Freeport-McMoRan approved a $4.5 billion Bagdad copper mine; its cost guide depends on molybdenum
The board approved the $4.5 billion Bagdad copper project on Wednesday, November 4, but the cost line that made the quarter work rests on molybdenum, a by-product in its sixth straight deficit year. The Climax expansion that would defend it is still only being dusted off.
Richard Tang · 2 min read
Freeport-McMoRan's+0.50% — Freeport-McMoRan, up 0.50 percent today board approved the $4.5 billion Bagdad copper and molybdenum expansion on Wednesday, November 4, sending the stock up about 3% pre-market 7. That settles where the capital goes: copper. It does not settle what holds Freeport's cost line together, which is molybdenum, and the expansion of the mine that would defend it remains a decision nobody has made.
The quarter last week read as a copper story with a volume problem. Freeport cut its 2026 copper sales outlook by about 2% and its 2027 estimate by about 2.5%, and the stock fell 5.5% the next day 36. Read the cost line instead: the company held 2026 unit net cash cost guidance at $1.90 a pound while third-quarter costs actually ran $2.07, and management said the guide is "supported by molybdenum by-product credits" 34. Chief Executive Kathleen Quirk called pricing for copper and molybdenum the driver of the quarter's margins 4.
The cushion is a metal in its sixth straight deficit year
BMO Capital Markets, a bank with a metals research desk, forecasts a sixth consecutive annual molybdenum deficit in 2027 1. Prices are up more than 50% this year, and about 60% of world supply arrives as a copper-mining by-product that falls when copper mining struggles; Chile, the number-two producer last year, cut output 8% in the first half 1.
The dependence runs through Freeport itself. Shanghai Metals Market (SMM), a metals research firm, calculates that by-product copper mines supplied about 63% of Freeport's molybdenum in the first nine months of 2026, with primary output at Climax down a million pounds, exactly offset by Cerro Verde 8.
By-product copper mines supplied 63% of Freeport's molybdenum in 2026
By-product copper mines now supply most of Freeport's molybdenum
Data
| Part | Molybdenum production, 9M 2026 | Share |
|---|---|---|
| Climax | 16M lb | 23.9% |
| Henderson | 9M lb | 13.4% |
| US copper ops | 25M lb | 37.3% |
| Cerro Verde | 17M lb | 25.4% |
Bagdad is a copper project that quietly adds 40% of Climax
Bagdad, approved this week as a copper project, adds about 12 million pounds of annual molybdenum against Climax's roughly 30 million pounds of nominal capacity, with first production targeted for mid-2030 79. Quirk said on the earnings call that Freeport is "dusting off our old schedules" at Climax, but the reassessed expansion carries no disclosed volume, capital or timetable, and copper remains the stated capital priority 129.
So watch the Climax decision. When Freeport discloses a volume, a capital figure and a date for Climax, that is the signal the $1.90 cost guide has a structural defense; until then the cushion is a by-product riding on copper mines that just missed their own plan.
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