FCX vs. SCCO: Which Copper Mining Giant Should You Bet on Now?

By Anindya Barman | November 26, 2025, 9:17 AM

Freeport-McMoRan Inc. FCX and Southern Copper Corporation SCCO 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 challenges such as fluctuating copper prices and global economic uncertainties. Given the current uncertainties surrounding trade tensions and their potential impact on copper prices, analyzing the fundamentals of these companies is timely and pertinent.

Copper prices have remained volatile this year due to global economic and trade uncertainties. After racking up solid gains in late March, copper prices slipped to around $4.1 per pound in early April amid demand worries due to tariffs, which threatened to cause a broader slowdown globally. However, prices of the red metal moved up in late April to roughly $4.9 per pound on a weakening U.S. dollar resulting from heightened concerns about the prospect of a downturn in the U.S. economy.

Prices again retreated to around $4.7 per pound in late May on weak global demand and increased supply. In June, prices recovered to close the second quarter above the $5 per pound level. Volatility continued in the third quarter, with prices hitting an all-time high of around $5.96 per pound in July before slipping again to close the month at around $4.4 per pound. Copper prices mostly hovered around $4.5 per pound in August, while climbing around the end of September to close the third quarter near $5 per pound on supply worries. Prices, for the most part, have remained above $5 per pound in the fourth quarter.

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 is well-placed with high-quality copper assets and remains focused on strong execution and advancing its organic growth opportunities. At its Cerro Verde operation in Peru, a large-scale concentrator expansion provided incremental annual production of around 600 million pounds of copper and 15 million pounds of molybdenum. 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.

FCX is also conducting pre-feasibility studies (expected to be completed in 2026) in the Safford/Lone Star operations in Arizona to define a significant sulfide expansion opportunity. It also has expansion opportunities at Bagdad in Arizona to more than double the concentrator capacity of the operation.

Also, PT Freeport Indonesia (PT-FI) substantially completed the construction of the new greenfield smelter in Eastern Java during 2024, with start-up having commenced in the second quarter of 2025. The first production of copper anode was achieved in July 2025. PT-FI is also developing the Kucing Liar ore body within the Grasberg district with a targeted ramp-up to commence before 2030. Gold production also started at the new precious metals refinery in late 2024. Plans are in place to transition PT-FI’s existing energy source from coal to natural gas, which is expected to significantly reduce greenhouse gas emissions at Grasberg.

FCX has a strong liquidity position and generates substantial cash flows, which allow it to finance its growth projects, pay down debt and drive shareholder value. It generated operating cash flows of around $1.7 billion in the third quarter of 2025. Freeport ended the third quarter with strong liquidity, including $4.3 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 third quarter, Freeport had a net debt of $1.7 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 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 0.7% at the current stock price. Its payout ratio is 19% (a ratio below 60% is a good indicator that the dividend will be sustainable), with a five-year annualized dividend growth rate of about 12.9%. 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. FCX saw an increase in its average unit net cash cost per pound of copper in the third quarter of 2025 to $1.40 from $1.13 in the prior quarter, marking a roughly 24% spike. The increase was fueled by a decline in copper sales volumes.

Freeport's outlook for the fourth quarter suggests significantly higher costs on a sequential basis. It expects unit net cash costs to rise to $2.47 per pound, while projecting a full-year average of roughly $1.68. Lower expected sales volumes are likely to impact costs in the quarter. Higher costs are likely to weigh on the company's margins.

Freeport’s copper sales volumes also fell approximately 6% year over year in the third quarter to 977 million pounds. The downside primarily resulted from the temporary suspension of operations since the mud rush incident at the Grasberg Block Cave mine in Indonesia in September 2025, which led to the suspension of operations.

Freeport’s outlook for copper sales volumes in the fourth quarter assumes minimal contribution from its Indonesian operations due to the Grasberg mine incident. FCX expects copper sales volumes of 635 million pounds, indicating a 35% sequential and 36% year-over-year decline. The company has also issued weaker guidance for gold sales volume of 60,000 ounces, suggesting significant sequential and year-over-year decreases. Lower sales volumes are expected to weigh on its top line in the fourth quarter.

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.

The company’s capital investment program for this decade is more than $15 billion. This includes investments in the El Arco project in Mexico and the Tia Maria, Los Chancas and Michiquillay projects in Peru. This forecast also includes several infrastructure investments. The major portion (around $10.3 billion) is earmarked for Peru.

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. Southern Copper’s Michiquillay is expected to become one of Peru's largest copper mines and will produce 225,000 tons of copper per year (along with by-products of molybdenum, gold and silver) for an expected mine life of more than 25 years. Production is expected to start by 2032.

The Los Chancas – Apurimac project is an open-pit mine with a combined operation of a concentrator and SX-EW processes with an annual production capacity of 130,000 tons of copper and 7,500 tons of molybdenum. The project is expected to commence operations in 2030-2031. The Tía María project is expected to produce 120,000 tons of SX- EW copper cathodes on an annual basis and has a budget of around $1.8 billion.

SCCO generated net cash from operating activities of $4.42 billion in 2024, up roughly 24% from $3.57 billion in 2023, attributable to higher net income. Net cash from operating activities was around $1.56 billion in the third quarter of 2025, up 8% from $1.44 billion in the third quarter of 2024, driven by strong cash generation in its operations. SCCO offers a dividend yield of 2.9% at the current stock price. Its payout ratio is 67%, with a five-year annualized dividend growth rate of roughly 0.6%.

FCX & SCCO: Price Performance, Valuation & Other Comparisons

Year to date, FCX stock has gained 7.9%, while SCCO stock has increased 41.7% compared with the Zacks Mining - Non Ferrous industry’s rise of 21.5%.