What happened

Shares of copper miner Freeport-McMoRan (FCX 2.23%) rose by 16.5% in June, according to data provided by S&P Global Market Intelligence. Usually, when such moves occur, it comes down to either an increase in the price of copper or some positive earnings announcement. However, neither of these events occurred. 

The price of copper started the month at $3.64 per pound, hit a mid-month high of $3.91 per pound, and then finished the month at $3.71 per pound -- a good month, but nothing to write home about from the Motley Fool trenches. Similarly, Freeport-McMoRan didn't release earnings in the month. So what drove the stock's price higher?

There are two possible reasons. First, the news that Chile, the world's top copper-producing country, reported the fourth straight drop in year-over-year copper output. The country produced 14% less copper in May than last year. That supports billionaire copper investor Robert Friedland's argument that copper prices could soar as supply struggles to meet long-term growth in demand.

Second, on a more Freeport-McMoRan-specific note, Indonesia is believed to have granted Freeport-McMoRan export recommendations to continue copper concentrates until the smelter it's building in Indonesia starts producing in 2024.  

Indonesia seeks to process raw copper domestically rather than export it, and Freeport-McMoRan has significant operations in Indonesia. For example, the miner produced 329 million pounds of copper from Indonesia in the first quarter, compared to 332 million pounds from North America and 304 million in South America in the same period. 

So what

A production decline in Chile is good for sentiment over the long-term future of the copper price and helps highlight the supply side of the bulls' argument -- the demand side receives ample airtime as it's based on copper's increased use in electric vehicles, renewable energy, and the electrification of everything theme. That said, it didn't cause a significant uptick in the price of copper. 

The news from Indonesia is somewhat more positive and helps derisk Freeport-McMoRan stock in the interim before the smelter is operational. On the last earnings call in April, management said the smelter was 60% complete and on track for commissioning in 2024.

Now what

The company will release its second-quarter earnings on July 20, and investors will be keen to learn about its plans for Indonesia, the CEO's outlook for copper demand and supply, and any updates on its leaching technology with which it hopes to increase copper production.