Freeport-McMoRan said on Wednesday that its board has approved a $4.5 billion expansion and modernisation program for the wholly owned Bagdad copper and molybdenum operation in northwest Arizona. The brownfield project is designed to more than double Bagdad’s mining and milling rates, raising annual long-term copper production to over 400 million pounds, an increment of about 225 million pounds, and molybdenum production to over 20 million pounds a year, an increment of 12 million pounds. Freeport said the expanded mine would become the second-largest copper producer in the United States and a top US molybdenum producer, and that modern technology, automation and economies of scale should cut long-term unit net cash costs by about 20 percent.
The approval settles a decision Freeport had flagged in its third-quarter results, when it said studies pointed to roughly $4.5 billion of incremental capital for a new concentrator, mining equipment and expanded infrastructure, with a final decision due by the end of 2026 and economics supported at an incentive copper price of about $4.00 a pound. The approved program carries the same price test, put at a break-even of approximately $4.00 a pound for copper and $20 a pound for molybdenum, and the same headline cost. Spending will be classified as discretionary under the company’s financial policy, with about 20 percent of project costs expected in 2027, 30 to 35 percent in 2028, and the balance across 2029 and 2030.
Construction is expected to take about three and a half years, with initial production targeted for mid-2030. Bagdad has operated since 1945 and, on the company’s figures, has a reserve life exceeding 80 years before counting additional mineral resources. Freeport cautioned that the capital estimates rest on current market conditions and could be affected by inflation and cost escalation.