Prediction: Freeport McMoRan Will Soar Over the Next 10 Years. Here's Why.

Copper miner Freeport McMoRan (NYSE: FCX) has significant potential to soar over the coming decade, in line with a rise in the price of copper and the company's ability to expand production. Here's why.

Demand and supply for copper support higher prices

The case for copper often relies on assumptions about future demand. The metal is a vital part of the global economy due to its uses across a wide range of sectors, including electricity transmission and distribution, construction, and transportation . It's also a vital part of the energy transition and the megatrend of the electrification of everything.

Replacing internal combustion engines (ICEs) with electric vehicles (EVs) creates increased copper demand since the latter use significantly more copper. And EV charging networks need the metal to function and connect to the grid.

Then there's the multitude of connected technologies, such as industrial automation, smart buildings/infrastructure, and data centers that drive the move toward electrification.

But there's the real possibility that a lack of investment and major copper discoveries in recent years will result in a supply shortage. For example, according to research by S&P Global , only 14 of the 239 major discoveries since 1990 occurred over the last decade, and just four in the last five years.

Image source: Getty Images.

Why Freeport McMoRan is in a good position

The company is ideally placed to benefit in this environment due to its potential to increase production through expansionary investment in existing projects in relatively stable countries like the U.S. and Indonesia. And its leaching technology can extract copper from existing stockpiles. Management aims to eventually hit an annual run rate of 800 million pounds of copper from leaching -- a significant amount given that it expects total production of 4.1 billion pounds in 2024.

As such, Freeport McMoRan is an ideal play on the potential for a higher price of copper.

Should you invest $1,000 in Freeport-McMoRan right now?

Before you buy stock in Freeport-McMoRan, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Freeport-McMoRan wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $839,122 !*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.

See the 10 stocks »

*Stock Advisor returns as of October 14, 2024

Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .