| Controlling 9% of the world's production, Freeport-McMoRan (NYSE: FCX) is one of largest producers of copper in the world. Why should investors care? Because the long-term future for copper prices is looking extremely bullish. Renewable energy is a huge long-term tailwind for copper demand. Electric cars, power grids, and wind and solar energy buildouts are all going to require more copper. Renewable energy systems use, on average, five times more copper than traditional systems. Meanwhile, more and more of our energy systems are transitioning to renewables. The estimates of how much more annual copper production we are going to need are staggering. S&P Global, for example, is estimating that copper demand is going to double by 2035. To put into perspective how wild copper demand is going to be, consider that S&P's numbers project that we will use more copper between 2021 and 2050 than we did from 1900 to 2021. While demand is exploding, there also appears to be a supply problem. After a decade of underinvestment, there are very few new copper projects scheduled to come to production in time to meet the projected demand. This is concerning because it takes 10 to 20 years to permit and build new copper mines. Simple economics tells us what is going to happen in the copper market. Huge demand and a shortage of supply simply will drive the price of copper higher. That is the only way to bring new supply to market. For producers like Freeport that already have huge amounts of existing copper production, a rise in copper prices is going to create massive increases in cash flow. Recently, the price of copper has been hovering around $4 per pound. For Freeport specifically, every $0.10 increase in the price of copper results in an increase of $335 million in operating cash flow. Unquestionably, this company has a lot to gain from long-term rising copper prices. But right now, we need to consider whether Freeport's market valuation is attractive at today's prices. | 
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