Freeport-McMoRan (FCX) 23 Apr 212021 Q1 Earnings call transcript

Ladies and gentlemen, thank you for standing by. Welcome to the Freeport-McMoRan First 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] I would now like to turn the conference over to Ms. Chief and President Quirk, Financial Officer. Kathleen ahead, go ma'am. Please

slides and Thank our Freeport-McMoRan the good release results at our everyone you morning, welcome and press conference today's morning. copy to available fcx.com. A on website and this of are call. We released

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

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

results Before press differ to like everyone comments, release to we'd on and materially. our to we of refer language factors included and report materials the certain release to XX-K. the actual on our on press comments begin risk forward-looking remind in described may today's our and annual form presentation include our the We'd everyone that call cautionary like and our statements

leads Administrative development Rick who activities Higgins, Steve financial start our well. On Indonesian with got leads leads results. Mike Molybdenum And our and Coleman, who Chief with commercial business. who Chairman I'll Mark is Officer who and activities. leads who our Johnson Richard project CEO. our And are, the Kendrick, as Adkerson, me Josh our our Americas We’ve Olmsted our leads operations. briefly call operations. our today summarizing

reconciliation million for $X.XX charges per slides and income and to XXXX non-recurring questions. and of $X.XX attributable billion per Roman during charges and through and share depreciation adjusted quarter of and prepared those our We got totaling net EBITDA adjusted on the page pounds our amortization your sales calculations before of quarter EBITDA $XXX the or $XX was our are first XXXX XX Today we of stock have had will We our first release the million take after of reported X. of press interest, common copper $XXX of and million In reported adjusted quarter in estimate. work approximated or share some $XXX remarks or numeral a net then on earnings $X.XX we taxes, we net will detail we income which share million slide deck. $X.XX of net adjusting per

quarter Our of January. line first XXXX our in gold with in production estimate was the in

the from first timing our However, in we had shipments improved second benefited deferral resulted for a in to quarter and we variance pricing. of the In sales. a that certain Indonesia quarter gold

quarter per $X.XX quarter above Our was copper realized price. was price first average price per ounce of gold ago our year the $XX.XX ago realized above substantially the also pound and year

continue focus to cost on position. We maintaining low

pound averaged totaled per of and was Our copper quarter. exceeded cost in consolidated strong during We our flows the first net for net mines million XXX capital quarter. $XXX $XXX average copper flow has and working X.X cash capital generated billion that of million usage of cash spending the which the operating June totaling

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face the more able first exciting quarter such we we've our performance a and achieved uncertainties. review be couldn't over all It's to active to progress Freeport. invigorating I time at particularly here year you be Kathleen. Thanks pleased with special where past

are We we and we're executed operations diligent successfully for have now plans safely. working our Our COVID working future as with growth. remain teams on projects

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on operating our and your and Thank make details some you will questions. financial we comments slide provide matters Starting operating just our activities. on can on Richard XX we and I take additional some then brief

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for impact not PT-FI economic the So is material.

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unchanged. U.S. X.XX are over of estimate and billion just billion pounds guidance of pounds our sales from X.X increased increasing pounds XXX and billion prior incremental sales XXXX XXXX to pounds copper volumes that's increases our the the million reflective We The rest to estimates in of the copper we've are of in X.X by largely

cash while As opportunities additional continuing on to mentioned year. growth an the conduct development of longer We our we're planning. assess slide provided overview net for estimated cost our near-term incremental range Richard XX we unit

we higher prior per in note of estimate average the compared is have of estimate cash increase costs royalties, copper unit portion pound. XXX our You with XXX A associated per and We've the net per higher of will pound that sharing duties updated of change related to $X.XX with large about which now pound. principally reflect from increased higher forecast costs XX%. estimates related to by our to assumptions to pound energy profit in cost oil price our also per copper $X is this

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are to on million our and volumes of incorporates mining capital $X.X basis for provide investments than is consolidated Our forecast event that flow about of shows you cash entered, capacity an XXXX business. we flow billion XX our position Slide exceptional assurance the a that bring and of that acceleration strong in We've a cash previous higher we generation have forward free $XXX exceptional plans. of in financial period generation. a kind an the

see You increased period where slide cash can on has over six our by the of balance time a month in $X billion.

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of policy time financial call it's questions. open assets to forward tick like look and operator designed these right a in plans. boxes Richard we continuing talked now and said Our about to we're echo would exciting an the and our the earlier that We've right the for to what I at staying And at these got closing time say Richard is on just executing Freeport. we on momentum focused all

Ladies begin now and line Emily Please Goldman comes and Our we Instructions] [Operator question from the of first go the Sachs. question answer Chieng ahead. gentlemen with session. will

morning and the here today. update Kathleen. Good for Thanks Richard

and be maybe the on you look when that you can the about amount allocation there's discuss as how of sounds your this color the potential right years point ago that Just and on couple could time growth. sort to capital other of like you to you're certainly prices base not would case side considering copper but or you disciplined growth upcoming the of cash this would trigger to policy current in you at copper mentioned assumptions on sanction sustainable provide to thinking see a pulling significant a the a over were we and you that would start question returns of couple for any prices but if appreciate long-term and I around or need months you being updated next selective of need assume but what

with have an hope we by of of on and to suspended year the pros this are, those we and evaluation evaluation our now the studies all continue a have projects understanding of least to path we forward. we expect end ago through a the of the of cons end projects we've basic clearer purpose the be Emily them. analysis year work So of That able of to resumed year each and of and growth developing the at

it to be will actually the volume any in there some to operations that's and before all about So significant the we resumption from capital pointed commitment Grasberg is of spending time initiate etc. COVID, coming meantime the from then growth

portfolio. high have say of and We of sanction that to prices increasing just with going volumes existing We've won't how would project our advantage take our we're fit ready of strong have these we particular any So want we fit have have be risk of being with managements looked don't projects. at by spent and prices portfolios. yet to you target because a at cash a all scenario they flows amount into limited into that capital new different We of how resources as to price. copper always

it that at does have look individual on don't Freeport really so in. by project basis fit project it interest projects with we we but from we how benefits projects. an the our So operate much the in all fact

to individual from as economic an at much us now So higher. the allows by opposed are and for to go basis. a price prices are projects to levels project basis that these our consistent corporate prospects strategic project approach Certainly these

spend a is for capital. will decide we in the over to years, the spending not multiple that minimum eight to be happen going going project to on that's a when of entire feature just developing time I to industry the money years. anticipate So because we and That's be six near time even frame term

write be to it as about supportive very So be prices. because to copper that's of going that's all you well all of the know going you time Emily

on You prices. new that and add can't into that the turn valve quickly rises can't and demand translates you and to when do mine higher volume supply

just in. one can operational profile a and squeeze of Got the and are like but. any an the of it. looks volumes [indiscernible] quarter ramp little at a maybe comments moved out quick That's and sustainability helpful it Anything sort pieces sales grassroots same, very the bit cave if are Thank block one copper it provide you. I please. grads could on deep [indiscernible] update

Johnson you on. on. Mark to got just We've update want an give Mark

the on what generally the at Grades tracking model plan. we're are well mill. see from Yes we to

we're the Draw more seem rock types has off in advance adjustments In the accelerated in did to five the a mills it's that some advance our ascending. GBC mine Deep which In we the bell in make bit accelerate slides bell little the of that more than slowed cave the fortunate is same. fact We cave PBX. diorite and our the MLZ. draw west challenging some opening opening the shown and recorded the down in probably actually great going we've some are added over rock relatively of and years scarns the it's

helpful. That's Great. Thank you.

to activities of issues do site. all Yes. inventory was there quarter that shipments in fact of had quarter site supportive referenced some advance the forward. really inventory loading, plans There be on on some which nothing inventory from to government that were were all we will the second The sold with our operations. maintenance first able produced to And was is delay the built shipping now administrative going meeting the we so in with and

with Jefferies. the line question Chris Our of next comes LaFemina from

taking morning. for question. Good my thanks Hey,

Good morning.

Peru that the performance there that some was operating So especially South see to while It you escalation how upcoming appear but about be potentially political of Questions the in good about, presidential well America. have run-off. risk COVID to we the in is with despite escalating there as are Richard you? questions

question there? licenses to similar you it where the arbitration to protection nationalize international the to in go that you that you have something related in have a or should Is in taxes increase of you So Peru. terms try Indonesia contracts have trying sniffly provisions first agreement is and what with sort the had same of Is the wrong mine? stability government to

but in we government a agreement absolute the Cerro were challenges of yes aspirations always agreements way copper been forth. since Peru stability the correlation to able still of country that an is stability copper new a critical get we and there so prices Freeport to expanded The business Yes. a the between more is in and workers Verde poverty so and answer before as has of feature that and but as funds terms for rise the faces is of a operations

we investments we So positive but to we know work have selects local with do and do strong community of projects. because political in we've wherever Peru the country relationships the we We water world just made have and step environments. and in rights whatever that some watch unlike that a have to with social governments wastewater operations back in

you a team our I job worried tell great a ago there they, mean So were really can't I about Peru. what just we year is

we we run in temporary good near was lived city if go community Arequipa. real rate workers we got developed community and can just team rates original further been and the Our It we've job... of the targets our issue there's with. to but living forward a to expand remarkably up The spread with our work

for hear. good that. you And Thank That's – very then to

Peru. agreement, stability rate they we are of than agreement, do the in our that taxes terms statutory are In in fixed current actually higher and

to harder employer. So we we've the a and and the with pay communities paid lot get also stability big

the and country. partially share sharing employees more the we And We a do that you cost that with employees, increases and large partially profitable have goes is that's There's to a to why to profit prices. the mine saw there. higher mechanism becomes partly profit

it's country and economics local to workers a and investors. to and So good to the both share model the communities

copper market El respect and for Abra Thanks online is about like nearly I to challenges actually cases, impossible, in It hurdles pretty capacity some you getting might but is bullish if what potential permits. hearing I'm Thank miners other which a companies Chilean of sort we're at can permitting bring spend that just have you? permitting asset. to of terms from wondering, El suppose in Chile, in the seems Abra expansion Great. with

an statement the will have that environmental connection impact file We in project. will with

it So of before process. baseline have a gone comprehensive do We've that is a and very to you work, through permitting lot etc.

a Richard partially six actually why it's permitting But you the project is do that you lot partially there of submit to to is out. saying work is, years eight have before it. So

Okay. Thanks.

to get it's a to Chris, best take the going time environment, And long that permit.

we costs where doesn't face. altitude long of would located. And don't is It in it operation plant expansion fact it's long don't some a best transmitting where that this we that have been cost a issues and near of have. require some face a some the to mines of the have setting a of others it's time and running major but where the But Now, mine. case it's operate we water project. that of challenges others existing Codelco the desalinization the mill a permitting takes big high up A

thanks. Great,

Citi. question Alex comes of from next Our with Hacking line the

morning Alex. Good

Hey Good are morning. how Richard, you?

regarding full answer And and up heading to put the on back how levels question not the that candidates sure Cerro pre-COVID much mining rates, normalize can prices? secondly, following I'm Freeport's been Chris's a leading that's back then on production between or Chino your upside any candidate here there these in Peru. future particularly engagement production yet has does you the at the Verde and there potential industry is polls? footprint Just with footprint but Thanks. at back

second the one take I'll first.

of terms ramp That's ramping in up made Abra decision we've start El in back up. progress. the Just to back the

ramp back had in levels with expect starting significantly. cut We In to back we there mining the rates Same get back Verde. to We're XXXX. U.S. guidance. That's to our pre-COVID those in Cerro reflected the up.

some right Chino, have plan our still at have aren't because at our now we opportunities, opportunities is yet. baked then the XX%. some opportunities Morenci Chino running And at have We that forecast into

potentially at mentioned that, opportunities In incremental have as Lone addition Star. to we we some

our we some will would that leach That Richard the term the that do say applications in So well I plans. aren't to of as we'll technology earlier. in referred U.S. near opportunities some as assessing have be be --

– some So in near term opportunities not but we our a have plans do

is Josh and brief Hey a past for leadership to Officer, a got this a was He's comment make about guy Olmstead energy Chief let our career let's years. long Operating Freeport outstanding doing been just bringing number two he's that. guy and named group. Americas. job He's an Kathleen young Josh in but year our many to be

So couple of Josh comments. a make

Richard. Thanks

with for similar to Morenci, of what most Lone super year bigger technology what we and I with that was end As have and like copper have of piece technology identified about to really plans of as work incremental very think the year copper on working clarity this incremental, could our Kathleen leach advantage out could things. opportunities there Richard's and move for us we looks more value so impact on and but concepts can some low-cost far. exciting on Kathleen take both If much are stockpiles we're we've as to long-term having extract ability meaningful is look out our having Richard contain the we're we scale so touched what incremental of The is working forward stating that we that we prove been that we're goal so Star the to doing comments that get near-term on about a on. some seeing this opportunities able the projects on the it that have began we some today excited by the be the and the significant that that leach haven't potential

Chris. Alex dozen from those in as complicated the a politics to so on right were support Alex minus our Alex and growing half So having point all the each restarts in operations now. world Peru plus or XX% this man everywhere volumes technology approaching polls. runoff Peru they you in we're candidates reaching had more at how traditional

So stays it of was politics. out very complicated. Freeport

and these to work industry with candidates political about support we we prepared will of go both the communicate there by said emerges and and be association and that's Peru. is we mining led in interact and is Peruvians mining notice Peru be making As communities, understand don't, the forward about was working active sure they'll is to who with The affecting engage them of mining an they process. earlier business, whoever now on I with I'm with just aggressive run in our mining being importance as talking mining candidate policies the very comments and candidates you to

all and to what So happens. will see have to that play we'll just of come

Thank very you much.

question comes of Bank from of Your with Timna the next America. Tanners line

guidance about been through I detail? little incremental the what caused you a you and in this Thanks you Obviously fully detail you went bear obviously in ask for where that to costs taking of bit, mean question. do costs. nice encapsulates but little I that seeing rising or you I morning. topic good in think pressure are hey want big a about detail my inflation come is you bit quarter and Hey what could a more are further there, more costs the the future the wanted that a bit can you've in ask to from cost seeing could and little

first earlier. I point the So to make Kathleen referenced point a is want

our correlation. costs even there months. risen inflation. other of profit risen labor in seeing costs cost are recent royalties, have are is are like mean sharing some important important I and Some input cost general an more our costs Then things plans, is certain correlated. correlated into are then that energy are there They're elements is that to with copper element Copper are costs prices. correlated cost but which built and in prices have other energy thankfully Energy costs

costs team So to and really sharing we'll with of rise we to have are are far copper that energy margins, that prices the costs we outside that by strong that. aggressively impact suppliers time but ones can. loyalty we the the our We're do working have supply ones as wherever to and inflation with works a the such great offset costs have biggest group deal profit have goes

because people and COVID on recovery demand creates with to around the the That's with all which pushing spending this being with for realize this copper. consume inflation inequalities. Tim deal about I world who is inflation today it create spending velocity economic So with you're driven money economic that's I I to you right mean I for the know but think what copper. copper world's for mean good doing good is

in these all the company. work to of will sense our broader benefit the So forces

might at Yes. wasn't have been oil time copper last today quarter What's copper four a [$XXX] It been quarter, four interesting a look and was XX. and is barrel. you at a

chain that benefiting we are as correlations and come aren't, some we go to our revise were. forecasts the up as energy where So quarter our every prices from pricing they and even sort quarter have And are just current we reflect review each supply once historical the on lower thing. with a though they correlated through of

baked or forecast we'll that's pricing pressures where based have on see additional contracts to whether the we have is said supplies into from we'll So as goes. that But tightening now right that markets Richard other cost developed freight these currently. And plans. our are what

assumption copper The for incorporated high inflation assuming quality problem, some price well? like also example, higher but bit if of sounds we should as be a we're

But forth. broken about understand. as yes. rise steel is a said, I and line I mean, rise, is the profit sharing bottom that judgment Well record energy, you There's margin answer costs Tim, rise. correlations, I But know make I your and royalties then so you know and

have stayed rise and strong very inflationary copper deteriorate prices margins. Historically other these businesses as many For movements rise. costs margins our

sure, for that's you. clear. Thank Now,

you. Thank

Your comes of line from the Murphy next Barclays. with Matthew question

around the have can risks pace the Hi. question I help on Indonesia the wondering project. smelter of a understand and if the you me

could looking fines and you at government more it and was the press you what you could just comments frustration other your the or there Is way, you're more is do see wondering get expecting? the options it's think and disclosure been discussion going XX-K and there the resolved. about sign in Indonesian some the it'll possible or in see So that from this through

about there let I'm actively is working terms. and negotiating She the parties Kathleen this. the with to going talk

to mine different working are that we are project the Indonesia. prepared reference partner enterprises, recognize group. the Gresik and we initially the with off it our forward with go despite to to views to going with clear or December being XX the and about and whether within different views Energy government defined with [indiscernible] interpreted we state There itself cooperate as this the are government and reasonable and government. There Ministry so development I'm the at When [indiscernible] made decision forward you in of Mines have We smelter environment. that a the and we and owned a and have it. we regulatory prepared the commitment are provided best, made government commitment We direction go honor within are build be the of can very we terms government closely it's started shareholder we where of that Ministry in that what with we're go we if is reasonable what one

ministry and don't why about I and situation Kathleen detail. will you wants this talk push we mine give believe to So that you would Kathleen going resolve some us be this everything's to okay.

smelter approved. export government Okay. the against to a licenses there evaluate and have the regulations they that is month progress the they schedule your annual Under check six and have development then grants

for we from to the potential under a notified schedule. we fine delayed if government what the and this the They us the achieving they the was prevented majeure, that's the there our waive as them regulations, project have the result penalty. schedule. conditions this reasons to is which any explained achieve we force fines why allowed levied from did. of And in that during and don't under that schedule government And pandemic impacted force and As was was XXXX you is you said by will and that a COVID majeure gone regulations

This we for additional new around it's reaching details. ultimately. commitment of the, resolved So a We But a interests, [indiscernible] our that way. schedule. to XXXX. of the with now the resolve government. terms it our do We option had think we're focused get commercial regulations back potentially schedules very reaching our as wouldn't deadline will. of completed with opposition meeting way COVID government's [indiscernible] just smelter, also to said obvious us confident the all sure effected They're COVID but we're in all projects those world on and until asking issue. our we I'm asking that fits working for away that some say they're page much we government just And and a and that we're I that because mean standpoint. can very closely a will that December business to on we're this Richard the we're discussions in we I to having month referring satisfactory aligned expect our it interests and to XX in details. of And for could to partner standpoint the mutually and in through get need same from the support what are working some we more risk construct for government. make XX But that overall them notified with need be the Richards in on

Thanks Kathleen.

the the a the discussion would of of the with government that progress new outcome So schedule? sort be of smelter completion

Yes.

and for You're right. in tied them That's with part that's our of what we're discussing a as discussions new fine. this schedule with the on project administrative

you. Thank Okay.

the question Carlos Alba comes next Morgan line of de Stanley. with from Your

Good morning Richard and Kathleen good morning.

Is we PT-FI you the major on now investment think Just parties bit smelter? more should have stopped third please the and maybe status expand within Are commercial following negotiation back of party for about to in those smelter the the or more would come a still a up outlook this related and anything based do ongoing on on the they little in projects in and call? on there that it's that XXX increase a the or own? series XXXX on you concrete to other increase doing then this CapEx earlier not CapEx of method you on its that it's And just highlight for big about elaborated million projects.

the on Well Yes. --

Let in you prices to good so long value that we're are copper values to term our me these that increase gives were It's Kathleen. items to money largely say plans news Higher last Carlos. right create question. and an incentive the advancing spend

We also That's We've increased Yes. production. brought forward some capital. right. exactly

mining So that's equipment what that was is investments. basically

At had get it agreement of with went the point they're of comment on set extensive and so that terms to back a the there and all an done in of By part in still of publicly we not had quarter. commercial agreement acceptable were party first and of end the third a decision. the to trying in during make projects. been we've a the parallel don't negotiations negotiations other progress. by But March The first got we've target reached the some of moving negotiations forth end we details we and while this March

We are so project party. own we decision can that but to haven't we and solely yet not forward the that finalized greenfield meet our moving obligations a governments on our rely third the

discussions some well. this we're still moving are in at third but with we the as other parallel So the point party one having

soon a you. that all as get me as will we So final and possible soon to decision want convey as we as we believe that

Thank I clear That's you Kathleen. appreciate much and Richard caller. very the and

mine FCX between world FCX. The personally the me of is ground and for partnership the along operates with is years talk when and it's when but were of had we the the we the lead different followed Indonesia Indonesia in we government decisions of some Yes there those say state-owned you and us [indiscernible] Kathleen dealing a Carlos It's the enterprises. ministry from on the who listening these which take to really there the was to a was on I weirdest with FCX negotiations. all by government. we is PT-FI that we partnership in

a environment we're there it's than historically. much and very much better had we team says as aligned a as Now Kathleen it's

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

Hi good morning.

a in there smelter. a Just whether terms some direction assume can't own I is goes? point terms again a the mean have your go to there follow-up I which a date this of point build party. drag forever? of to dead in make At drop you on that on or to you're Is going decision with at third to this whether certainly

duty government's really, If to prepared deal doing we working happen we a could decision. is PT-FI with constraint to government. terms obligations, the get go project supports a debate. with We're prepared and we get, we're government it it's the issues project could forward to go a it's to while keep important sale IUPK think a our to the prepared and it's that through a the not here We're No reasonable we that We're financial to more prepared just deal financial with a were share of that. the with I if it's not other make going and this and with that mean issue if ownership. that and forward that taxes paying and go sitting anything. not XX% in and FCX. dealing management is I big not on environment X% financial doesn't huge we're regulatory The smelter. than mean implications export would it's equity mind relieved implications the are I be significant a government

So --

we soon. to Orest want date a is drop this but But very do There decision make to dead sooner. kind some not we of want make decision

Yes.

to Okay. it's I Thank just ahead Go was you. a Richard. follow-up. say And going

to we and we're can decision it's not the saying going to, government joint do to No be we're got PT-FI. it's I'm like between say going just this, a

agree for given in at depressed is that third to are fair kind they'd it that benchmark copper I the okay. assume in now the or it looking smelter some party so TC see, perhaps that I to right that to stability for levels? for of that order a build Is be higher assume mean TCs to are spot affair

Yes.

Yes.

Okay.

Yes.

state earlier the some in opportunities I year? guidance you just end U.S. growth with brownfield of be did a the hope to to in on correct? hear you and Was point Okay by that some the position that the of a provide the clarification market of

to that as get all That's end mentioned I Josh do our year. you keep mean by we is we're it of transparent know as hope hope. of the our you Kathleen very and we informed. our That's we're clarity mentioned going and some the aspiration. it. company

Great. Thank much. so you

Your the line caption John Tumazos, Independent next question Research. Very of

John. Hey

the Thank much. call my money you. that's you for and Thank morning. raining congrats you very on on taking Good all

we and project come question Just study Is and engineer project to know El the the safe for you Liar likely plan on project permit build following and say which up and each Baghdad of going those you're finance. XXXX the mill as on mill Emily's underground it or Abra later? meticulously to Kucing first are to and and

Yes.

-- Is it

period two. behind would from it other Kucing Yes. are online. that long-term The period could that time sequencing now just in We're quicker it the [Baghdad] Baghdad from our times for so investments for than Abra that capital just lead then standpoint optimizing Liar come that's a and time KL in on will and be we long spent El over come long come could a of plans.

you're eight So the you talking when permitting about XXXX the done now but Baghdad on years with we probably type about seven all on process start. if your everything we permitting talking years you're seven- could all right out if started depend maybe process timeline be

in could I the one Kucing more how recently I recall updated. Liar results XXs and If has ask were that good been that very drilled

you studies So have you've and access those updated information. and have more

Yes.

been it but of of how Grasberg other Kucing KL? and has updated pyrite on and and our been maybe continual We have also about talk working project. how a Liar this comment MLZ John independent Deep we've Mark cave that work is has remember our you'll Mark analysis operations so probably we've black content

Yes. the significant last The a original new alluded was we much revisited to last equivalent was mine was focused I some on copper of the or there over this pyrite the do We we've, plan and pyrite three it we and as slightly The and change is change essentially a but wasn't Richard in portion resource and has the plan years mean lower much to largely diminished become is higher also new our metallurgical and drilling the big so processing. years that grade it equivalent of so the of and it drilling. did leave change mine more KL copper eliminated. problem as some the some couple had work. mill reserve ore required now the body the almost focuses on part higher significant

significantly we areas upside portion in think We initial we in there. and mine So ago the XX% mined new recoveries dropped recoveries gold recoveries reserves management were have up there's XX requirements, of processing, environmental power addition substantially. overall go the over our the the as plan capital gold new far has several this gold that new years the as below plan

some mill plan with of plan. was ore the the So with in KL ramps KL plan. with in GBC part new share the coordination flow but this less it it's is The management up new then the used does that a same and much lot less conveyor parts we thing costs one capital GBC intensive, big a this as go much tie more in. plan, robust that environmental independent mentioned and the Richard is a that relatively unchanged it's system. some ways of We

Thanks Mark.

thanks And yes so John, Mark.

be carry are cons because U.S. our not of plan we're have because the where in very and plan. I land said. So we Americas no we a will and taxes is to low. no fits pros very the of trade-offs in with forward out have doing it's of U.S. tax then time project. we growth fee the Kathleen of own for competing where loss period and royalties project the everything our we looking invest the at our long rates tax It in is each one mean long-term John there we Americas in as and this a the in

we're shareholders. So I to for mean, can royalty value an most economic going decide all after after our we economically is analysis, and where of this add tax, this

it to and was good raining opportunities I just you. see on so money happy

Thanks John.

you. Thank

Long great. winding it's road but

Your comes next question from with of Michael VRP. the line Dudas

morning. Yes, good

will hurdles going to but going helpful more industry Richard understand morning, copper of that going after up a to the require some going long to that license the meet looking demand Freeport. on you you I is and generally, Good work by the term thinking of thoughts is hurdles that's going only much involved But important on operate investment in on be at to analysis of taxes that obviously, add Kathy. significant some and forward? of we the needs be your is have some to is ESG price, to to to how have to more because you returns, need not the have Certainly industry social investment that. etc. for to follow adding tax this get, it to

something just think It's I resources up so point, because are operations. is our Elsewhere resolution common attention today there and to mean, long and our projects. opportunities for only is even separate communities I all it you Arizona in it you that's related. which on made and standpoint favorable I native They're a probably I Rosemont talking specific not at Arizona by picked mining huge it American look And across other has we've devoted projects supported all a growth are those and today. by site That's ESG not to mean development barriers and developments in being there to and from matters groups. beyond view about been and state communities projects. an go and providing have just for ESG we

about the it's to enormous mean see copper [indiscernible] number from, way but this to with where's are groups thing ESG So project focused. that important. at I groups attention barrier you Automobile each are manufacturers and but is referenced go an each focused copper consumer their and it I of so where their the institutional grow. very in have look companies investors That's minerals are you particular from. involved with mark coming coming were it's have provided going why that

an to development. be, it's to it's enormous So going going going a and right now impact on, be issue it's it's to supply be major

-- So

always to a project we of energy, plant our big did Yes. in when energy Verde part we to more less great It's in found today solution that our evaluation manage. is Peru is wastewater been get sources Water a evaluation. treatment renewables. our And We that issue of been looking at diversifying water. built Cerro we part where project it's always but using it's even so a

actually and community. helped in So we uses water other country of compete with the the didn't

the I deal part our scope have the and emissions is of project on used does for have scope community copper this we So that copper project it and we're is Richard part hard three help guess development for always but plans other decarbonisation of is it's great what looking all projects, much capital is story. that actually, something one of areas investment the has to it's and is as always this, actually with. Copper don't part companies been said as and plans. And a growing our used two larger. but ESG how work every really We day just

thoughtful those Thank answers. Appreciate Yes. you.

UBS. comes line Andreas next the Bokkenheuser Your with question from of

Thanks Thank question. you much. taking for very my

just a to further that operational QX. saying actually. sales were gold that also are there comment bit little think quick at the I Can versus Obviously a sales restocking? we higher in a Glasberg Just about delayed question you one get going some two sales. a QX saw production part might you into be bit

of that? kind what So drove

Okay.

earlier me met We concentrate. We we let to we ships. production's but and at copper we production don't various the and recognize we done sell and copper the for is components ready transported for concentrate's what in Grasberg in concentrate address to Grasberg. some loaded So gold and ship, mentioned as I individual our on sales got paid gold the port so reasons shipments the to happened get targets, LME this when delayed got be at site prices that sell the copper It's it. copper

second those we all timing just first literally quarter be and operations like that. So it's simple and going have of quarter sales the issues is have our throughout to that some are in [indiscernible] we

ends who first it's a timing so being strictly the it's shallow second the the early whether can a the follow water quarter you at weather conditions conditions part all Grasberg shipments but port. of those up we quarter irrelevant. this have weather and of at For the or last It's sea delay will of

Okay.

sales the sales Generally we did Richard said some production have and Yes. some in in both did that's our production equals U.S. but and timing. changes we Indonesia like and just our between have

everything not we can produce. imagine sell As you That's issue. we can an

up normal volume of a any nature global pressure your the follow-up COVID question Peru, are that mentioning early you've uh output Absolutely. sort there you next been into or you portfolios that are be That's any year there very next of in year? feeling expect of could clear where restrictions to kind a ramp that of and obviously going return mines anything and of a other the kind now to of right of the bit expect

in relatively rates mine the to suspended in we with and production that'll of but resuming Morenci Mark some Well, restore we conserve just remarkable but done targets at time build there. thing managing the nothing face very it's in We stripping and cost we'd that we restart done real COVID all continue operations is take and have to a we meeting of Grasberg The at and mine team New location up Chino there to. we've at reduced mine remarkable actually his mentioned challenging job guys should our Mexico rate the small from significance. amazing will operations and there

Yes. I'd of all say logistically with currently terms etc. over biggest the it dealing we're but constraints have in where in protocols, South America we still is

operate in impacted careful we're So be the we're it's the people mainly safe up of logistical South things terms sure about how and to make side not continuing are letting we America. of very but guard

Okay.

an able with get build and to treat Sorry. years Internal dealing them fabulous work director. back helping for been in We that's SOS they've testing ongoing for facilities international infected work medical and them to us and with process. facilities people. We're

clear. That's Okay.

up happens expected the the XXXX. kind Is and America the of the of that in half ramp South for rate you're So is about second plan run back way right it? at early then full in thinking

able very we'll XXXX Chile now a to quarter this the long the operation low, In and Well, to great rate go was balance The in at at America plan assumption in the the that in but and plan but there happen and we but then the a to restrictions lower South and year our expectations slightly our starting are we're XXXX. we largest and increase for and assume will we going is stacking that reduced job assumption. of impact but something to metal plan situation of our surpass that beginning the still operation significant. to rates smaller year. XXXX not the in now. in the be is the that That's back team balance mining rate is it's is so but all be the in assess at this run specifically Peru is we'll first did fact as in our because in to it's right Verde which go feel prudent are Cerro

much. Okay. That's very clear. very you Thank

Thank you.

the comes Lucas Your Securities. Pipes B. with next from question of line Riley

well. you outlooks any seen what retaining look you've pre-production Richard about Thank questions one at Could on producing as time would views have the back Morning versus the to have more wanted along your to be could answered you for so spend to or capital growth then regarding copper review? this Richard. much call of my what my that be but taking talking framework towards being this that light thanks -- much. very if and I question very we of best could We you to side could for updated there think from the about looking returning make geography thought on sense? incentive growth organic vein example. as lot would Most ratio miners evolved capital this and a toggle Kathleen appreciate so same M&A and comments you the of that well. an for be markets extent the and circle of asked in of some when subject earlier been to made this

That's a good very multi-layered question.

going long now look precisely. commodity rise correlated new see of and The based strong Let I me pointing there's is of up era you is China all copper economy will and demand. at it cycles. three and develop GDP strong. the to to complicated emerged been absolute it. driven rate when would to it it all two come eras kind continue was on flat. if been can amount copper has it's all around most and GDP. by today some has exciting pivots of be even decades amount grows almost see falling is for and time is fall of rate Copper's have and people volumes drop of inevitably of growth demand that this so with of fall. the which that's so grown has I business for I've demand the answer rest The but Pre-early consumers to dominated that XXXXs even It's COVID for to absolute its new time China countries kind China's though absolute growth which because economy world's exports copper kind its it as it growth. been from a of

my the money I'm in world then conditions in Now everybody to the demand developed COVID to here the energy, aspirations have growth requires is about the always copper. this going the this also set communication, a in clearly recognized and to substandard do to copper of towards broader movement transportation, it in world, world excited it's now so world incoming got new you've to we all the numbers around been which that's of States living global now story's more around having that that you recovered long-term of are but people vast inequality got more undeveloped push create consumption. All the better reason all enhance see United people conditions move more and

to era side I don't. positive keep side really new why it. say I demand literally know and So and in don't it's to supply it's how me that's going I a is the up the with

overnight. we at the of all could have these Freeport double Here of projects copper price

a production of number people it about of add new Some talk overnight significance couldn't and for but anyway years. doubling we

there's why after where all calamity became meet has that all about some we Kathleen it's to it time of see prices fruition. so have Scrap see referenced recall to to clearly to and to just copper have years so global demand much substantially. that's it's been thrilled but great Substitution later company So so XXXX-XXXX this going through seems to me to I I'm just be to when a unless Tamazo's how has occur. rise I I really working grow I interesting CEO prices and I on but we and to put now mean to together. these it coming in developed here it John focusing strategy are this

so. helpful Very

terms really we monitor within the assets. question of in the options what's what we're got focused externally development And compare on M&A have. existing against portfolio. We our and We've available always that

me Let that. a on observation personal add just

companies Our made strategic they mistake, company mining a misstep missteps forced for M&A reasons. other made when

You just look again. over and over

strategic about came to buying side do South wasn't to a talked it. opportunity. We us us. It an had as with them plan

time us we have first but us. where positioned of if of strategy in -- we an is markets us opportunity comes now we long-long to no time engaging the in are to will now M&A for be So to come a advantage to take

straightforward; to is us our going resources to comes it that not in growth, in If create we're value. strategy objective. Our disciplined strategic way something but consider in a that execute, a that's to invest our be position provide

barrier pay to operations make other been we where have got You to our trouble. economics resources into in and the being those these of it When those mentioned to a is work created value have no value our all us we get It's to big but time share been come the them portfolio in there you've the price. that's because to startup all already. given

level and see our smaller long get company economically at been a for we of real barrier minds So that's some might work making a even what interesting Freeport be projects get in minds bigger smaller. big had we've and saying

a tough issue. that's also So

and Kathleen Richard, continued color luck. for you the best of very thank much

line Jatinder with Paribas. Goel Your next question comes Exane BNP the from of

you Good taking morning and good for the afternoon. Thank question.

for week committed scale smelter. to multi-parties? Just get align and have that signed to MoU one with last news well with West there you in To The or doesn't were is that's might said raw one seen or release more article with clarity of smelters. the Papua which material it reason where asking that Indonesia has XXX,XXX people a to media full a as are you have tons bit a ENFI on engaging of seem the smelter are outsourcing on party potentially only

elements one it. smelter Thank if you. multiple party looking one sure at there not are or to So you're just

focused referring today have and familiar developer are with the to extensive that be Gresik. on has or on but may project Yes. The potential if now able been Papua and The with are project we there [indiscernible] there project our this at supply, is you're capacity option excess our right discussions either most at to [indiscernible] that in we focused supply are base the indicated options is project the

Papua In comment response to the no your we've project. for supply made commitment on

there the infrastructure smelter but have investment community made For cost, the years Papua impracticable local in help the we infrastructure, would have it liked for timing that developed the would to the we, infrastructure absence be past. in to because have it required of desirable seen would be a

clear. very much. you That's Thank so

question final line with of from Our will Brian MacArthur occur the James. Raymond

today? Good how you morning. Hi are

Brian. Hi

bit to like comment does after little go KL and finally as years because like closer it talk I'd per changed. but the a John's about it's has sound getting back project

little the bit to try you gold. grams it's understand just So this point at I and because grades tonne copper a per want X.X look and grade of whatever X.X when the reserve

So little a the than it's of more gold some others.

my talked new plan ore you Is is you of So which guess which the first in about start the question areas body. there I an this grade helps higher area certain that's new is CapEx good the talk saves obviously equivalency. copper probably sounds lower good, but which second is plan economics easier is and like then it about which technically my question you

just trying equivalency and depends is I'm assumptions on secondary that to obviously So figure too. copper much lower out how that price that

[indiscernible] So pretty good. I'm trying to

Yes.

more the block that KL the redesigned with Mark will there We reduce of the intensity and that we a We starts mine to we management lowest what modified the in will order Glasberg tell mill, the more it pyrite the about let sections the cave down. required is environmental on it pyrite but mine over did in going is you capital the thing plan capital to because and section development. there get recovery focus time with and to same talk Mark the is

very some of mentioned ore. has in You but it a the low the X.X recovery

standpoint optimal but up we similar higher have because got the what a that more CapEx ending metal So from actually here reduces you've modestly and you're developed changes metal with is recoveries. upfront a plan ore total

want So add Mark you to –

to turn to we've it's minimize plan not but and It's avoid section. that designed mine Mark new pyrite will complicated. a we Just the

all mill there reduced of and have storage mill to So and a benefits going down for economic you low pipeline lowlands these plus that than we be engineering out design there you've a been the doing so which investments determination Mark gets else. the it's pipeline pyrite by more of -- was and Mark? to anything a from

a reserves. I material to was we've where advance was the body the also up contract that understanding necessarily debt the where and think the would after in with XXXX be government not not if And but major investment if the having grade in goes Yes. for deferred that highest capital ore highest value for the our the not

done Kathleen reserve MLZ, challenges new bigger half [MOD mill, forward. and we've grind Richard the a substitute it this value where there's reserve fault of old with much part then came separately. that power centered of mentioned old for now additional and ore the store able another was to value it the we've in with brought what segregate ore So in the is to is that pyrite ADA] which is about on the deferred a we're years we've it with much of to been it for reserve This the us grades to this as had finer. be hosted plan and the higher we half that were and had we some new the That from requirements and then overlaps manage milled mining similar Deep but old what highest the would ore. very very lower to DOZ, sediment There

of more that value copper purely So all grade substitute value than a the the rather costs a by are it the recognizing some and gold looking combination of with that's with associated equivalent copper copper higher and date mine after of the more later other came beyond we a to on up opportunity this the go a with had we XXXX. with material if sequencing at mine much opportunity the optimal equivalency, to on

And and recoveries. we're more now gold enhance plan it's some to to reduced more right doing risk, to robust continue try things those

to you going I rate offset is too still And have Does mining the it and the figured what same at it can higher you that tons right? the original rate because can sort offset think forget I was still KL you actually plan there? with mill new or go of this it through rate you XXX,XXX capacity in

that to tons we'll very that does at fashion. what value ore just it balancing but all optimal marginally bodies fill space. it's tonnage so there first is opportunity bit would we're and planning a this the XX,XXX we had best to a as It's bit capacity do because highest rates of so and the a a and that later drop the before we we of have fill district-wide start plan XXX,XXX sequence little similar. above less GBC peak mill similar of little an getting is the SAG-X a day ramps MLZ mining tons the for to obviously Deep It's mill the the up in a with that mill This material would start off with

was That's Great. project this it maybe I thought when like very guess. very we certainly than profit at more capital Thank looked adjusted of risk first much XX helpful it's sounds you much. and years it a intensity ago

that's correct. right. Exactly Yes,

much. very you Thank

Brian. Thanks

Now to closing I'll turn the for management remarks. any call over

day to XXX,XXX go our you operation. just I'll a with and progress in as Thank this to from for much being continuing years. you. Thank look report our call forward it tons that. year so we underground leave on and following forward we the

and gentlemen participation for call that today. Thank disconnect. you concludes and you your Ladies for may our now