By Ernest Scheyder
HOUSTON (Reuters) -Freeport-McMoRan hopes U.S. President Donald Trump declares copper a critical mineral, a move that would unlock tax credits needed to boost American production of the red metal and offset global rivals, CEO Kathleen Quirk said on Monday.
Trump told the U.S. Congress last week he would "take historic action to dramatically expand production of critical minerals," although he has yet to provide details. Copper is used widely across the global economy in power generation, electronics and construction.
The U.S. Geological Survey lists lithium, nickel and 48 other minerals as critical. Adding copper would help Freeport generate more than $500 million annually in tax credits tied to the U.S. Inflation Reduction Act, Quirk told Reuters on the sidelines of the CERAWeek energy conference in Houston.
"Having the incentives and clarity around those would be a big plus for the domestic copper industry," said Quirk, who became CEO of Phoenix-based Freeport last year.
"People are understanding more what copper is used for and its importance in our economy. It's just a matter of time before it's classified as a critical mineral."
Former President Joe Biden's administration extended the tax credit to critical minerals last October. Copper producers cannot access it unless their product is labeled as critical.
All the copper that Freeport produces at its seven U.S. mines is consumed domestically, making it the country's largest producer of the metal. Freeport also operates one of two U.S. copper smelters and produces more than 200 million pounds of the metal annually using leaching.
The average grade, or percentage of copper in rock deposits in Freeport's U.S. mines, is lower than elsewhere, boosting costs and making the U.S. Freeport's least profitable region.
"We're not looking for handouts, but if the government is trying to incentivize domestic production, it's important to recognize that the U.S. doesn't have the same grades that we have internationally," said Quirk.
Last month, Trump launched a probe into potential new tariffs on copper imports to help rebuild U.S. production.
U.S. copper tariffs could boost Freeport's profits by $400 million annually, yet the company is worried about their impact on the global economy, Quirk said.
"We're not out there advocating one way or the other. We're wanting to make sure that there's education so that there's informed decisions about all of this," Quirk said.