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PHOENIX - Freeport-McMoRan Inc. (NYSE:FCX), a prominent player in the Metals & Mining industry with a market capitalization of $65.13 billion and robust annual revenue of $25.82 billion, confirmed Wednesday that two workers were found dead following a mud rush incident at its Grasberg Block Cave mine in Indonesia, while five team members remain missing. According to InvestingPro analysis, the company maintains good financial health with strong liquidity metrics, though it’s currently trading at a relatively high earnings multiple.
The company reported that the bodies were recovered on September 20, nearly two weeks after approximately 800,000 metric tons of wet material suddenly entered the mine on September 8. The mud flow traveled rapidly through multiple mine levels, including areas where development activities were underway.
Search efforts continue around the clock as teams clear mud and debris to reach areas where the remaining missing workers were located during the incident.
Mining operations in the Grasberg minerals district have been suspended since the incident occurred. The company has launched an investigation with external experts to determine the cause of what it described as an "unprecedented" event in its decades of block cave mining operations.
The incident will significantly impact Freeport’s production. Third-quarter consolidated sales are expected to be approximately 4% lower for copper and 6% lower for gold than previously forecast in July. This setback comes as the company had been showing positive momentum, with revenue growth of 4.64% over the last twelve months and a healthy gross profit margin of 39.17%.
Looking ahead, Freeport anticipates more substantial production impacts. The affected mine represents approximately 70% of PTFI’s previously forecast copper and gold production through 2029. The company expects fourth-quarter 2025 sales of copper and gold to be "insignificant" compared to previous estimates.
Freeport outlined a potential phased restart beginning in early 2026, with production potentially 35% lower than pre-incident estimates next year. The company aims to return to pre-incident production levels by 2027.
The company stated it will seek recovery under its property and business interruption insurance policies, which cover up to $1.0 billion in losses after a $0.5 billion deductible. Freeport has also notified commercial counterparties of a force majeure.
According to the press release statement, the investigation is expected to be completed by year-end 2025. For investors seeking deeper insights into FCX’s financial outlook and risk metrics, InvestingPro offers comprehensive analysis through its Pro Research Report, including detailed risk assessments and forward-looking metrics among the 1,400+ US equities covered on the platform.
In other recent news, Freeport-McMoRan is actively engaged in rescue operations to locate seven missing contractor workers at the Grasberg Block Cave mine in Indonesia following a mud flow incident. The company reported that rescue teams are working continuously to clear blocked access routes and drill into locations near a refuge chamber. Meanwhile, Morgan Stanley upgraded Freeport-McMoRan’s stock to Overweight, despite lowering the price target from $54.00 to $48.00, indicating a belief that the recent price reaction was excessive.
Additionally, President Donald Trump announced significant tariffs on copper imports, impacting Freeport-McMoRan as the tariffs include a 50% levy on various copper products. BMO Capital has lowered its price target for Freeport-McMoRan to $54.00, citing a reduction in the company’s 2025 gold production target despite a well-executed quarter. Furthermore, Raymond James has reiterated its Outperform rating with a price target of $53.00, emphasizing the strength of Freeport-McMoRan’s copper and gold assets. These developments reflect the dynamic environment surrounding Freeport-McMoRan and its operations.
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