Freeport-McMoRan Inc - Class B

Freeport-McMoRan is a major consumer of nitric acid produced by LSB Industries, which is essential for its mining operations. The demand for explosives in mining is growing alongside global mining activity, indicating a robust source of demand for Freeport-McMoRan. Additionally, the current disruptions in the Middle East and the structural changes in the energy business favor North American producers like LSB, which enhances Freeport-McMoRan's operational environment. The increased price agreement for nitric acid underlines the company's commitment to securing essential inputs for its operations.

Freeport-McMoran (FCX) was one of the top five holdings in our Core Portfolio, showing a performance of +13.2% in the first quarter of 2026, outperforming the S&P 500, which was down -4.3%. This performance reflects the resilience of our Core Strategy, which is biased toward industrial, infrastructure, and energy-related businesses. The ongoing geopolitical tensions and economic landscape have reinforced the importance of energy independence and supply-chain security, which are relevant to Freeport-McMoran's operations.

Freeport-McMoRan is one of the world’s largest copper miners, with operations in the US, Chile, and Indonesia. Following the tragic accident at its Grasberg mine in Indonesia last year, the stock has recovered as management has demonstrated progress in restoring operations. That recovery, combined with a strong copper price, has supported improved market expectations for free cash flow generation.

Freeport-McMoran Inc. is described as a global mining company with significant reserves of important minerals. The letter provides a revenue per share growth rate of 4.4% over the trailing 5 years, and a 15.1% growth rate over the trailing 1 year. However, it does not provide a directional argument regarding the company's future performance or investment potential.

We increased our investment in Freeport-McMoRan after sharp price falls. Freeport-McMoRan has one of the most impressive global copper endowments and with one of two US smelters, substantial strategic value. The extreme supply-demand mismatch in the copper market positions Freeport-McMoRan favorably for future growth as we anticipate continued deficits in supply.