Freeport on January 26 reported fourth-quarter profits of $1.11 billion, up by 56% year on year. Fourth-quarter copper production rose to 1.03-billion pounds, from 864 million pounds a year earlier.

Freeport trimmed its 2022 copper sales guidance for 2022 to 4.3 billion pounds, from an earlier estimate of 4.4 billion pounds, although still a big jump from sales of 3.0 billion in 2021. Gold and molybdenum guidance was unchanged. Copper sales guidance for 2023 was increased from 4.4 to 4.5 billion pounds.

"The big picture story here continues to be positive, in our view, and this volatility is noise in the midst of a multi-year bull market for copper," Jefferies said in a note. "Freeport is best in class."

Freeport guided for capital expenditure of $4.7 billion in 2022, compared with $2.1 billion in 2021, as it works to ramp up production.

But despite strong global demand, Freeport is slow-playing the development of its Chilean El Abra mine, as it waits to test the waters of government support. El Abra, which is 51% owned by Freeport, produced 160 million pounds of copper in 2021.

"We're expecting a 30% increase in 2022 production at El Abra off of a relatively low base," Freeport chief executive Rich Adkerson told analysts on a conference call on January 26. "But we plan to sustain a level of 200 million to 250 million pounds per year for the next several years as we assess opportunities there for future growth."

Chile's left-wing president-elect Gabriel Boric will take power in March 2022, with miners waiting to see what that means for taxes and royalty arrangements.

"We would be in a different situation with El Abra if the political issues about royalties and the fiscal regime for our copper production in Chile were different," Adkerson said. "We would be moving more aggressively right now."

"What we're doing is we're preparing ourselves to move forward, but […] we're deferring any decision to move forward until we get some clarity from the government in Chile," Adkerson said.

Analysts remain bullish for the development's long-term prospects. "The 51%-owned El Abra project in Chile would be capital-intensive and is on the back burner for now due to tax/royalty risks in Chile but has the potential to be 'the next Cerro Verde'," Jeffries said.