Freeport-McMoRan digs copper, gold, and molybdenum out of the ground and sells them to the world. Its three biggest mines, the Grasberg minerals district in Indonesia, the Morenci mine in Arizona, and the Cerro Verde mine in Peru, together produced 70% of the company's copper in 2025. Revenue comes almost entirely from selling what those mines produce: copper concentrate, copper cathode, copper rod, gold, and molybdenum. When copper prices rise, the company makes more money. When they fall, it makes less. There is no subscription fee, no recurring software contract, and no way to lock in a fixed price. The diagram below traces where the money goes.
Five years of financial data tell a clear story about direction. Revenue held almost perfectly flat from 2021 through 2023, hovering near $22.8 billion each year, then jumped to $25.5 billion in 2024 and $25.9 billion in 2025. That revenue growth looks healthy on the surface. But gross margin moved in the opposite direction the entire time, falling from 38.6% in 2021 to 28.2% in 2025. In plain terms: the company is selling more, but keeping a smaller share of each dollar.
Free cash flow tells a similar story. In 2021 the company generated $5.6 billion of free cash flow. By 2023 that had collapsed to $0.5 billion. It recovered to $2.4 billion in 2024, then fell again to $1.1 billion in 2025. Meanwhile, net debt has climbed steadily, from $1.4 billion in 2021 to $5.6 billion in 2025. The company is spending heavily on capital projects, including building a new copper smelter and precious metals refinery in Indonesia, and that spending is consuming most of the cash the mines generate.
The biggest single event shaping the current financial picture happened in September 2025. A mud rush accident at the Grasberg Block Cave underground mine in Indonesia killed seven workers and forced the mine to shut down. Copper and gold production fell sharply. The company recorded $625 million in idle facility costs and direct recovery expenses related to the incident. A phased restart of the Grasberg Block Cave is expected to begin in the second quarter of 2026, with the bulk of copper and gold sales from Indonesia weighted toward the second half of that year.
Beyond the mud rush, Freeport faces several documented threats that are worth understanding clearly. The first is financial. Total consolidated debt stood at $9.4 billion at the end of 2025, with $1.3 billion coming due in 2027. The company held $3.8 billion in cash at the same date. Its credit ratings from Moody's, Fitch, and Standard and Poor's all sit at the lowest rungs of investment grade. A sustained drop in copper prices could pressure those ratings and raise borrowing costs.
The second major threat is political. Freeport's Indonesian operation, known as PT Freeport Indonesia or PTFI, operates under a mining license that runs through 2041. The company's mine plans assume the Indonesian government will grant an extension beyond that date. If it does not, a large portion of proven reserves disappears from the plan. On top of that, Indonesia now requires PTFI to deposit 100% of its export proceeds into Indonesian banks for 12 months before the money can be withdrawn. The government is considering tightening that rule further. A third risk is legal: the SEC and the Department of Justice are investigating whether PTFI's joint venture smelter may have violated U.S. anti-corruption laws. The outcome of that investigation is uncertain.
The company's own outlook for 2026 assumes an average copper price of $5.00 per pound and an average gold price of $4,000 per ounce. At those prices, it projects roughly $8 billion in operating cash flows and $4.3 billion in capital expenditures, leaving limited room for debt reduction or shareholder returns if either price assumption proves too optimistic. Every $0.10 per pound change in the copper price moves operating cash flow by approximately $330 million in either direction.
That sensitivity is the core tension in the whole model. Freeport is spending heavily to grow, taking on debt to build smelting capacity in Indonesia and develop new underground mines, at exactly the moment when free cash flow has shrunk and a major mine is offline. The recovery depends on the Grasberg Block Cave restarting on schedule, copper prices staying high, and the Indonesian government remaining a cooperative partner.