- Freeport-McMoRan is using technology to boost copper production without opening new mines.
- This will help it add 800 million pounds annually within three to five years, CEO Kathleen Quirk told Bloomberg.
- It shows how mining firms are looking to boost output amid the copper shortage.
A US mining giant has plans to scale up its copper production by as much as 800 million pounds yearly, equivalent to the output of an entire mine — but instead of opening a new site, the firm will achieve that output with new processing technology to allow it to mine copper it couldn't previously get to.
That's according to Freeport-McMoRan CEO Kathleen Quirk, who told Bloomberg that the initiative is necessary as copper supply grows more strained.
"I'm really focused on this issue, because when we look around, we know how hard it is to develop new supply," the newly-appointed executive told the outlet. "You think about 800 million pounds of copper a year — that's the size of a big mine. That's meaningful. Our team is working very aggressively to get that done."
It's part of a broader scramble to boost inventory, as demand for the industrial metal has gained tremendously in recent years. Yet, while green policy and artificial intelligence infrastructure have boosted the need for copper, there isn't enough supply to meet this.
The shortage is made worse by the lackluster mining environment, with new and existing projects often stalled.
The supply-demand imbalance that's created has supercharged prices, with copper peaking over $11,000 a ton in May. Bullish analysts believe this is just a start, and forecast future highs as far up as $15,000 a ton.
"We've been seeing this coming," Quirk told CNBC in a separate interview. "So we've been focused on how are we going to grow our production and we're doing that now."
According to former CEO Richard Adkerson, the firm's bullish bet on copper started 20 years ago, though the original excitement centered on China's economic rise. Given the fresh momentum, markets are entering a "new era of copper demand," he said on CNBC.
To take advantage of that, Freeport has been forced to become more innovative, Quirk told Bloomberg. Currently, the new recovery process already is producing 200 million pounds more of copper a year, and should add another 200 million pounds in the next two years.
800 million pounds will be extracted over the next three to five years, the outlet said.
The focus on technology is a move away from the strategy other mining firms are using to boost production: mergers and acquisitions. Last month, BHP gave up on a $49 billion bid to take over Anglo American, which would mark the largest mining deal in over a decade.