FCX vs SCCO: Why the Largest Copper Miner Earns the Lowest ROIC
We computed ROIC from XBRL financial data for every NYSE-listed copper miner with processed filings. Freeport-McMoRan (FCX) — the world's largest publicly traded copper producer — earns the lowest return on invested capital at 9.2%, while Southern Copper (SCCO) generates 24.2% on half the revenue. The 10-K filings reveal why: FCX's Indonesia operations depend on $2.82/lb gold credits to achieve negative cash costs, while SCCO's $0.89/lb cost structure is built on vertical integration and 60-year mine lives.
FCX vs SCCO: Why the Largest Copper Miner Earns the Lowest ROIC
Published: February 8, 2026 Data Currency: SEC XBRL filings (10-K, 10-Q, 20-F, 40-F) processed through February 2026. ROIC computed from MetricDuck's standardized NOPAT/invested capital methodology. TTM figures as of Q3 2025 (September 30, 2025) for domestic filers; FY 2024 for foreign private issuers.
Key Findings
We computed return on invested capital from XBRL financial data for every NYSE-listed copper miner with processed SEC filings:
- FCX earns the lowest ROIC (9.2% TTM) among all five producing copper miners — despite generating 2x the revenue of its closest peer
- SCCO leads at 24.2% TTM, with gross margins of 59.1% vs FCX's 29.6% — a 2x gap driven by cost structure, not commodity prices
- FCX's Indonesia operations report negative cash costs ($-0.28/lb) — but only because of $2.82/lb gold by-product credits. Strip the gold, and Indonesia costs $2.54/lb
- SCCO holds 16% more copper reserves (112.7B lbs vs 97.0B lbs) despite being half the size by revenue
- Both companies face a capital inflection: FCX is mid-cycle on $10B+ deployment; SCCO's 2025 CapEx jumps 55% as Tía María construction begins
The ROIC Ranking
We computed ROIC — net operating profit after tax divided by invested capital — for every NYSE-listed copper producer with processed XBRL filings. The ranking inverts what most investors expect:
| Company | Ticker | ROIC | Revenue | Period | Data Source |
|---|---|---|---|---|---|
| Southern Copper | SCCO | 24.2% | $12.5B | TTM Q3'25 | filing_metrics |
| Taseko Mines | TGB | 22.1% | $0.6B | FY 2024 | filing_metrics |
| Hudbay Minerals | HBM | 16.5% | $1.8B | FY 2024 | filing_metrics |
| Ero Copper | ERO | 15.6% | $0.5B | FY 2024 | filing_metrics |
| Freeport-McMoRan | FCX | 9.2% | $25.9B | TTM Q3'25 | filing_metrics |
The world's largest publicly traded copper producer — $25.9 billion in revenue, operations across three continents, 97 billion pounds of copper reserves — generates the lowest return on its invested capital. A company half its size, operating in two countries with no gold production, earns 2.6x the ROIC.
This is not a one-quarter anomaly. FCX's 8-quarter median ROIC is 10.4%. SCCO's 8-quarter median is 24.0%. The gap persists across economic cycles.
Important timing note: FCX and SCCO figures use trailing twelve-month data through Q3 2025 (September 30, 2025). TGB, HBM, and ERO are foreign private issuers filing annual reports (40-F), so their ROIC reflects FY 2024. Copper prices averaged $4.15/lb in 2024 and traded higher in 2025, meaning the FPI annual figures are computed against a slightly different price environment. All ROIC calculations use the same NOPAT/invested capital methodology from MetricDuck's standardized XBRL pipeline.
Why the Gap: Margin Anatomy
The ROIC gap starts with margins. Here's the head-to-head comparison using the most recent trailing twelve-month data:
| Metric | FCX (TTM Q3'25) | SCCO (TTM Q3'25) | SCCO Advantage |
|---|---|---|---|
| Gross Margin | 29.6% | 59.1% | 2.0x |
| Operating Margin | 26.7% | 50.8% | 1.9x |
| Net Margin | 8.0% | 31.4% | 3.9x |
| FCF Margin | 6.3% | 28.4% | 4.5x |
SCCO doesn't just edge FCX on one metric. It earns double the gross margin, nearly double the operating margin, and 4.5x the free cash flow margin.
Methodology note: FCX margins come from our automated pipeline. SCCO margins are computed manually from XBRL revenue data due to a pipeline mapping issue with SCCO's revenue element — a practical example of the XBRL element fragmentation we've documented. SCCO's ROIC is unaffected (it uses NOPAT and invested capital, not revenue). See Methodology and Dataset below for full details.
SCCO Margins Are Expanding. FCX Margins Are Compressing.
The directional divergence is as significant as the absolute gap:
SCCO TTM Margin Trajectory (manual computation from XBRL):
| TTM Period | Gross | Operating | Net | FCF |
|---|---|---|---|---|
| Q1 2023 | 53.7% | 44.1% | 25.4% | 20.1% |
| Q3 2023 | 52.3% | 42.1% | 25.6% | 27.1% |
| Q1 2024 | 54.2% | 44.2% | 26.6% | 26.7% |
| Q3 2024 | 56.9% | 47.7% | 28.7% | 27.4% |
| Q1 2025 | 58.0% | 49.1% | 30.0% | 22.7% |
| Q3 2025 | 59.1% | 50.8% | 31.4% | 28.4% |
SCCO's gross margin expanded +5.4 percentage points over 10 quarters — approximately +0.54pp per quarter. This is steady, structural margin improvement, driven by production growth (+6.9% YoY in 2024), declining energy costs in Mexico, and rising by-product credits from silver, zinc, and molybdenum.
FCX's story runs the opposite direction. From filing_metrics automated trend analysis:
| FCX Metric | 8Q Median | 8Q Trend (per quarter) | Direction |
|---|---|---|---|
| ROIC | 10.4% | +0.66pp | Slowly improving |
| Gross Margin | 30.9% | -1.74pp | Declining |
| Operating Margin | 28.4% | -0.53pp | Flat/declining |
| FCF Margin | 9.3% | +2.20pp | Improving |
FCX gross margins are declining at -1.74 percentage points per quarter. The gap between these two companies is widening, not narrowing.
The Gold Subsidy: FCX's Hidden Cost Structure
FCX's 10-K (FY 2024) reveals a cost structure that looks radically different by region:
| Region | Copper Production | Unit Net Cash Cost/lb | Gold By-Product Credit/lb | Operating Income |
|---|---|---|---|---|
| Indonesia (Grasberg) | 1,800M lbs (43%) | ($0.28) | $2.82 | $5,622M (82%) |
| South America (Cerro Verde) | 1,168M lbs (28%) | $2.46 | $0.34 | $1,471M (21%) |
| North America (Morenci+) | 1,246M lbs (29%) | $3.11 | $0.48 | $757M (11%) |
| Consolidated | 4,214M lbs | $1.56 | $6,864M |
Indonesia reports negative unit cash costs — it costs FCX less than nothing to produce a pound of copper at Grasberg. But this is entirely because of gold. The $2.82/lb gold by-product credit more than offsets all production costs, treatment charges ($0.35/lb), export duties ($0.28/lb), and royalties ($0.27/lb).
Without gold credits, Indonesia's unit cost would be $2.54/lb — higher than SCCO's fully-loaded net cash cost of $0.89/lb.
Gold accounted for $4.446 billion — 16.8% of FCX's gross product revenue in 2024. Indonesia produced 1.88 million ounces of gold, representing 99% of FCX's total gold production. FCX is a copper-gold company, and its cost advantage is gold-dependent.
Meanwhile, FCX's North America operations — Morenci, Safford, Bagdad, and others — cost $3.11/lb to produce, the highest among all its regions. These mines contributed 29% of copper production but only 11% of operating income.
SCCO's cost structure by comparison (FY 2024 10-K):
| Metric | SCCO | FCX |
|---|---|---|
| Operating cash cost (before by-products) | $2.13/lb | $2.49/lb |
| By-product credits | ($1.25/lb) | Varies by region |
| Net cash operating cost | $0.89/lb | $1.56/lb |
| By-product as % of gross cost | 58.5% | Varies (gold-dependent) |
SCCO's by-product credits come from molybdenum, zinc, silver, and gold — spread across four metals rather than concentrated in one. And SCCO's gross operating cost before credits ($2.13/lb) is already lower than FCX's ($2.49/lb). The cost advantage is structural, not a by-product artifact. (SCCO 10-K, FY 2024)
The Capital Intensity Divergence
The second dimension of capital efficiency — capital intensity — tells an equally sharp story.
| Metric | FCX (FY 2024) | SCCO (FY 2024) | Ratio |
|---|---|---|---|
| Revenue | $25.5B | $11.4B | FCX 2.2x |
| Capital Expenditures | $4.8B | $1.0B | FCX 4.7x |
| CapEx as % of Revenue | 18.9% | 9.0% | FCX 2.1x more capital intensive |
| Free Cash Flow | $1.6B | $3.5B | SCCO 2.1x |
| FCF/CapEx Ratio | 0.34x | 3.4x | SCCO 10x |
FCX spends 4.7x more capital but generates 2.1x less free cash flow. SCCO generates 3.4x its annual capital expenditures in free cash flow, while FCX converts just 34 cents of every CapEx dollar into FCF. This reflects the maturity of SCCO's existing asset base — decades-old low-cost mines producing cash against fully depreciated capital — versus FCX's active deployment phase where billions are going into projects that won't produce until 2027-2029.
Where FCX's $4.8 billion goes (FY 2024 10-K):
| Segment | CapEx | % of Total |
|---|---|---|
| Indonesia operations | $2,908M | 60% |
| North America | $1,033M | 21% |
| South America | $375M | 8% |
| Atlantic Copper / Rod & Refining | $177M | 4% |
| Molybdenum / Corporate | $315M | 7% |
60% of FCX's capital goes to Indonesia — for Grasberg underground development, the Kucing Liar mine ($4 billion total, 2029-2041), a new smelter (fire damage repairs underway, full ramp-up by year-end 2025), and a precious metals refinery that commenced gold production in December 2024.
Where SCCO's $1.0 billion goes (FY 2024 10-K):
| Segment | CapEx | % of Total |
|---|---|---|
| Mexican Open-pit | $756M | 74% |
| Peruvian Operations | $271M | 26% |
SCCO's capital is split between maintenance/replacement ($515M) and growth projects ($512M), with the Buenavista Zinc concentrator ($48M final spend), new tailings disposal ($135M), and early Tía María work ($15M) as the largest project items.
The comparison isn't entirely fair. FCX is building generational assets — Kucing Liar alone is expected to produce over 7 billion pounds of copper and 6 million ounces of gold between 2029 and 2041. These are investments that depress current ROIC but could transform future returns. But that's precisely the analytical question: at what point does "investing for the future" become "destroying current returns"?
The Reserve Paradox
This ratio — copper reserves per dollar of invested capital — doesn't appear in standard financial databases:
| Metric | SCCO (FY 2024) | FCX (FY 2024) |
|---|---|---|
| Copper Mineral Reserves | 112.7B lbs | 97.0B lbs |
| Annual Revenue | $11.4B | $25.5B |
| Annual Copper Production | 2,147M lbs | 4,214M lbs |
| Reserve Life (at current production) | ~52 years | ~23 years |
SCCO holds 16% more copper in the ground than FCX — despite generating half the revenue and producing half the copper annually. SCCO's mine lives are extraordinarily long: Buenavista and La Caridad have approximately 60-year reserves based on current pit designs.
This implies SCCO is earlier in its reserve monetization lifecycle. It has more undeveloped copper optionality per dollar of invested capital. The growth pipeline confirms this — SCCO targets 1.5 million tonnes of copper production by 2032 (up 54% from 974,000 tonnes in 2024), with five major development projects in the queue:
| Project | Annual Capacity | Status |
|---|---|---|
| Tía María (Peru) | 120,000 tonnes | Construction starting 2025, operations 2027 |
| El Pilar (Mexico) | 36,000 tonnes | Development stage |
| Los Chancas (Peru) | 130,000 tonnes | Development stage |
| Michiquillay (Peru) | 225,000 tonnes | Development stage |
| El Arco (Mexico) | Large-scale | Feasibility |
FCX's growth pipeline is concentrated in fewer, larger bets:
| Project | Incremental Production | CapEx | Timeline |
|---|---|---|---|
| Kucing Liar (Indonesia) | 560M lbs Cu + 520K oz Au/yr | $4.0B | 2029-2041 |
| Bagdad expansion (Arizona) | 200-250M lbs Cu/yr | $3.5B | Decision pending |
| El Abra sulfide (Chile) | Cerro Verde-scale | TBD | EIS by YE 2025 |
| Leach innovation | 214M lbs Cu in 2024 | ~$240M/yr | Ongoing |
Does the market already know this? The operational gap documented above is not a secret. SCCO consistently trades at a significant premium to FCX on P/E, EV/EBITDA, and price-to-book. The question for investors is not whether SCCO is more capital-efficient — the data is unambiguous — but whether the magnitude of the valuation premium is justified by the magnitude of the operational advantage. This analysis provides the operating data to evaluate that question; it does not attempt to answer it.
The Capital Inflection Ahead
Both companies face their own version of the capital deployment challenge — and this is where the analysis shifts from backward-looking to forward-looking.
SCCO is entering the same cycle that depresses FCX's current ROIC. SCCO's board approved $1.598 billion in 2025 capital expenditures — a 55% increase from 2024. The bulk goes to Tía María ($1.8 billion total budget), which won't produce copper until 2027. As SCCO deploys capital toward its 1.5 million tonne target, its ROIC will face the same compression pressure that FCX experiences today.
In February 2025, SCCO's subsidiary Minera Mexico issued $1 billion in 7-year notes at 5.625% — the offering was 3.5x oversubscribed ($3.5 billion in orders). The market is funding SCCO's growth at attractive rates, but the capital is being deployed against future production, not current returns.
FCX's bets are starting to mature. The Grasberg Block Cave hit a milling rate of 133,800 mt/day in 2024, up from 103,300 in 2022. The new precious metals refinery commenced gold production in December 2024. The leach innovation program delivered 214 million pounds of incremental copper in 2024, up from 144 million in 2023. If the smelter repair completes by mid-2025 as planned, FCX will process all Grasberg concentrate domestically — eliminating treatment charges and export duty headwinds that totaled $853 million in 2024.
The question for FCX is whether Kucing Liar and Bagdad deliver returns that justify the capital deployed. Kucing Liar's 7 billion pounds of copper plus 6 million ounces of gold over 12 years, at a $4 billion investment, implies a cost basis of roughly $0.57/lb of copper equivalent — potentially excellent ROIC once producing. But that production doesn't begin until 2029.
What This Analysis Cannot Tell You
We present the data honestly, which means flagging what it doesn't show:
-
FCX's gold revenue ($4.4B, 16.8% of gross) makes consolidated margin comparison imprecise. Indonesia's negative cash cost is a gold artifact. We've shown cost with and without gold credits, but a true copper-only margin comparison would require segment-level ROIC decomposition that neither company provides in standardized XBRL format.
-
FCX's low ROIC is not necessarily evidence of poor capital allocation. It may be the cost of world-class optionality. Kucing Liar, Bagdad, and El Abra are potentially transformative assets. The question is timing and execution, not strategic direction.
-
Grupo Mexico controls 88.9% of SCCO's common stock. SCCO's capital allocation and dividend policy are controlled by a parent company whose financial needs may not align with minority shareholders. Dividends dropped from $4.00/share in 2023 to $2.10 in 2024. This governance structure is relevant context for assessing capital efficiency.
-
TGB's accounting quality raises questions. Our filing intelligence processor flagged aggressive stripping cost capitalization at TGB's Gibraltar mine. Its 22.1% ROIC may be overstated relative to cash economics.
-
ERO's net margin is negative (-14.4%) despite strong operating margins due to foreign exchange losses, not operational problems. Its Tucumã mine ramp-up delivered record production in FY 2024.
-
The time periods aren't synchronized. FCX/SCCO use TTM through Q3 2025, while TGB/HBM/ERO reflect FY 2024. Copper prices were higher in 2025 than early 2024. This matters for absolute ROIC levels but less for the relative ranking.
The Sector Benchmarking Table
For reference, here is the full financial comparison across all five producing copper miners:
| Metric | SCCO (TTM) | TGB (FY'24) | HBM (FY'24) | ERO (FY'24) | FCX (TTM) |
|---|---|---|---|---|---|
| ROIC | 24.2% | 22.1% | 16.5% | 15.6% | 9.2% |
| Gross Margin | 59.1% | 19.3% | 27.4% | 38.4% | 29.6% |
| Operating Margin | 50.8% | 17.1% | 19.8% | 23.2% | 26.7% |
| Net Margin | 31.4% | -2.2% | 3.4% | -14.4% | 8.0% |
| FCF Margin | 28.4% | 38.3% | 33.0% | 30.9% | 6.3% |
| ROE | 39.8% | -2.9% | 2.8% | -9.7% | 11.6% |
| Revenue | $12.5B | $0.6B | $1.8B | $0.5B | $25.9B |
SCCO leads on ROIC, gross margin, operating margin, net margin, and ROE. FCX's only relative strength is that it actually has positive net income and ROE — two of the four peer companies posted net losses. But FCX's FCF margin at 6.3% is the lowest in the group, reflecting its capital intensity.
What this data suggests: For copper sector investors, ROIC separates the operators who convert geological advantage into shareholder returns from those who don't. SCCO's 24.2% ROIC on the world's largest copper reserve base indicates a structural cost advantage — low-cost, long-life mines with integrated downstream processing. FCX's 9.2% ROIC reflects the cost of building the next generation of mines. Whether that capital deployment creates or destroys value depends on execution over the next 3-5 years. The mid-cap miners (TGB, HBM, ERO) show that high ROIC is achievable at smaller scale, but each carries idiosyncratic risks — accounting quality, FX exposure, and jurisdictional concentration — that the headline ROIC doesn't capture.
Methodology and Dataset
ROIC Computation: Net Operating Profit After Tax (NOPAT) divided by Invested Capital, computed from XBRL financial facts processed by MetricDuck. NOPAT = Operating Income × (1 - Effective Tax Rate). Invested Capital = Total Assets - Current Liabilities (excluding short-term debt). All computations use the same standardized formulas across all companies.
Data Sources:
- Filing Metrics: Automated XBRL pipeline output stored in BigQuery. Quarterly (Q), trailing twelve-month (TTM), and annual (FY) period types with trend analysis (8-quarter median, 8-quarter linear regression slope).
- SCCO Margins: Manually computed from XBRL revenue element (
RevenueFromContractWithCustomerExcludingAssessedTax) combined with filing_metrics absolute P&L values. SCCO reports revenue using this less common XBRL element rather than the standardRevenuesorRevenueFromContractWithCustomerIncludingAssessedTax. While our formula engine's coalesce chain includes this element, a pipeline computation bug produces revenue = $0 for SCCO, corrupting all revenue-dependent ratios. We verified the correct revenue values directly from XBRL facts in BigQuery and computed margins manually. SCCO's ROIC is unaffected because it uses NOPAT and invested capital, which don't depend on the revenue metric. - 10-K Data: Segment operating income, CapEx by region, unit cash costs, mineral reserves, and growth pipeline extracted from FY 2024 annual reports filed with the SEC.
- Filing Intelligence: Qualitative analysis from MetricDuck's filing intelligence processor (financial health scores, earnings quality assessment, risk landscape, narrative themes).
- 8-K Earnings: Quarterly earnings insights from MetricDuck's earnings release processor.
Companies Included: Five NYSE-listed companies with SIC codes 1000 (Gold Mining) or 1040 (Gold and Silver Ores Mining) that are primarily copper producers with processed XBRL filings. Ivanhoe Electric (IE) is excluded as a pre-revenue exploration-stage company. The copper mining universe is broader than these five companies — several major producers (e.g., Codelco, Glencore's copper division, BHP's copper operations) are not independently listed on NYSE.
FPI Limitation: TGB, HBM, and ERO file as Foreign Private Issuers (40-F annual reports). Our metrics pipeline produces only annual (FY) and snapshot (SS) period types for FPIs — no quarterly trends (Q.TREND8, Q.MED8). This is a system design decision, not a data gap: the pipeline explicitly rejects FY-based trend computations for annual-only filers because 6-8 annual data points don't support the same statistical confidence as 20+ quarterly periods.
Explore the Data
The financial data analyzed in this research powers MetricDuck's company analysis platform. Explore earnings, ROIC, and filing intelligence for each copper producer:
- Freeport-McMoRan (FCX) Earnings | ROIC | Filing Intelligence | Analysis
- Southern Copper (SCCO) Earnings | ROIC | Filing Intelligence | Analysis
- Taseko Mines (TGB) Earnings | ROIC | Filing Intelligence
- Hudbay Minerals (HBM) Earnings | ROIC | Filing Intelligence
- Ero Copper (ERO) Earnings | ROIC | Filing Intelligence
Related Research:
- How 2,100+ SEC Filers Actually Report Revenue in XBRL — Revenue element fragmentation including the element SCCO uses
- How SEC Filers Report Cost of Revenue in XBRL — COGS element fragmentation across 2,100+ filers
Disclaimer
This analysis is for educational and informational purposes only. It does not constitute investment advice, and you should not rely on it as such.
Important considerations:
- This is a research analysis of XBRL financial data and 10-K filings, not a recommendation to buy or sell any security
- ROIC and margin figures are computed from SEC XBRL filings and may differ from figures reported by the companies in press releases or investor presentations due to methodology differences, rounding, or element selection
- SCCO margins are manually computed due to a pipeline data issue (documented above) — always verify against original filings
- Mineral reserve estimates, production guidance, and CapEx projections are forward-looking statements from company 10-K filings and are subject to change
- Copper prices, gold prices, and exchange rates significantly affect the financial metrics presented here
- Always verify financial data against original SEC filings on EDGAR
Conflict of Interest Disclosure: MetricDuck provides financial analysis tools that process SEC XBRL filings. This research demonstrates our data capabilities and domain expertise.
MetricDuck Research
SEC filing analysis and XBRL data extraction for fundamental investors