This Mining Stock Is Quietly One of the Best Trades in Energy
Investors may be underestimating copper's importance to the energy transition and the demand for power coming from AI investment.
Freeport-McMoRan (FCX), a mining stock, is quietly emerging as one of the best trades in the energy sector. While it's not a pure-play energy company, it's a significant player in the energy transition and electrification trends. The company is the largest copper producer in the U.S., supplying about 70% of the refined copper domestically.
This positions it as the key supplier of a metal vital to electricity applications. If the Trump administration extends tariffs on copper and refined copper products, FCX stands to benefit greatly.
The primary driver of copper demand is electrical applications, with over 65% of global copper consumption used for electricity. This demand is expected to rise due to the higher copper content in electric vehicles (EVs) compared to internal combustion engine vehicles, which require more copper for extensive wiring. Additionally, copper is essential for solar panels and to connect renewable energy to the grid. Therefore, Freeport-McMoRan's position in this sector makes it a promising investment in the energy transition.
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