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FCX vs. SCCO: Which Copper Mining Giant is a Better Pick Now?
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Key Takeaways
FCX's expansion projects aim to boost copper output, backed by a strong financial health.
SCCO plans $20.5B in investments to lift output to 1.6M tons, but faces near-term declines.
Both companies balance dividends, cash flow and investments amid market volatility.
Freeport-McMoRan Inc. (FCX - Free Report) and Southern Copper Corporation (SCCO - Free Report) are two heavyweights in the copper mining industry. Both operate on a global scale, extracting and processing copper and other metals. Also, both are navigating fluctuating copper prices and global economic uncertainties.
Copper prices started 2026 on a strong note, underpinned by robust demand from China and the United States. Structural tailwinds, including electric vehicles (EVs), renewable energy projects, data center growth and grid modernization, continue to boost copper consumption. Worries about tightening supply amid rising EV and infrastructure demand also supported the red metal. These factors led to prices surging to roughly $6.4 per pound in late January. Prices of the red metal were mostly volatile during February, largely trading near $6 per pound.
Copper prices came under pressure in March amid concerns about the impact of surging oil prices on the global economy due to the war in the Middle East, dragging down prices to a three-month low of around $5.3 per pound in late March. Prices rebounded in April on hopes of a de-escalation in the Iran war. Prices shot up to a record high of around $6.6 per pound last week amid robust demand in China and supply worries linked to the Middle East conflict. Prices have pulled back from that level amid war-related uncertainties and are currently hovering near $6.3 per pound.
Let’s dive deep and closely compare the fundamentals of these two copper mining companies to determine which one is a better investment now.
The Case for Freeport
Freeport continues to leverage its portfolio of high-quality copper assets, emphasizing disciplined execution and organic growth initiatives to strengthen its production profile. It has completed the evaluation of a large-scale expansion at El Abra in Chile to define a large sulfide resource that could potentially support a major mill project similar to the large-scale concentrator at Cerro Verde, with an estimated resource of approximately 20 billion recoverable pounds of copper.
In Arizona, FCX is progressing with pre-feasibility studies at its Safford/Lone Star operations, with completion targeted for 2026, to assess a sizable sulfide expansion opportunity. It has expansion opportunities at Bagdad in Arizona that can more than double the concentrator capacity of the operation. Technical and economic studies have revealed the potential to build concentrating facilities to boost copper production by 200-250 million pounds annually.
PT Freeport Indonesia (PT-FI) is developing the Kucing Liar ore body within the Grasberg district with a targeted ramp-up to commence in 2030. FCX completed studies in 2025 that showed an opportunity to increase Kucing Liar’s design capacity to 130,000 metric tons of ore per day and reserves by roughly 20% at low costs.
FCX has a strong liquidity profile and generates substantial cash flows, providing ample flexibility to fund expansion projects, reduce debt and enhance shareholder returns. It generated solid operating cash flows of $5.6 billion in 2025. Cash flows provided by operations surged 36% year over year to around $1.5 billion in the first quarter of 2026. Freeport ended the first quarter with strong liquidity, including $3.7 billion in cash and cash equivalents, $3 billion in availability under the FCX revolving credit facility, and $1.5 billion in availability under the PT-FI credit facility.
At the end of the first quarter, Freeport had a net debt of $2.4 billion, excluding PTFI’s new downstream processing facilities. Its net debt is below its targeted range of $3-$4 billion. Freeport has a policy of distributing 50% of the available cash to its shareholders and the balance to either reduce debt or invest in growth projects. FCX has no significant debt maturities until 2027.
FCX offers a dividend yield of roughly 0.5% at the current stock price. Its payout ratio is 14% (a ratio below 60% is a good indicator that the dividend will be sustainable). Backed by strong financial health, the company's dividend is perceived to be safe and reliable.
Despite these positives, Freeport faces headwinds from higher costs. Its outlook for the second quarter of 2026 suggests higher costs on a sequential basis. It expects unit net cash costs to rise to $2.24 per pound, while projecting a full-year average of roughly $1.95 (compared with $1.65 in 2025). The projected second-quarter unit cost reflects a roughly 98% year over year and 17% increase from the prior quarter. The uptick in costs reflects higher costs of energy and other consumables due to the Middle East conflict and persistent pressure on volumes. Higher costs are expected to weigh on the company's margins.
Freeport’s copper sales volumes tumbled approximately 25% year over year in the first quarter to 657 million pounds, and fell from 709 million pounds in the prior quarter. The downside primarily resulted from lower operating rates due to the temporary suspension of operations since the mud rush incident at the Grasberg Block Cave mine in Indonesia in September 2025.
While the company’s outlook for copper sales volumes for the second quarter of 2026 of 690 million pounds indicates a sequential improvement, it still suggests a 32% year-over-year decline. For full-year 2026, consolidated sales volume projections were revised lower to around 3.1 billion pounds of copper from the prior view of 3.4 billion pounds due to an expected delay in achieving full ramp-up of the Grasberg Block Cave mine. Lower sales volumes are expected to weigh on its top line.
The Case for Southern Copper
Southern Copper has a strong pipeline of world-class copper greenfield projects and other promising opportunities. It operates high-quality assets in investment-grade countries such as Mexico and Peru. Backed by its constant commitment to increasing low-cost production and growth investments, the company is well poised to continue delivering enhanced performance.
SCCO holds the largest copper reserves among listed peers. Its low-cost, integrated operations and deep pipeline of world-class greenfield projects further strengthen its competitive positioning. The company is well-positioned to capitalize on the expected surge in copper demand in the year to come, backed by the energy transition trend.
The company continues to build its presence in Peru as the country is the second-largest producer of copper. Peru holds about 9% of the world’s copper reserves. Despite the near-term production headwinds, SCCO expects to produce 915,000 tons of copper in 2026. Southern Copper expected to take this up to roughly 1.6 million tons by the middle of the next decade, implying a compound annual growth rate (CAGR) of approximately 5.3% from 2025 levels. To support this growth plan, the company intends to invest more than $20.5 billion over this decade, with the bulk of the capital allocated to projects in Peru.
The company’s key growth catalysts include the Tía María, Los Chancas and Michiquillay projects in Peru, along with El Pilar and El Arco in Mexico, all of which underpin SCCO’s long-term expansion pipeline.
The Tia Maria project, located in Arequipa, Peru, with an annual capacity of 120,000 tons of SX- EW copper cathodes, is expected to start in 2027. Peru’s Los Chancas project is slated to add 130,000 tons of copper starting in 2031. This will be followed by Michiquillay in 2032, adding an expected 225,000 tons of copper. It is projected to become one of Peru's largest copper mines with an expected mine life of more than 25 years.
In Mexico, the El Pilar project will contribute around 36,000 tons of copper cathodes annually. This project will use highly cost-efficient and environmentally friendly SX-EW technology. El Arco in Baja California is a world-class copper deposit. The project includes an open-pit mine with a combined 120,000 tons per day concentrator and 28,000 tons per year SX-EW operations.
SCCO generated net cash from operating activities of $4.75 billion in 2025, up roughly 7.5% from $4.42 billion in 2024, attributable to higher net income. Net cash from operating activities was around $1.69 billion in the first quarter of 2026, up 135% from $721.4 million in the prior-year quarter, driven by strong cash generation in its operations. SCCO offers a dividend yield of 2.4% at the current stock price. Its payout ratio is 66%, with a five-year annualized dividend growth rate of roughly -2.3%.
However, SCCO faces headwinds from near-term production declines. For 2025, copper production decreased 1.8% to 956,270 tons, which came in 1% lower than the company’s expected 965,000 tons. Lower output at Buenavista and the Peruvian mines, partially offset by a rise in production at IMMSA and La Caridad mines, led to lower output. Its first-quarter output also fell 4% year over year, impacted by lower production at its Peruvian operations (down 10%) due to lower ore grades. While grades are expected to improve later this year, the company's copper production guidance for 2026 implies a decrease of 4.3% from 2025. Lower production is expected to weigh on its performance.
Price Performance and Valuation of FCX & SCCO
FCX stock has gained 61.4% over a year, while SCCO stock has rallied 92.5% compared with the Zacks Mining - Non Ferrous industry’s rise of 59.9%.
Image Source: Zacks Investment Research
FCX is currently trading at a forward 12-month earnings multiple of 20.98, modestly higher than its five-year median. This represents a roughly 1.1% premium when stacked up with the industry average of 20.75X.
Image Source: Zacks Investment Research
SCCO is currently trading at a forward 12-month earnings multiple of 25.54, higher than its five-year median and above the industry.
Image Source: Zacks Investment Research
How Does Zacks Consensus Estimate Compare for FCX & SCCO?
The Zacks Consensus Estimate for FCX’s 2026 sales and EPS implies a 5.1% and 44.6% increase year over year, respectively. The EPS estimates for 2026 have been trending higher over the past 60 days.
Image Source: Zacks Investment Research
The consensus estimate for SCCO’s 2026 sales and EPS implies year-over-year growth of 23.2% and 33%, respectively. The EPS estimates for 2026 have been going up over the past 60 days.
Both Freeport and Southern Copper are making progress with their growth projects amid a volatile yet favorable copper pricing environment. FCX is poised to gain from progress in its expansion activities that will boost production capacity. However, a weaker sales volume outlook and higher expected unit costs weigh on its prospects. On the other hand, SCCO’s case is backed by its constant commitment to increasing low-cost production and growth investments amid challenges from weaker expected near-term production. FCX’s more attractive valuation and higher earnings growth projections suggest that it may offer better investment prospects in the current market environment.
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FCX vs. SCCO: Which Copper Mining Giant is a Better Pick Now?
Key Takeaways
Freeport-McMoRan Inc. (FCX - Free Report) and Southern Copper Corporation (SCCO - Free Report) are two heavyweights in the copper mining industry. Both operate on a global scale, extracting and processing copper and other metals. Also, both are navigating fluctuating copper prices and global economic uncertainties.
Copper prices started 2026 on a strong note, underpinned by robust demand from China and the United States. Structural tailwinds, including electric vehicles (EVs), renewable energy projects, data center growth and grid modernization, continue to boost copper consumption. Worries about tightening supply amid rising EV and infrastructure demand also supported the red metal. These factors led to prices surging to roughly $6.4 per pound in late January. Prices of the red metal were mostly volatile during February, largely trading near $6 per pound.
Copper prices came under pressure in March amid concerns about the impact of surging oil prices on the global economy due to the war in the Middle East, dragging down prices to a three-month low of around $5.3 per pound in late March. Prices rebounded in April on hopes of a de-escalation in the Iran war. Prices shot up to a record high of around $6.6 per pound last week amid robust demand in China and supply worries linked to the Middle East conflict. Prices have pulled back from that level amid war-related uncertainties and are currently hovering near $6.3 per pound.
Let’s dive deep and closely compare the fundamentals of these two copper mining companies to determine which one is a better investment now.
The Case for Freeport
Freeport continues to leverage its portfolio of high-quality copper assets, emphasizing disciplined execution and organic growth initiatives to strengthen its production profile. It has completed the evaluation of a large-scale expansion at El Abra in Chile to define a large sulfide resource that could potentially support a major mill project similar to the large-scale concentrator at Cerro Verde, with an estimated resource of approximately 20 billion recoverable pounds of copper.
In Arizona, FCX is progressing with pre-feasibility studies at its Safford/Lone Star operations, with completion targeted for 2026, to assess a sizable sulfide expansion opportunity. It has expansion opportunities at Bagdad in Arizona that can more than double the concentrator capacity of the operation. Technical and economic studies have revealed the potential to build concentrating facilities to boost copper production by 200-250 million pounds annually.
PT Freeport Indonesia (PT-FI) is developing the Kucing Liar ore body within the Grasberg district with a targeted ramp-up to commence in 2030. FCX completed studies in 2025 that showed an opportunity to increase Kucing Liar’s design capacity to 130,000 metric tons of ore per day and reserves by roughly 20% at low costs.
FCX has a strong liquidity profile and generates substantial cash flows, providing ample flexibility to fund expansion projects, reduce debt and enhance shareholder returns. It generated solid operating cash flows of $5.6 billion in 2025. Cash flows provided by operations surged 36% year over year to around $1.5 billion in the first quarter of 2026. Freeport ended the first quarter with strong liquidity, including $3.7 billion in cash and cash equivalents, $3 billion in availability under the FCX revolving credit facility, and $1.5 billion in availability under the PT-FI credit facility.
At the end of the first quarter, Freeport had a net debt of $2.4 billion, excluding PTFI’s new downstream processing facilities. Its net debt is below its targeted range of $3-$4 billion. Freeport has a policy of distributing 50% of the available cash to its shareholders and the balance to either reduce debt or invest in growth projects. FCX has no significant debt maturities until 2027.
FCX offers a dividend yield of roughly 0.5% at the current stock price. Its payout ratio is 14% (a ratio below 60% is a good indicator that the dividend will be sustainable). Backed by strong financial health, the company's dividend is perceived to be safe and reliable.
Despite these positives, Freeport faces headwinds from higher costs. Its outlook for the second quarter of 2026 suggests higher costs on a sequential basis. It expects unit net cash costs to rise to $2.24 per pound, while projecting a full-year average of roughly $1.95 (compared with $1.65 in 2025). The projected second-quarter unit cost reflects a roughly 98% year over year and 17% increase from the prior quarter. The uptick in costs reflects higher costs of energy and other consumables due to the Middle East conflict and persistent pressure on volumes. Higher costs are expected to weigh on the company's margins.
Freeport’s copper sales volumes tumbled approximately 25% year over year in the first quarter to 657 million pounds, and fell from 709 million pounds in the prior quarter. The downside primarily resulted from lower operating rates due to the temporary suspension of operations since the mud rush incident at the Grasberg Block Cave mine in Indonesia in September 2025.
While the company’s outlook for copper sales volumes for the second quarter of 2026 of 690 million pounds indicates a sequential improvement, it still suggests a 32% year-over-year decline. For full-year 2026, consolidated sales volume projections were revised lower to around 3.1 billion pounds of copper from the prior view of 3.4 billion pounds due to an expected delay in achieving full ramp-up of the Grasberg Block Cave mine. Lower sales volumes are expected to weigh on its top line.
The Case for Southern Copper
Southern Copper has a strong pipeline of world-class copper greenfield projects and other promising opportunities. It operates high-quality assets in investment-grade countries such as Mexico and Peru. Backed by its constant commitment to increasing low-cost production and growth investments, the company is well poised to continue delivering enhanced performance.
SCCO holds the largest copper reserves among listed peers. Its low-cost, integrated operations and deep pipeline of world-class greenfield projects further strengthen its competitive positioning. The company is well-positioned to capitalize on the expected surge in copper demand in the year to come, backed by the energy transition trend.
The company continues to build its presence in Peru as the country is the second-largest producer of copper. Peru holds about 9% of the world’s copper reserves. Despite the near-term production headwinds, SCCO expects to produce 915,000 tons of copper in 2026. Southern Copper expected to take this up to roughly 1.6 million tons by the middle of the next decade, implying a compound annual growth rate (CAGR) of approximately 5.3% from 2025 levels. To support this growth plan, the company intends to invest more than $20.5 billion over this decade, with the bulk of the capital allocated to projects in Peru.
The company’s key growth catalysts include the Tía María, Los Chancas and Michiquillay projects in Peru, along with El Pilar and El Arco in Mexico, all of which underpin SCCO’s long-term expansion pipeline.
The Tia Maria project, located in Arequipa, Peru, with an annual capacity of 120,000 tons of SX- EW copper cathodes, is expected to start in 2027. Peru’s Los Chancas project is slated to add 130,000 tons of copper starting in 2031. This will be followed by Michiquillay in 2032, adding an expected 225,000 tons of copper. It is projected to become one of Peru's largest copper mines with an expected mine life of more than 25 years.
In Mexico, the El Pilar project will contribute around 36,000 tons of copper cathodes annually. This project will use highly cost-efficient and environmentally friendly SX-EW technology. El Arco in Baja California is a world-class copper deposit. The project includes an open-pit mine with a combined 120,000 tons per day concentrator and 28,000 tons per year SX-EW operations.
SCCO generated net cash from operating activities of $4.75 billion in 2025, up roughly 7.5% from $4.42 billion in 2024, attributable to higher net income. Net cash from operating activities was around $1.69 billion in the first quarter of 2026, up 135% from $721.4 million in the prior-year quarter, driven by strong cash generation in its operations. SCCO offers a dividend yield of 2.4% at the current stock price. Its payout ratio is 66%, with a five-year annualized dividend growth rate of roughly -2.3%.
However, SCCO faces headwinds from near-term production declines. For 2025, copper production decreased 1.8% to 956,270 tons, which came in 1% lower than the company’s expected 965,000 tons. Lower output at Buenavista and the Peruvian mines, partially offset by a rise in production at IMMSA and La Caridad mines, led to lower output. Its first-quarter output also fell 4% year over year, impacted by lower production at its Peruvian operations (down 10%) due to lower ore grades. While grades are expected to improve later this year, the company's copper production guidance for 2026 implies a decrease of 4.3% from 2025. Lower production is expected to weigh on its performance.
Price Performance and Valuation of FCX & SCCO
FCX stock has gained 61.4% over a year, while SCCO stock has rallied 92.5% compared with the Zacks Mining - Non Ferrous industry’s rise of 59.9%.
FCX is currently trading at a forward 12-month earnings multiple of 20.98, modestly higher than its five-year median. This represents a roughly 1.1% premium when stacked up with the industry average of 20.75X.
SCCO is currently trading at a forward 12-month earnings multiple of 25.54, higher than its five-year median and above the industry.
How Does Zacks Consensus Estimate Compare for FCX & SCCO?
The Zacks Consensus Estimate for FCX’s 2026 sales and EPS implies a 5.1% and 44.6% increase year over year, respectively. The EPS estimates for 2026 have been trending higher over the past 60 days.
The consensus estimate for SCCO’s 2026 sales and EPS implies year-over-year growth of 23.2% and 33%, respectively. The EPS estimates for 2026 have been going up over the past 60 days.
FCX or SCCO: Which Stock Should You Bet on?
Both FCX and SCCO currently have a Zacks Rank #3 (Hold), so picking one stock is not easy. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Both Freeport and Southern Copper are making progress with their growth projects amid a volatile yet favorable copper pricing environment. FCX is poised to gain from progress in its expansion activities that will boost production capacity. However, a weaker sales volume outlook and higher expected unit costs weigh on its prospects. On the other hand, SCCO’s case is backed by its constant commitment to increasing low-cost production and growth investments amid challenges from weaker expected near-term production. FCX’s more attractive valuation and higher earnings growth projections suggest that it may offer better investment prospects in the current market environment.