Freeport's gold business shines despite bullion's worst quarterly decline since 2013
Even as gold prices suffered their steepest quarterly decline in more than 13 years, the mining sector continues to set a brisk pace as earnings season kicks off with the world’s largest copper producer.
Although its core metal is copper, Freeport-McMoRan's (NYSE: FCX) gold business proved remarkably resilient, underscoring how elevated bullion prices continue to support the company’s earnings.
Despite gold’s sharp correction, prices remained elevated by historical standards, allowing Freeport to realize an average gold price of $4,520 an ounce, a 37% increase from $3,291 an ounce in the second quarter of 2025. At the same time, the copper price climbed 36% to $6.17 per pound from $4.54 per pound in the second quarter of 2025.
The stronger gold price, combined with robust copper prices, helped Freeport report adjusted second-quarter earnings of $1.1 billion, or $0.74 per share, compared with $790 million, or $0.54 per share, a year earlier. Net income attributable to shareholders rose to $984 million, or $0.68 per share.
The company’s earnings were slightly lower than analyst expectations as consensus estimates forecasted $0.78 per share.
"Our team achieved strong results in the second quarter, supported by solid execution of our operating plans and favorable pricing for our products," said President and CEO Kathleen Quirk. "We made steady progress with our Grasberg ramp-up and our Americas operations delivered excellent performance, which resulted in year-over-year improvements to bottom-line results."
Freeport produced 192,000 ounces of gold and sold 123,000 ounces during the quarter. Gold production remains constrained by the ongoing recovery of the company's Grasberg Block Cave underground mine in Indonesia, where operations continue to ramp up following last September's mud rush incident. Copper production totaled 786 million pounds, while copper sales of 710 million pounds exceeded the company's April guidance.
Management said the Grasberg recovery remains on schedule. Production Blocks 2 and 3 achieved their planned operating rates during the second quarter, and the company expects the mine to operate at approximately 65% of capacity during the second half of 2026, reaching 80% by mid-2027 before returning to full production by the end of next year.
Grasberg remains one of the world's premier gold assets. At full operating rates, the underground complex is expected to produce roughly 1.3 million ounces of gold annually, alongside 1.7 billion pounds of copper, making the successful restoration of operations one of the mining sector's most closely watched developments.
Looking ahead, Freeport expects to sell approximately 650,000 ounces of gold this year while assuming an average gold price of $4,000 an ounce during the second half of 2026. Under that price scenario, the company forecasts full-year operating cash flow of roughly $8.3 billion, highlighting how even after gold's sharp quarterly correction, prices remain high enough to generate substantial cash flow for major producers.
