trump’s copper tariff

FREEPORT-McMoRan could see a$1.6-billion boost to annual profit if President Donald J. Trump's copper tariff materializes, a benefit driven by the firm’s role as the largest US producer with more expansion options than rivals.

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Responsible for 60% of US copper output, Phoenix-based Freeport has since the 19th century cultivated US mine projects that have decades of growth potential without the need for fresh permitting.

Other companies have struggled due to the stubborn reality of American mining: It takes years to build a US mine.

Mr. Trump announced on Wednesday a 50% tariff on imports of the metal used in construction, electronics, and nearly every part of the economy. It would be the first time Washington has imposed a copper tariff if enacted by Mr. Trump’s Aug. I start date.

The initial announcement on Tuesday, which pushed Freeport stock up 5%, sparked questions about where Mr. Trump hopes to procure the metal, given longstanding hurdles to building mines and smelters, and few options outside of Freeport’s seven US copper mines.

“The longer-term aim of the Trump administration may be for the US to be fully self-sufficient in copper, but mines take too long to develop for this to be achieved in less than a 10-year time horizon,” said Jefferies analyst Chris LaFemina.

The US imports roughly half of its copper needs, mostly from Chile, Canada, and Peru. China is the world’s largest smelter and consumer of copper, with global demand poised to jump at least 60% by 2050, according to the International Energy Agency.