Earnings call transcript Q4 2022

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Freeport-McMoRan Fourth Quarter Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions]

to conference like to now would turn over the Ms. I President. Quirk, Kathleen go ma’am. Please ahead,

Kathleen Quirk

and to slides morning, Thank call, morning. our fcx.com. financial good you, Welcome copy a on XXXX quarter operating of everyone. our results, fourth at and and release the to Earlier available reported this and we press XXXX and are happy conference Freeport-McMoRan website

website is and call call today conference being and our anyone by listen conference on the internet, broadcast the Our the on the may to accessing for webcast homepage clicking live link call.

investors, In addition of to financial our website been analysts today’s on a available and invited to to replay call, later be and the listen today. has will webcast the press

that on and of the in may everyone and factors Before described release we begin cautionary in call our the differ the refer and included risk presentation comments, and everyone press our SEC materially. certain today’s we’d actual filings. comments to forward-looking our language remind like statements, include to results to press Like release our materials to

our Technical of Kendrick, Group; all Rick Officer. Cory molybdenum Engineering is Higgins, projects, Stevens, Global involved are Olmsted, On Chief Officer our business; our Adkerson, our call and for Operating as who Steve in Johnson, Americas; CFO; me Indonesia; Maree Board Richard Executive overall Services our with today Administrative the our and Coleman, leads Mark our Chairman who Robertson, as of heads Officer Mike Chief who and Construction Chief is Chief our actively well the Josh of who Officer; construction the Operating

then he’ll Richard start to open opening and up and it call remarks, make here your have cover to materials, a we for the full So, back it some team and Turn of slide management the will Richard. turn questions. we’ll you, me we’ll today. we’ll And -- complement then

Richard Adkerson

all joining Yes. us you Thanks, Kathleen. today. for Thank

themselves. review will work. team, brief, The It It the the remarks, and our our my fourth reflects quarter. which after hard for she said, appreciate will was overview Kathleen of a speak everybody’s results performance As quarter. be much strong for I numbers global

and I who at morning our I and look But business, know better you, in is is. this is fourth it maybe tough for recognize Nobody mining results of think, done a do, remarkable. and you that, and what certainly of than XXXX major read two one you particularly Most a into our segments. is business the knows reflected we’ve need all the of said quarter, report, to Freeport me. in

Indonesia gold is cost large in largest operations by a Indonesia byproduct. grades PT Our Freeport characterized content, and the low of the in the world is mine very volumes, gold by because very

net pound. As mine largest a a it the you’ll fourth world’s second with operated cost see $X.XX copper of in as the quarter, unit

Our different. business Americas is in quite

like it’s We process the low be grades, have copper, low gets the there’s prices have and much recover in among mined to factors that to largest mines the copper material inflation. to mines be in processed, an by the and challenged more operation world,

situation year, you opportunities, expansion results future very is when done has the It’s meaningful But which positive. world. what at particularly characterized large brownfield having this in it’s look given team some our the by and also the copper the been of

of the XX-plus mining largest up in for just years. to underground ramping been underground performance. long-term that we the investing rock It become solid was operations it We’ve past the operating past in years been business. now. our just world current for operations the We’ve the the been three XX Indonesia, underground there nature over reflects years have

late transition we’ve targets risk for of mining early COVID. we this in and is most very was And completed notable. our viewed as which and world. the our been in a And pit that since team had reached at the results been our hard really the major XXXX, them. XXXXs. overlying the the production that it’s the metal have mining what’s discovery targeted the years three bulk arguably Then a of operations faced XXXX. Freeport’s Grasberg of mining complicated of of the of years, ore end all it’s proud business. just mine accomplishments And pit, last We work The in We that accomplishment there, completed open body the

business well copper that workers with low there, terms in very operations issues dealing the prices, we’ve are getting has had meeting have challenged done the in our challenges Americas. in we a dealing The of of Americas inflation, period that with for

manage Our Peru Peru they operation in that complicated. in now political There severe protests country. The throughout very COVID challenge situation a the with right are is well. was very facing

Our team doing well. is very

continuing are and people manage We continuing to operations. feeding our our housing,

have for We support fundamental local are relationship our we run, by established support slowing great we down supplies and a make bit our because long workforce for but to have them. community with the there by the a we’ve sure such business

as XXXX very the sheet a But don’t -- conservative is out to financial try see do even having and with trying We of copper risks to to going we’re that it end world ourselves. difficult. when they policy. into occur market deal It’s today, over and -- by now a short-term strong on short-term the prepared the well-known we movements deal actually are we So into are much for negative We good predict we outlook to going the the fourth look balance improved prices right with is it. actually faces sentiment now that quarter.

to acquiring we increasingly and copper’s way, And fundamentals is based years our to over long-term measured operations outlook global have in be And committed a other run that copper asset the It right is XX having than Kathleen? single the we our right a ago years and for to supply. going ourselves a really is on long of the decision decision growing the but protect managing by XX everything is by more XX in business. operations we is in rationale the mine long-run the the this years were focused, short than success Phelps positive reinforced run. of we demand the being combination do balance and special copper ago Dodge today we company, We -- when not was strong sheet, right Indonesia on are Americas. now. the We on to focus business have and ago

Kathleen Quirk

finished our We’ll performance strong with sales quarter. start press a year our the gold Richard. net estimates summarizes with into the consolidated fourth per fourth which quarter and copper on $X.XX And guidance. of on unit adjusted the costs the Copper We better our strong in $X.XX year October notes were we from fourth EBITDA XXXX. X, our for Thanks, exceeded couple cash full realizations quarter billion. generated just With quarter the a the average pound, quarter at margins in going approximately slide of And our release. fourth of per pound quarter. $X.XX than

a the effective year, we are with we XXXX, in XX% environment. volumes a by proud sales the compared increase XXXX, execution XX% in and growing at After in for focused and another higher team with copper successfully XXXX in driving of XX% year volumes. copper achieved gold Looking for XX% growth of gold results our volumes on on our macroeconomic performance and volatile of stayed

levels grown and the and our pandemic. low-cost had in In XXXX enhance mining our production Our technologies in team Chile labor And world’s and restoring shortages impacted teams that during Peru and underground teams advances levels the to sustaining production a maintain U.S. significant been the by production in on largest also has value. XXXX we made Indonesia production at complex. despite ongoing new successfully the Americas, large-scale, materially resilient in at proved

the cost EBITDA, swings commodity and generated adjusted $X.X of billion we For was year a drivers. that and year, in prices in dramatic

$X.X debt in below year, which was and with mid-XXXX cash capital to cash pursuant in level our performance-based net the requirements Our initiated payout billion, ended our were policy. the nearly substantially that’s our debt, of working we to billion operating when excluding with return policy. payout the performance-based and the shareholders, We our flows smelter our associated investments of year our of excess we capital net of operations, in tripled $X.X for

you’ll X, during slide we’ve listed the year. see notable On accomplishments

areas validate all to to driving progress to we’re climate Copper operating we’re and in addition value parties expanded transparency enhance work the we’ve Mark measurable the and developed our under our financial achievement, very of operations proud accountability. and In of third disclosures of making our with initiatives the standards, on our

to $X.XX $X.XX We’ll talk recovering about of with a next, high pound experienced We to move level and pound to XXXX, to pound got in midyear significant have per to rather prior page been in during volatility sentiment per currently based on earlier X. a continued seen from copper of and falling trading by many fundamentals. of $X.XX lift. dramatic clouds year, we’ve macroeconomic pound the as as been prices you several higher moves partially on the slide per began the calls early Prices in on XXXX We approximating discussed have XXXX that largely per -- year-end. $X.XX markets a than

that of economy acceleration levels tight use the coming At a in global in clean early inventories data and the as the that’s same long-term year. of a of continues physical are a grow by of innings copper electrification. intensity in secular importance time, the out the even energy applications period believe of driver of for of demand. the available copper the remained have low markets economic result We of copper’s we’re still The evidenced weaker facts China, and to throughout during the broad-based

demand ability in this growing the of deficits multiyear challenged, meet large industry future. be the of leading to market The to period to continues

and copper We’ve to for and day, economy. and We’ve prices periods the managed how needed volatility, in effectively and read believe a downs about this, in the is we’re through it’s challenges but prepared long-term market. new to lived not of these the harder, sheet point we step long-term our incentivize are supplies. You copper valued operations in fundamentals higher getting the every easier, change balance real ups during

X. position slide a mines high-quality on and benefit gold exposure We copper diverse reserve to from significant our molybdenum. portfolio to of with geographically Turning

end show benefit centered XXXX probable and copper. XXX with reserves. the assets are And Our from that over strategy, of billion reserve We with a characteristics replicate. position to as being portfolio of pounds Richard foremost difficult very discussed, at proved of is around we our in

principally We twice where the average of in we XX We have of reserve districts Safford life added XXXX, mines Morenci Star growth. focused over we’re reserves and produced on future an years. Lone U.S. in at our amount the

resources pounds the in great U.S. of located this to where these resource and convert reserves, viable to forward enormous of go an It’s mine record the production. more addition need is have we as and a copper. track probable extraordinarily plans a Over into position valuable valuable operations, to work XXX world billion resources to continue have we in copper we proved a In We’ll mineral future. half franchise. future going that’s of in established and

to molybdenum business. molybdenum our on slide wanted on got some a X, And we’ve We about little on focus this information bit call.

that a industry. We’re leader in

in We’re comprised interested balance in we XX% our only these learning And the in the a primary mines And XX% from over world’s primary the XX in of largest molybdenum over mines as move molybdenum produced States. thought producer the that last mines Colorado. molybdenum, more about margin. of that’s operated about the byproduct from price of We that the in be molybdenum United XXXX, with by and copper and are we are pounds a business. operate currently two months million significant couple you’d

downstream drivers per pound in per price of metallurgical that range The same of quarter steel move a are We of power in oil sectors. and And to and specialty applications. currently $XX facilities from the pound gas, to have issues driven to the used over by demand be that impacted products operate been supported processing at generation start and continue the the $XX supply aerospace copper. some also has addition, broad from produce chemical fourth

additional EBITDA at $XXX pound, So, slide, the our we in the leverage prices, of in change annual to it’s if molybdenum $XX adds and flow. recent a cash million And this sustained $XXX results. material of a higher million in at note over impact $X move on price, per

to technology about volumes for at year sales sales South X, and for to as given in Indonesia. America leaching we’re operating sales planning and U.S., were advantage incremental few our similar on by we in the In by we’ll talk our from XXXX focus the advancements slide production about current we’re Looking from Indonesia. In from U.S., phase at our next of and adding we’re from XX% stats taking the XX% limitations U.S., on our of see cost, on South XX% levels, you’ll our growth, were opportunities a and low and the our America expand in continuing productivity, minutes. XX% XX% XXXX workforce, grew the to

biggest the social and recovering position from all resource Peru our real have the States. that opportunity and complex After and pandemic-related with we in associated XXXX challenges Cerro interruptions source America, grew South in a a in In unrest successfully both discussed, dealing Abra is in of As in political team long-term is environment. you’ve the growth now with Verde civil read about. XXXX, production United El

security workforce. We’re the of safety and prioritizing our

very dynamic it day To carefully. have We’re date, day, the been supply but impacts we’re is the and significant navigating disruptions and watching situation by to not transportation chains. routes

the cost The chart XXXX performance. the of bottom shows

inflation talked we’ve in year, cost experienced historical and calls, and rising still costs business from situation of dealing excess particularly XXXX, energy see started and to started we during of but levels. of XXXX to prior a with the the number consumables, second improve with inflation a half materials, other commodity-related about we’re significant services. consumables, for on the across As commodity-related of in pressures The in the supplies

If at of remarkable, pound particularly per year average at Grasberg $X.XX you for context the of the is this in the environment. cost look cost

a mining the for be for transition, started got industry of success details Freeport stayed the Richard from this for global proud Johnson, from Mark in we’ve were the on and We also on significant only transition just to team benefit has our with we’ve over ago, the the success of over term years talked foundation team the established great The of involved including about XX from of team opportunity plan of country planning added years got beyond XXXX. continuing years, Freeport, something it story X, the Grasberg has project, to this several who job. long-term resource a opportunity to really the new talent over experts mutual We’ve the significant the but over and communities the in call, slide with with partnership longer government of world. who’s built success project, this Indonesia. are the planning not to this the period. the around outstanding for fact And to an strong and We and this done that the this phase some our Indonesia between with of government the local the future. discuss development respect extend

was to go our And this our expand project. smelting and an Indonesian capacity XX, you commitment Indonesia. government, of smelter to If feature copper our key is refining we’ve got to in the domestic slide update on

Smelting on Eastern constructing our smelter in We’re making really progress near the good smelter, Java, existing PT new it’s Gresik. at

is advancing. that can You on got from the of construction pictures We’ve site. thousands now workers see

much completion up milestone delays were possible the to closely as over with begin we a recently to EPC to very expecting try We are by of the that pandemic. commissioning caused during as reached smelter XXXX. XX% contractor working We’re and our make

recall, investments project you are being that from during the bond this funded completed capital a As offering successful XXXX. PT-FI for

so, have revolver project. we PT-FI offering and funding And the the between this at to bond fund a

next phase organic and portfolio is all within exciting of operate our continue plan mines have got having to benefit Moving to projects This We’ve over outlook. opportunities we in. Company, develop for multiple we our the time. from the growth interest We the growth. to

across operating share synergies across value to experiences, can best direct as projects, the able capital portfolio highest we develop practices the and opportunities. to portfolio technologies, the we and We’re new

streams strength. sustainably a earned a capital is all are to for costs we’ve with analytics record notable track and intensity, Americas management The new continuing, value. lot carbon our we time of The compelling, The need leach to The world, And more. on economics is importantly, data be and operating and to responsibly. capabilities the are lead and capacity project about applied low operating a shortest footprint. our and a capabilities, believe, prioritize going a technical initiative. We’ve it proven highest projects calls. in reputation work recent Our we low low incremental talked is the our

to and work that the you enhancing identified get benefits leach new areas our from in because apply to continuing of pursued we’ve heat retention We’re covers the not were stockpiles recoveries, that historically.

We’re really also that additives recoveries. continuing This to various further test us. for can enhance a opportunity significant is

the opportunities provide rate annum a and this run this We’re per continuing year by larger. would level million of pounds success -- to target this to XXX of level scale end at of

our to long work lead and great innovation in inventory this large position We’re history to with with. in a leaching

mine to that site. Arizona, we’re Bagdad double Northwest production study our in feasibility progressing At a at

expect tailings how the started this a to but be We this site as feasibility that and assess quickly the future expanded We would complete would position new development. brownfield options more support also to development. on of a in planning provide a time flexibility to could the greenfield the And we developed production. be year, a we’ll construction than advanced project operation, commence expansion, for existing

in The Our levels something massive. up is opportunity original project. Lone in above the major we’re development we the more for long increasing in mine stages really term. the opportunity quickly, of And this as the development production Star the is a we’re mine, opening been resource oxide We’ve special. sulfide early ores successful substantially really

resource You’ve XX here. numbers, seen of the billion potential pounds

We’re in in of an it’s established drilling. the doing located mining lot importantly, district a And U.S.

major Abra for our at El defined the a Chile, expansion we’ve mine. In opportunity

operations to infrastructure provide As we invest we’re support concentrator. flexibility a infrastructure, fiscal a in to planning regulatory optionality to to and Chile, matters water existing extend monitor and new in to continue project

near for term, Abra planning new possibly the the El leaching technologies competing leach production technologies expanded evaluate concentrator. at to test potential to a also and in to We’re

our continuing development Indonesia. We’re Kucing the of in deposit Liar

lot Cave. We’re to similar efficiencies project. at really development, gaining Block from that this did And a work we Grasberg a long-term of the is

to have production Kucing initial expect decade. Liar end towards the this We from of deposit

we And slide sales. similar sales in currently, reflects a outlook XXXX forecast We period the copper provide that our volumes. achieved to years three-year as ‘XX to talked to And two sales our ‘XX XX. in growth are Moving we for levels. of about,

result And Our sale to to of changed point pounds arrangements be and higher cathodes. XXXX. mine million about the in Indonesia our than a has going in production actually selling sales our XXXX by where is from domestic is that XXX processing selling of concentrate

will And production so, and of smelters. until processed a our through portion be sold inventoried it’s our

U.S. this that would impacted guidance success small inventory some initiative That’s tight Previously, look labor continuation otherwise increase to third-party mining have held period. leach our three-year provide got reflects next the smelters. a And rates. our in in also revisions in the been by assumption the of over as ability XXXX to we U.S. We’ve upside could of markets recovery

XXXX the can first Indonesia. at quarter. quarter X arrangement slide materials in quarter. information reflects over see In the the is tolling drop year provide impact in The of by reference we billion But, reason on copper the the you of per sales of XX, on for the stable sales pounds the our fairly balance

higher the and cost than And XXXX, X.X% average. higher compared Indonesia, of requirements, power impact and of site our year. a with assumptions for the see that’s labor of production cost we’re the result of increases. for to show That average of XXXX in years, is and providing comparison a outlook higher that two line supply coal cost costs components, per and in we’ve in also to the cost and item with you’ll made We per XXXX. equipment average average $X.XX principally the XXXX about pound higher pound cost the electricity the costs $X.XX forecast Moving compares for guidance

The other line items are offsetting.

and note molybdenum smelter royalties our assumes a Indonesia per decline I’ll each That in price $XX pound result really The You’ll per also pound is progress. $X note of pound in and a pound. this of of current is that duty recent XXXX. molybdenum a in is price $XX reduction in as $X.XX reflective in a duties. the a a change export

prices cash pound roughly net reflects. cash if hold, So, unit current a $X.XX would and have less -- costs this

experienced severe months, recent pressures been less inflationary XXXX. have we than during In

can focus that. to by And encouraged we We’re we’re continue costs managing going control. on to that

We’re continuing particularly technology-driven impacts, to pursue the mitigate in to U.S. enhancements the

to $XX here operating modeled flat and flat copper. Getting per volume billion pound at molybdenum for show at copper. over $X,XXX and pound prices. billion at slide various are cash And would These from copper cost billion And with $X.XX per range the EBITDA to at EBITDA our gold per copper per from estimates range We’ve cash $X.XX nearly copper from annual XX $XXX got annum pound. billion per ounce these our holding XX, prices and XX per we see would we on flows, that results significant flows you’ll results use copper, $X flow ranging $XX of and modeled cash average at prices and at $X at $X copper. current annum and $X leverage $XX to $X to to

show prospects sensitivities we’re we trends under the positioned increasing and payout with intensive our costs. from metals large-scale various performance-based to well returns future production, framework. for cash from growth commodities input long-life future to benefit -- And our With right and reserves on

reflects expenditure totaled times We’ll our in capital that note the $X.X billion, XX. critical lead this lower to plans are going we and $X.X Our into capital prioritize XXXX, expenditures than summarized excluding focus and smelter the on was estimate year during that billion The the provided XXXX. slide projects.

billion completion. as support for the estimate billion, forecast XXXX change are market and ensuring condition, XXXX $X.X managing in of profile. that’s for previous always billion production that long-term to a $X spending Grasberg cost totals sufficient $X.X projects slight capital to XXXX. And on currently our flexibility expenditures maintain very forecast approximate from our to for reliable current careful in to investments our The capital while are a We reach response

implement we It it’s been a in priorities. this dividends of Returning our XXXX, the flexibility significant provides second share balance projects. maintaining three future. financial cornerstone XX% of and policy really of in is and to available centered and financial provides began returns be strong to half allocated sheet to the And that the liquidity. balance The in on to that payout. the policy flow form for executing free performance-based the purchases our of invest shareholder We’ve the cash to on for

impact in dividends Since performance-based strengthened time. not policy second flow sheet, will about change overall for market because our share of cash in which we’ve boost and returns, free the through conditions our XX% and and shares projects drive purchases. funding market of also conditions. and balance second of the the future purchases on over The to will And cash the we flow dependent XXXX commencing capacity second did of increased our XXXX, half providing share shareholders further be payout the improved resulting the shareholder cash half We market will conditions cash on in returned year. in of at free the flows significant flow, time, half same the new discretionary purchase our

of balance value shareholder cash our a growth strength, of will and to three flows believe We allocating the enhance long-term sheet mix returns, organic business. of priorities

we assets, attractive want by for copper just long-term about Company, serve. I by supported our the the to the supported fundamentals closing, the of the outlook positive and business reiterate the a markets view portfolio of for our In bright positioning future

Our energized. team is

in responsibly, continue plans value efficiently. our to long-term on safely motivated and executing our and building business We’re

call for attention, you open and to thank I we’ll your questions. And for want the operator, now

Operator

Sachs. first [Operator line ahead. Instructions] the Please will with Goldman Chieng from Our go question of come Emily

Emily Chieng

plans? my think developed? price Good when environment has pursue the play growth or around lot wouldn’t And would copper ask how to morning, like basis opportunity Thank the And into of broader you the growth And and a that environment can mind around Richard I Freeport’s as mind run the about need appetite. rate changed been changed you trending, leaching some annual of how maybe to look that you. macro is what view and could market There’s accelerate I your Kathleen. sort you Freeport’s in how in taking questions. potential clearly thank the like as about for hearing and well. fully has anything

Richard Adkerson

With not to Emily. or ourselves conserve else. we’re Thanks, leaching, capital anything constraining

a and -- doing vendors, things is number great our for we using as aggressively outside it we We’re low joint different add with this capital are some such a on just can, carbon. companies. fronts, pursuing opportunity own, are some of that It’s believe production pursuing as such a opportunity cost us with in ventures and we great on some we at it to low

constraining. it’s So, not something we’re

have, projects recently that wait prepare them, forward. and major are capital become a other are capital facing multiyear -- go we are are clearer. the projects hard can going The we working for to so that we large to reviewed and uncertainties Kathleen we until have ourselves series for And been we’ve that of requirements. work those, But them we doing that

market, As was the lot as I still a but see stronger in said, it of market much current there’s three overhang the than is months the sentiment ago, can today. you in

project are is Chile the waiting laws its on in So, current this consideration and its the direction constitution. with country goes see our that in to dependent of we

until that So, really on becomes going is to be that clear. hold

So, of XXXX. we’re did not preparing any part change in we what XXXX major versus first the in

Kathleen Quirk

operations recoveries places just get getting Those leaching that laid attained operational be solutions places -- that that that guide we data the operationally. we’re the where we’re we million analytics leaching The heat we’ve helping changes in that pound enhance -- can day. can things every from from directing retention, previously, we these we on that XXX can run leaching out, those just the weren’t think to making. us Emily, really target that our believe are we helping rate,

could of on that that’s -- development and it with that, on additives, this The top scale respect to research going larger.

we’re on XXX back these that the we focus on doing, about, last more over this pounds more been starting things years, putting identified talking it’s aggressively I and initiatives, things. to stockpiles we’re think and that wouldn’t concentrating. leach has really some just -- light low-hanging results. that already we’re several but bringing million a industry the is So, of fruit, moving the our on achievable we’ve leach and see And we’re focus say to now on

Operator

Your next with Wowkodaw Orest the line of from question will come Scotiabank.

Orest Wowkodaw

to there you on China uncertainty updated Like give demand? slowing the of seeing markets, can any you an out given customers? you’re what respect Chinese from seeing Just outlook ex are both and us indications your with

Kathleen Quirk

of but you Richard, are produce mean, not customers can of for there’s this we’re to pockets -- I that to there’s selling And produce. me demand, Orest, -- everything there that? physical weakness, want continuing ability pockets are course, just looking to, take for. we -- we’re us do there’s in that at no strong we’re residential more point, markets see the

So, it. come the healthy, on of we we’re continues -- U.S. produce continuing we would selling marketplace. to we part of produce. our And and so be customers insights strong, a -- very balance, because physical significant if everything most to And is want be the market from could can have market our the I’d say the generally, within and U.S. more, we’re that

Richard Adkerson

what world between one than was I even our to mentioned more conference market call with were you’ll then I back physical Even and we a dealing was think XXXX, recall, with, the customers on that disconnect there looking doing. the

everything people with that was wire production. as being actually shortage couldn’t -- there where selling meet that a And we’ve in been copper and was our So, had our we produced. concentrate it were customers, had, that -- we rod demand China, of then, produced strength no actually striking of the including was buying problem more. wanting that all States has we United We’ve to the

but And is sentiment better very to our So, positive. customers be now. continue market

Operator

will of LaFemina Jefferies. with Please Your from Chris ahead. next come the go question line

Chris LaFemina

net of the billion $X.X have of of You XXXX. debt as end

Your range to debt net $X target billion is $X billion.

billion guess, $X to that is range debt to is up get I to So, billion to generating Are or $X other In positive this really accelerate that words, buybacks, can step that maintaining about? billion first flow? do do you we question returns. the from get think here, we billion, the comfortable you range below the you get range? year, You happen? if But to to $X a should cash that want is, that not how going maybe net $X

Richard Adkerson

Well...

Kathleen Quirk

go -- X.X ahead. The

Richard Adkerson

than said, just the faster to But get we got future of projects. money say, construction of in any readily to cash policy, it’s debt flows can to finance cash zero I the be the spend long talk Two But, it looked details. by the is announced aside is, history, in and debt. to and When just nature our previous because financial own. I was Kathleen a is our capital Chris, because where what we to can just on lot up likelihood out has net way It that setting term. time. smelter before financed don’t it Freeport. that’s us of this takes between the happened debt I the will feel to we able going and target to our down This projects No, debt This our occasions that to the its cushion as having does is are -- come about in is, the versus going we spend is compulsion allow target.

Chris LaFemina

Okay.

rather $X think we $X below of of as should target debt a than net billion? $X So, billion billion to it more

Richard Adkerson

Well, I think...

Kathleen Quirk

is yes. billion the $X what $X Yes, to is billion to limit. we $X billion billion $X --

Chris LaFemina

it. Got

on sorry, then Good. question And second Grasberg. Okay.

like for your production the it copper increased ‘XX, XXXX, are pretty volumes and looks you’ve -- ‘XX much same. gold guidance but You

and happening is years? you three of to get terms what out -- those over to of increase So, expect something mine an what’s there in in that there result gold

Richard Adkerson

while revisions that mine look report there It is And we complicated. change recovery. It’s in mineralization And... plans. the any is of the quarterly. future target. these mine -- planning the wasn’t you’re just some the what way resource planning And the seeing our optimize to ore as we simple, way results fall planning out the Well, bodies mine numbers that of mine

Kathleen Quirk

higher than Yes, helping gold and previously forecast. recoveries there we had been additionally, getting Deep changes us some MLZ. was Block between well. Grasberg as And that’s Cave we’ve And

So, main differences. are those the

Richard Adkerson

of -- results targeting It’s the didn’t value. exercise, do more and the -- process it at just it’s dynamic a not to and you Chris. that’s maximize if mean, orebody, the we it’s try not we to gold. look report It a is. that And I something it targeting a was get we what process, to

Operator

line America next with go question Lawson of from Winder will Bank ahead. of the Please come Securities. Your

Lawson Winder

Good hear morning, thank time you your nice questions. I two wanted for and today. update to Very Kathleen. Richard. both, Good ask morning, you from and the to hopefully you

these is cost as that percentage XXXX? continue costs to on year-over-year what Like those To of more for some higher what XXXX. are into potentially opposed Just cash extent the more structural cyclical? one the guidance of CX might

Kathleen Quirk

and you and is is I think kind its that The at I Materials stays look our of is think, a a things that I more of look can makeup energy, provide supplies, you. more makeup. component we And variable of -- driven you of costs. acid and something driven. sulfuric labor cost On the services that’s is a slide, think commodity can with component variable. like at

some and ones that at get change, look pie and and we the can costs. things a ability provide diesel like chart have you which So, sensitivities feel currencies on to for

Richard Adkerson

one And of be. that benefit as operate is one a we thing sure much ought not we that’s I’m in. that’s we say this it But, -- if that real recognized every to interest lot. have Okay. mine thing a Freeport an as

us important run have we rights. operations other venture that through really operatorship ventures And globally unlike joint We of operate makes But where suppliers. those partners. joint standalone our a are business, customers as our

major customers one generally of who provide people supplies. of very largest We’re the our

those estimate. mitigating working below have you in real affected costs. with dynamic been in But a as been our our supply again, certain have and -- working impact. of global input along quarter-ago operations had it’s pass some our globally We’ve saw suppliers we those team so, situation to came And their cost,

are costs try we work we and low cost ongoing best we over, can. Some hard the moderating, we have, operate thing. a an give you to some are as it’s carrying just as then with outlook to but And

Lawson Winder

around that up referring advance Is water comments capacity? to on I then... your there? Are what infrastructure. to to follow And you considering wanted then, you’re And El Abra desalination and the plans

Kathleen Quirk

Yes.

Richard Adkerson

Yes. only the alternative. That’s really

Lawson Winder

time what line Okay. that? on And then would the be

Richard Adkerson

it now, a concentrator our current with structuring, large-scale going or of we’re right and there. we have and new so operations alternative working forward undertaking investment Well, that maximizing and on the we’re those

alternatives we’re But it was it going of So, be of we directions. way the the those to give wanted going to in that ourselves approaching one to either get or with other. required because started

Kathleen Quirk

Yes.

on so, as got well. go permitting process And through a we’ve to that

unlikely years a until it’s it on we’ll have spending few material So, out. any

Richard Adkerson

But because we water, it. the so do And going it go in that I we so to decided the said, desalt other. been the past, that one with we’ve way the made time -- months, takes to -- as need need for the It or concentrator -- we’ve on expansion. we delaying to recent the ahead plant, permitting decision we’re in

Operator

the next from ahead. John come of will Very Tumazos Your Research. John Independent Please with question go line Tumazos

John Tumazos

of is you in with constitution morning. on in taxes or You’re of sort of the engineering the a and tough of air. the have lot a takes these it Abra the that and for up Good Congratulations time projects. I but the each little stuff all more? projects, the all maximum engineering realize the business. do Thinking five Is number for El progress slide XX five resources

a big in investment time. So, that’s

every too a Americas a enough for must attractive, don’t and Sierrita an new mill be I maybe know with lot and U.S. there you’re projects? Indonesia I biggest the much day. your you reserves. copper of the fix XX for since U.S. the politics, projects you’re CapEx but additional better not in producer? long you thoughts, looks mill, how or Is that’s You your And know mill do at -- Morenci molys the very lower can’t have there. anything the Sierrita term mill $XX-plus Chino XX budgeting everything. But

Richard Adkerson

have a world of no. new need future know is going personally good copper. pipeline believe large it’s story that to to this I Well, you and the projects, And

Going to from support Kucing current that no doesn’t in to volumes it be projects. operating fits Liar by and It first, prioritize And your out financed It’s through there our flows there anything. projects It PT-FI. rights question the doesn’t is PT-FI XXXX. It will in. out our of last bump right relationship cash between something will U.S.

And the drilled government about engaged We’re and is been we explore believe, There’s talking there we knows future opportunities. the what those. we because opportunities for to with although haven’t in Cave Grasberg Block Liar extending who drilling down Deep haven’t and exercises else beyond MLZ Kucing in that. really

United it getting do no is with at on and it, own, Grasberg, Liar the there But we Now, its bigger the Kucing John, doing keeps and ever States. know on you thing about we since bigger bigger. what we’re what that’s in discovered effect

South So, United the financial to we do resources have and the Americas, America. the States -- in

a So, are so with the executable doubling of and... projects dealt are mill the expansion ones capacity, and initially. largest, ones listed we the The and we’ve significant water forth most believe issues is Bagdad straightforward we’ve

Kathleen Quirk

That will Bagdad. -- add moly as John well,

John Tumazos

we But to be clear that’s that’s our It’s is markets at a challenge workers the a these has today’s mines one And situation very mine biggest where remote as in with that getting executable ready just frankly, But It communities as world moly, deal project, in problem, in up, quite live Bagdad. it’s go. and not that would workers’ getting -- Bagdad housing, who are. the workers. complicated.

direction the Freeport and looks said, the depending another through really the oxide, of the El which sulfide be future, it going I Lone understand can like sit how on have. in when in to we’re of ore evaluation As we’ve to maximize organization, what has and opportunity. identified level attack that you there. mines beyond Chino growth is you Morenci, on down a base there’s that those to high-profile the for Star, are Abra government Then big we resource All operation other continue you in. stages be look understanding focused. that, top and this older Obviously, we and have. we at it Sierrita, want mentioned

have pursue company, which unlikely a inside things our smaller all to But growth from that externally. opportunities of approach. very scattergun we’ll just operations it those want makes be You don’t to provide acquiring us

with ends you of top try see it. You can price, and on when very in And you big the to to up a have a you that just a It’s what’s our the resource going large then to and pay investment shareholders put incremental get capital world those, that success we value much in within value from today portfolio. because recover. own the And we with future developing shareholders. somebody goes our not of better these to else’s no all resources have get

Kathleen Quirk

Richard. about your question -- on John, sorry,

Richard Adkerson

ahead. ahead. No, go Go

Kathleen Quirk

recent us was expand question a market conditions, started concentrator excess about like we’ve We time, mine. a years have or will have new to because from operating it going we stripping allow require production do our that. but milling that capacity at Over I there to been anything at campaign doesn’t just do say to Climax. in Climax And of the molybdenum below situation. your capacity

So incremental that’s and attractive. first the costs one are -- our

So, we doing are that.

attractive it’s get got is we’ve -- get I longer It’s long we question that technology -- in term. got said, term the the strategic The a projects Star that Bagdad are focused will major of medium are Richard as will and when. the But And done. expansion project. done. And background. Abra, a mean, on. it a we’re term and It’s leach we believe, ones project lot near-term these a Lone El of that and

view a that But good in give go expansion. going when water is us to to an on some will have investment forward. infrastructure optionality support some this don’t yet and we So,

we an have So, community were operations we enormous and the people have in U.S. and focused we’ve things support. already got where all we base saying our like on established resource these

to So, terms this position going new this as of you as supply. a of look well really good quickly we as copper go to in forward is in we’re what world None can know. need

John Tumazos

trucks as few tons And in confusion as mine that confirm I tripling system Verde lot the just think you Cerro think, the and mishaps follow sewage Could could a were many third conditions... and short-line some bought at there’s I about road. the day rails, on -- don’t have the mill largest one a years that XXX,XXX system I El A you Abra the drinking day and tons more. press mill Freeport Verde? If rail Arequipa, a are of per -- XXX,XXX might a so me, water mine. city ago, your no for to Cerro excuse you with you and have

Kathleen Quirk

Yes.

operating -- around supplies. been XXX,XXX. with at operating we’ve that that, XX%, So, in lower We’ve really Prior the been level. days, been were several we to deal closer to last operating we’ve XXX,XXX just to at XX%

And mill that I’ll have watching supplies. in operations, every Richard limited situation. key terms concerns throughput our And to operate, the day. of with let comment But continuing deal we just we’re the limitations to about so, on we’re community but the and

Richard Adkerson

because I wanted Yes. I’m about to you And the glad on I opening comments. question my asked Peru elaborate what said in

come itself. we tailings community largest helped project the ecology by developing Arequipa. Cerro Arequipa, markedly ever of of And new We our constructed collection treatment building complex in is industry, system. we freshwater away concentrator And of largest the in just that shifted you is The overall we community the a Verde our second I team milling good. the the dam, concentrator not that the that from has the know for got in does with on of years we runs built downstream really in then, our we if were as received XXX,XXX-plus of of is and John dam river, there did per tailings And a and of and river capacity. positive day positively a largest number improved a and be all what think will and been the and And very in there. earthen referring water the of outside as the system relationship that, dams foster one the the a history city for expansion the we And to farmers ago, invested that’s Peru. sea largest. dam mankind, doing wastewater

thing are at nobody steps very going Peru The in Now, day-to-day very disruptions is this predict to use it’s the in government and having The evolution. the and is high. roadblocks this reluctant that, said extreme how situation deal unfold. complicated motions to can with to and point

continue cut to and on with And operate. to could inputs conserve caused back we problems so that to are faced line us we that rates other so the our production

We of of our on those the workers on workers the Most basis city to have of have a house blocked. sometimes Arequipa, in and the roads site. region temporary been ability live

So, we’re prepared it. for

in Cerro make and are towards and Verde I -- us concerns this and like team time the our great the people directed but to wanted these does Our operations. just government issues that against job that things point not managing a the raising COVID like over directed are at with

far, operate. And we’ve to been so continue to able

Operator

the Vertical Please question comes Dudas line next with Research. from of go ahead. Michael Your

Michael Dudas

is guess, that of qualified about I how a talking and it for future, all limiting your miners operators pressure is small move going in factor such. supply? the U.S. secular and a try more labor Is was mines? more that to plans the be also to -- But availability your percentage. in limiting XXXX your -- bit productive volume But a they’re limited on reacts comment much intrigued for more by need to market going industry forward and how getting probably you’re like the I situation signaling the the is to with

Kathleen Quirk

got mining Yes. we And milling COVID, suspended And about also impacts right back on operations started Well, the have some during and now. at the up I’m Morenci. typically in XX,XXX we’ve some did on XXXX. rates, U.S. we have employees speaking X,XXX in during ramping our U.S. U.S. of XX,XXX have currently XXXX, a continued the situation the openings. we order we And something about into And job and that where to

a in about in XXXX do change or situation read been have other continued and marketplace we Indonesia and as with outlook it’s -- sectors, don’t seen competition that’s so And we well. labor, that as in of U.S. it, you’ve somewhat. into very we’ve have our America, caused And to what’s in but for just competitive a lot U.S. us South And turnover and the the

through We in I were we’re believe is and XXXX, case the And the years have experience training, produced why these level go we conducting hiring ago. of again to more, we’re five are and industry, that’s year. now fully workers is so to it the do and what hires if staffed. on that have not progress that And are we we could making this was some training and some new

So, we’re going through that process.

it a implications we’ll see to what the mine -- just labor is think happens. does But ability in to force. have I develop the U.S. some the

changes payrolls U.S. You’re in mining But and starting to is thing, and some this see factor unfolds. a of we’ll that see our output. in how sort it

Richard Adkerson

Yes.

hard mining. theme to I when it’s it’s the is factor. truck a mean, table, a you big COVID a our to hear it, industries. I harder FedEx the went it So, when was broader with many haul work. is I that an drive talk UPS And around Amazon business face council, people or out, to common than truck. business all or mean, relief than funds drive work it’s across And

people compete wages. strong with those. our living we So, pay We

We’re giving to this mines. increases in recreational try facilities, issue Colorado deal in an molybdenum invest our with housing. people substantial year. We with It’s

You can there. imagine what it’s like

start the and and industry, But, meeting nature us because us. our result, like a but And it’s So, would it’s as current mine problems. mining for but only rates not presents the of work industry special production, future we meet, and a a big to strategic just us. for what that issue not for the just them challenge it’s the mining not it’s affects

Kathleen Quirk

leaching been the already we’re not is because has -- pursuing already mined. that labor-intensive, This it’s initiative material

execute to us on. for opportunity real a that’s So,

Richard Adkerson

leaching minimize really tools, and leach places It it analytics up historical world. unbelievable. opens operations amazing. all stacks leaching like the have And it potentially for And -- then Morenci -- data in largest years. what I replace Lone these and has supplements, using if us But it’s to and mean, or existing is heat by enhancing we using operation covers concentrator been leaching Star to opens we the investments. up the

But it’s application beyond for dynamics going So, And down. leaching leach now. with the a it’s It’s about it’s to sites situation industry. development, is success have operations success, team XXX working not with was historical deal just of a Freeport upside of really gas on exciting. oil with something it’s that’s opportunity this It’s like exciting. us. supply to and it. and and targeting pounds the turn that not great we’re great see guys and future excitement own fracking that really And like it a that’s to in But for It’s it really gratifying. the thing own the our company the the we mine

Operator

line the final go Clarksons will Our ahead. Nyttingnes question of Bendik from with Folden come Please Securities.

Bendik Folden Nyttingnes

be in what be [ph] Chile you’d moving direction, the moving sort the comfortable right interesting in like El building forward in see get With [ph] color revision realistically Abra mining, the on expansion? some would to with least at with it to of to

Richard Adkerson

Yes. I me had and conversation at was he a for time I Chile President he’s And and in first earlier. the the explained to him really of when what very can I positive. we chance meet met in APAC long with which Kathleen the presentation appreciate, was had advance his it of to facing, Bangkok,

would and people to was its up, whole talking Congo a country a just benefits different to lot of them example that opportunity very prices it’s the I copper with I At on point, taxes one on point take When was what’s countries commodity financial economy by the places, as always the meet around and successful And people an particularly other and successful. royalties mining. Chile be needs. always and go encouraging through a to built going social balancing so, Chile use in to of situation. when Indonesia, in like world, see And

and number had. that it losing government has is and is reasons, a for situation losing of competitive labor Chile now once -- advantage lost

go social and run programs forth. to investment reality does and that, they economic viability So, of of that in of country with their the these too far then on its a in and of they its facing what platform enhancing so government currency, up terms terms officials end

President positive dealing issues. of has been a with Chile these more and can tone see understands that of that, you there

are We’re not in leader Chile, in the global we business. a copper real although

working had with participate share issues. the globally are our companies other that and we in So, conversations there these on that on the and with we’ve going of experiences government, kinds

The is the low So, now. level of direction a positive current than was it popularity ago. President is year more facing clearly a

company, our a question leaders. so, hard politicians. And political we of certainly to of reality of And based mining a things. you facing our those lived gain it’s trust -- And the work for as the share

you’re things right sensitive If way, issues. you do the their to

deal offering And deals. long-term case. believe advantage we try to take was actually government time a governments because the from sustainable have didn’t -- us the don’t proved every was to You advantage. you away projects, the out chance that’s to walked We’ve take be

complicated And and middle as a you’re -- So it’s be of part of I responsible, win-win a to listen, big business that leader company. and ground your anyone the you’re got stakeholders. representing a to you’ve deal, taking not and a of it’s work advantage find deal for so said,

through. somebody I not of advantage everybody’s that that’s the And You’re because it’s for you. believe reached Chile reasonable take letting compromise interest going will in what is be to that happen.

Kathleen Quirk

well. financial that’s looks appears progressing. -- advances the the the constitutional our and But to constitutional options maintaining process is we reaching this the looking we’re it how also at And package want determination, they’re We’ll water forward moving also if as year. at some in as forward how infrastructure investments. by look move this to be meantime, the with unfolds planning process And

Richard Adkerson

just benefit six September. university investment others the early to And with end We a his us incredibly got two part was We went been see minister and -- you our He to an there, for road of site stakeholders to asked what’s three all August, our am at having much discussions, right… made improved PT-FI. too. you It’s forth. mining trip know, in but we’re by GXX then and -- of last our the Indonesia, a can’t having It’s to accompany in me the I negotiations the multiyear and the for APAC remarkable now how and the BXX all the and just then working and great President ground the of pleased trips did on President without with had job at All success a had that we it’s positive there. happened Kathleen contract so to our I months, visit -- feel where let of -- had we’re Bangkok. telling go over in feeling call the the and rights government altogether I back just this relationship the personally and and the

Operator

over With management that, I will turn the to call for remarks. any closing

Richard Adkerson

All starting we’re follow-up was And you today. you everybody for Thank participating right. available always calls. that. I know for

and arrangements and we’re can really for great You about our with a future. can whoever to quarter to make he David excited like Thank you bring me Kathleen or need we into this, have your or initially It’s participation. call talk to conversation.

Operator

that gentlemen, you concludes joining. and Ladies our today. for Thank for call

may You disconnect. now

Freeport-McMoRan (FCX) 25 Jan 232022 Q4 Earnings call transcript