Stocks

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

September 24, 2026 — 06:27 am EDT

Written by Anindya Barman for Zacks

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.

Copper prices continue to show strength driven by robust demand from China and the United States. Structural tailwinds, including electric vehicles (EVs), renewable energy projects, artificial intelligence data center growth and grid modernization, continue to boost copper consumption. Worries about tightening supply amid rising EV and infrastructure demand aided the red metal. Supply risks stem from operational issues in top producer Chile, along with export bans on copper concentrates from the Democratic Republic of Congo.

Copper surged to an all-time high near $6.9 per pound recently on tariff-related uncertainties and supply tightness. Imports to the United States have surged ahead of a potential tariff announcement by the Trump administration. Copper prices are currently hovering above $6.7 per pound and up more than 40% year over year.

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 continues to leverage its portfolio of high-quality copper assets, emphasizing disciplined execution and organic growth initiatives to strengthen its production profile. FCX 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. The expansion is expected to result in the addition of more than 700 million pounds of copper production annually.

In Arizona, FCX is progressing with pre-feasibility studies at its Safford/Lone Star operations, with completion targeted for 2026, to assess a sizable sulfide expansion opportunity. It has expansion opportunities at Bagdad in Arizona that can more than double the concentrator capacity of the operation. Technical and economic studies have revealed the potential to build concentrating facilities to boost copper production by 200-250 million pounds annually.

PT Freeport Indonesia (PT-FI) is developing the Kucing Liar ore body within the Grasberg district with a targeted ramp-up expected to commence in 2030. Studies completed by FCX in 2025 show an opportunity to increase Kucing Liar’s design capacity to 130,000 metric tons of ore per day and reserves by roughly 20% at low costs.

FCX has a strong liquidity profile and generates substantial cash flows, providing ample flexibility to fund expansion projects, reduce debt and enhance shareholder returns. It generated solid operating cash flows of $5.6 billion in 2025. Cash flows provided by operations were around $2 billion in the second quarter of 2026. Freeport ended the second quarter with strong liquidity, including $4.1 billion in cash and cash equivalents, $3 billion in availability under the Freeport revolving credit facility, and $1.5 billion in availability under the PT-FI credit facility.

At the end of the second quarter, Freeport had a net debt of $2.1 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 its 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 0.4% at the current stock price. Its payout ratio is 13% (a ratio below 60% is a good indicator that the dividend is sustainable). 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. Its second-quarter unit net cash costs jumped 74% year over year to $1.97 per pound due to lower copper volumes. Freeport expects unit net cash costs of $2 per pound for the third quarter, while projecting a full-year average of roughly $1.9 (compared with $1.65 in 2025). The projected third-quarter unit cost reflects a roughly 43% year-over-year increase. The uptick in costs reflects higher costs of energy and other consumables due to the Middle East conflict and persistent pressure on volumes. Higher costs are expected to weigh on the company's margins.

Freeport’s copper sales volumes tumbled approximately 30% year over year in the second quarter to 710 million pounds. The downside primarily resulted from lower operating rates during the phased ramp-up of the Grasberg Block Cave mine in Indonesia, following the mud rush incident in September 2025.

While the company’s third-quarter outlook for copper sales volumes of 750 million pounds indicates a sequential improvement, it suggests a 23% year-over-year decline. The company, in April 2026, lowered its consolidated sales volume projections for full-year 2026 to around 3.1 billion pounds of copper from the prior view of 3.4 billion pounds due to an expected delay in achieving full ramp-up of the Grasberg Block Cave mine. Lower sales volumes are expected to weigh on its top line.

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.

SCCO holds the largest copper reserves among listed peers. Its low-cost, integrated operations and deep pipeline of world-class greenfield projects further strengthen its competitive positioning. The company is well-positioned to capitalize on the expected surge in copper demand in the year to come, backed by the energy transition trend.

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. Despite the year-to-date fall in production, the company has slightly hiked its 2026 copper production outlook to 917,000 tons. Southern Copper expects to take this up to roughly 1.6 million tons by 2033 or 2034. To support this growth plan, the company intends to invest $20.5 billion over the next decade, with the bulk of the capital allocated to projects in Peru.

The company’s key growth catalysts include the Tía María, Los Chancas and Michiquillay projects in Peru, along with El Pilar in Mexico, all of which underpin SCCO’s long-term expansion pipeline. Given its constant commitment to increasing low-cost production and growth investments, SCCO is well-positioned to continue delivering enhanced performance.

SCCO generated net cash from operating activities of $4.75 billion in 2025, up roughly 7.5% from $4.42 billion in 2024, attributable to higher net income. It delivered a solid 116.9% year-over-year surge in operating cash flow in the first six months of 2026 to $3.68 billion. Southern Copper’s strong cash generation is driven by higher sales and a reduction in operating assets and liabilities requirements. The company also benefited from its cash cost decrease, which was driven by a 68.2% year-over-year rise in by-product revenue credits.

In July 2026, the board authorized a $1.10-per-share cash dividend plus a stock dividend of 0.012 shares per common share, reflecting continued capital returns alongside higher investment spending. SCCO offers a dividend yield of 2.4% at the current stock price. Its payout ratio is 66%, with a five-year annualized dividend growth rate of roughly -2.3%.

However, SCCO faces headwinds from near-term production declines. Copper production fell 3.5% year over year in the second quarter of 2026 to 230,662 tons, while first-half 2026 output declined 3.8% to 461,206 tons. The weakness was concentrated in Peru, where second-quarter production fell 12% because of lower ore grades and recoveries at Toquepala and Cuajone. Management raised its 2026 copper production outlook, but it remains below the 956,270 tons produced in 2025. Lower production is expected to weigh on its performance.

Price Performance and Valuation of FCX & SCCO

FCX stock has surged 105.4% over a year, while SCCO stock has rallied 71.2% compared with the Zacks Mining - Non Ferrous industry’s rise of 66.1%.