Freeport-McMoRan (FCX) 22 Jul 212021 Q2 Earnings call transcript

Ladies and gentlemen, thank you for standing by. Welcome to the Freeport-McMoRan Second Quarter Conference Call. At this time all participants are in a listen-only mode. [Operator Instructions] I would now like to turn the conference over to Ms. Kathleen Quirk, President and Chief Financial Officer. ma’am. ahead, go Please

are good call. welcome this FCX of and a and fcx.com. website second morning, the quarter copy slides release press conference released today’s on morning, you, our to at and Freeport-McMoRan and available Thank results earlier

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

invited on been listen investors, the the later financial call, In a to today. addition to and has today’s analysts 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 filings. materials the certain release to the actual our in press comments begin risk forward-looking remind in described may today’s and SEC presentation include our the I’d everyone that call cautionary like and our statements,

call with our Chief On our outlook you. I’ll provided Rick Johnson, leads our our and Josh who the our been Steve for Indonesia; Mike our the and Chief Officer Chief results, Kendrick, Coleman, construction Mark me Olmsted, and business; projects; Americas; slide Adkerson, growth the briefly have Chief our start Administrative leads presentation Officer Officer; Operating that for to Executive today molybdenum Richard summarizing then turn and Higgins, Operating Richard who the review Chairman to who’ll Officer. we’ll by materials and financial our call over

income Roman per of $X.XX billion, quarter reported to That million share, share. share. to for remarks or questions. As attributable per or attributable release. $XX numeral $X.XX common the net Adjusted FCX or $X.XX page up totaling per charges of totaled stock stock income billion our net $X.XX press seven net on our detailed $X.XX call usual after common XXXX second we’ll open included Today,

gold of XXXX of XXX had you strong the reconciliation materials. Our EBITDA approximately our for find ounces second a our adjusted totaled X% slide of relative XXX,XXX lower above copper quarter quarter. were lower of of of estimates, Indonesia. second sales copper and timing were can to XX And the year X% But We $X.X for primarily and ago EBITDA recent sales million pounds, for our sales Page shipments reflecting deck billion. the our from gold our on significantly quarter, a calculations

prior with Our annual estimates. is guidance consistent our

the benefited strong second results Our quarter from in pricing.

higher of $X.XX a Our second year than quarter XX% ago was a quarterly realized copper price pound average average.

at Operating was our billion working agreement labor $X.X during the And strong, totaling exceeded quarter. expenditures of estimate million Cerro significantly capital the costs billion with extremely but that cash into of a four-year copper unit slightly net Our primarily on nonrecurring $X.XX generation going above with cash during included quarter. quarter, charges the our our $X.XX of $X.X per of flow cash in quarter new per Verde. to $XXX flows the pound operating of capital associated pound, related second sources. average That

of Our billion we’ll debt Net and of materials slide turn of our Richard the $X.X and of schedule. the debt call be targeted the our reviewing that we have equivalents provided. been at consolidated ahead, over Richard. level to I’d cash was like and end billion months net achieved $X.X now end June. at ahead our several totaled at Go the debt June, $X.X to the quarter billion consolidated totaled end and cash the

Thank you, everybody joining Kathleen. Thanks, for us.

performances of with an we’re of for our positive We enthusiastic all opportunity all ourselves it. really people our us company. possible. strong to what’s are And are business, about becoming of to really outlook now Hoping encourage this and string and staying advantage pleased reporting great to working really this around globally healthy us operating those our a full you protect opportunity through whenever we’re to take Vaccinations for giving this are hard pandemic.

remained working COVID with been have We protocols teams Our our so effective. diligent that are safely.

cases With the that and safe. efforts, we recent are had keep protocols rise – our refocusing, in had we globally loosened to some restoring our redoubling listed we community team

an We’ve demonstrate in Our pricing We Kathleen results been our of quarter or beat sales issue, products. for met strong logistics our if plans, would have everything the execution been to ship we targets. and basically we’ve able able the slightly produced. our we to production second is really favorable targets. shipping issue strong globally, mentioned – really exceeded our

both also the a the we shipping, proceeding mining even our production. important industry. guidance. affecting on real had a with Without Grasberg those our one-off some industry would and is remarkable, underground mining previous common Really and is success beat We This historic for type on had say our I company strong a ramp-up schedule. would have issues and

in outstanding our production team Our work Americas, for Production, low values copper U.S. the in the this is in sustainable, is for value doing building we’re is and and cost future. money making prices, Indonesia increasing. long-term the remarkable shareholders in

Our Arizona exciting. Lone Star in Eastern is really project

about a in encouraged in of our personally In curtailed U.S. We I’m series growth ago. ongoing have are opportunities have really pandemic, teams we’re that navigating the of year U.S., Chile, us, in value enhancing and a future we restoring production in the America, effectively, front Peru South the and

work outstanding made for financial results We and years. achieved many we’ve have hard possible investments making been the by these

in the We’re now which will cash generating flows, for significant sustainable be years future.

debt. to we the We earlier this $X targeted That’s year. our of debt cash had remarkable year ago. we quarter billion our just were notable a net like with of where billion. within forecast by year. over our just we months spending. the XX% several it’s the of Kathleen past range, alone, mentioned, that debt We said we $X target, and reached ended than capital reduced billion quarter considering This flow That’s earlier $X after $X.X

financial allocation cash increasing this accordance adopted the We’re that returns a earlier to to now policy with shareholders. and by board shift positioned year, we priorities that our our disclose to market in capital

in As we our with been us cash returns, our sheet of X, future. Slide company make will our to our long-term shareholder grade This investing initiatives. company’s balance and while of we’re business. investments for talks to tradition maintain how this for increasing allow attention credit sustainability policy always company. about providing and future high a metrics, and growth our to resources strong discipline significant has devoting And key

committed to are principles We of ICMM. the sustainability

is certified. International developed all lead about infrastructure UN’s This a the for production clean to innovative We’re our with Majority generating which transmitting Association key X our with and also into aspect from quarter, critical economy. of goals new by and copper energy a ensure in Mark, In with copper responsible Copper the to low-carbon and future development of to talks the industry Slide goals. is is operations the achieving Copper building submitted manner. operations we just Today, production second to and sustainability every relatively higher to consistent significantly certify robust five in of simply goes is of product industry global safe, ranges supported moving this framework six we copper. positioned electricity, now sites environmentally electric to society to will sound, electrification, partnerships critical It which to future over framework. the and communities and by benefit essential from from green copper demand. now maintaining a additional long-standing global This is copper. we’ve copper initiative, to we’ve this value economy. just beginning solar with this demand produced Freeport unfold. committed And to operating sites leading through a solidly copper earned the wind for producer as delivered transition Responsible our trust, add vehicles validate to of and as all years we is

aggressive the addition, the signals, is to are problem. developed is is And even countries demand around constrained and strong by policies. face copper copper recovery important that’s of companies In higher China’s economic that being in strong, beyond sector now China alone in chip mixed from is remains and an demand even generated This with the there’s important copper automobiles, with China. being demand consumption around of it’s in world. a creating this economic now but near-term for monetary fiscal responding world consumption COVID which

to our is copper, long-term nature of at our and growth word supplies structural is Freeport made So incremental infrastructure fight that any demand challenged, copper conviction new maintaining years say important emerging outlook. it. favorable our this strategy major using markets support in impending outlook much positive from sentiment and efforts compelling. the pricing a There and China, for or positive supplies we’ve as expanding investments Slide prices copper. copper, and supply health and and this decision for initiatives This demand through underscores positive viruses that through of global our future increasingly This team. technology expanding to a outlook copper pricing growth in global required compelling artificial the beyond way less on which the influence just demand, challenges Demand of connectivity outside always inevitable, our supporting But prices. assets, growing very is – that about is facts focus rising to pullback indisputable in from fundamental communications, copper much the talks time. deficit favorable and and scarcity also growth the copper. large intelligence applications, be we would point from any ago, copper other advances its fundamentals, demand to improve support outlook global because enthusiastic long-term and altered point I growing not to are actions will an growing seen, recent of supply is higher understated makes of infections. our short-term for in about for X really Copper maintaining

over We’ve XXXX quarters – margins had let’s Slide value projected behind XXXX. us. increase growing are future. to this The achieve these in XX% growth XX% levels. large By Our XXXX in company would further volumes strong of copper impossible these largely higher undeveloped to more the With volume world capital you’ve to assets forward highlights our flows. over today’s our resources, gold experience, allow risk to cash recent as the that us volumes embedded market and and these valuable extremely from of low-risk portfolio to our replicate will to these in growth highly not in production, be assets. industry-leading of valuable not assets, will from market growing some difficult are in benefit come has motivated business depth industry unique team assets quality Brownfield, copper rare, emerging develops our XXXX, meaningful continue. and volumes is Portfolio growth execution and fundamentals. are high Then XX%, will looking a XX% all see growth copper seen X year

Our ranging the volumes had a low $X.X expenditures annual incremental generate $XX would pound to the for range and prices margins, per billion with in copper billion of XXXX for of will $X We EBITDA $XX with XXXX for $X We costs. expand of year. billion in capital copper. to

work him on we our face sales, end a full target annualized in second metal will just with executed by the back, underground highlights the in past our on his doing just were with Mark has really and exciting three in challenging really met environment. achieved they years, Slide operating for dealing even this run in an risk we’re and Looking overhang with team the track XX% levels, under met COVID. for of X Grasberg rates of making I’ve related execution these been Indonesia, overhanging in Indonesia metal development, production team fabulous fabulous back we all rates risks to reach progress company. debt job to In we of a there done – in face we’re underground great just and the We our physical have congratulated Freeport mitigated a gratifying was year our well the And for that you it’s Johnson for look designed company. and of Political the Indonesia time major the protocols. with pandemic risks always over ramp-up. quarter,

with We’re dealing upturn Indonesia in in weeks. this in new cases recent

to We’re mitigate to restrictions the other in spread. our support government local We’ve helping community. the implemented travel

to by our Number and encouraged site vaccines. our received of Indonesia. already workers availability vaccines have increasing vaccines number in in We’re at the of seen general significant job

year have and to all in second nearby We communities to our respond the half workforce of vaccines to goal supporting providing COVID. their efforts of a the we’re and

in are over mine a they XX shareholders years, have began in aligned. government by working tax by support COVID success open do. for in community gratified We of in all We and our personally months together in able U.S. I’ve dealing ago multiple XX the shareholder shows ago just and the path mining increasingly options real look Since success XX Planning support especially XXXXs, remarkable a portfolio, strong investing the low-cost, us investing and is continuing with we experiencing a low-risk of we where over that forward were I’m real district way. began transition operate, positive long been the Freeport. sustainable and growth with we’ve the favorable proud working Brownfield a what long-term the opportunities the underground production. encouraged Grasberg building across with years board this team’s from in began the history now across been accomplishments. for Indonesia, and world-class our by for pit favorable that have all values this PT-FI on from in responsible X global partnership transition years, historic Slide situation, and the XX state-owned the now working with to where we high-volume and to in of

above technology mines operation Star, expanding historical our support other new situated our Arizona. The our exciting We’re newest and mine, to from sites have community Star new There Southeast from Lone adjacent we this Bagdad, strong in production capacity. have leach mine long-standing Lone operations. in recovery we operations and performing opportunities design our involving

Lone of We’re evaluating oxide ores. Star’s expansions

in lot be a normally stripping of would money what making actually operations. We’re

We’re in conducting development oxide resource world-class that cover the lies planning area. potentially beneath mining sulfide range for a long historical this of our

new portfolio we which global year. provides finish technology, constructing a next about in project pumped substantial opportunity a added double I with growth our leaching We for to have production an resources. What the expect and Arizona. of strong forward our likelihood mine in concentrating Bagdad moving opportunities Emerging this am Northwest across

operation mine along require expansion, lead investment likely, We’re would with evaluating but where expansion attract major Chile, El partnered we’re attractive Abra El large, but future of in capital is project not expansion Abra now. opportunity CODELCO. This time, that significant it’s

more currently until have clarity Chile. deferring issues this investment on decision Government the project by consideration We’re in we about under mining the policy

We’re resources by of that using the underground the large also PT-FI. have Grasberg called Liar district, block operated deposit evaluating already This copper Kucing gold mine infrastructure development we an in place. involves the cave in substantial

project a track record, team Johnson long better his capital up Mark development day. per expertise, operation a intensive, plans has it’s cave come about have tons revised We and it’d with that less large XX,XXX block be make economics the with

big, our X And billion plans. fits real gold. ounces plus copper resource, that’s with of it So of tons million right in X

have sustainability our energy investing We projects opportunities and to to copper, to clean, additional support other renewable our communities. invest operations our develop reduction, goals, carbon in including for

Copper Bottom and processing line, we’re exciting type Atlantic capital our to electronic of disciplined recover at an investments. the in devoting for new facilities be to to plans going advancing We’re ESG recycling metals devices from project Spain.

be value-added to by going focused long We’re live supported projects on reserves.

long record have in developing track We projects. of success a

from and We XX,XXX and tons rate to the have a to million invest. a relationship pounds to capacity Original basis million opportunities meeting, this, expectation. yield Slide the Lone positive operate established XXX have this XX now Star sustained take we outs exceeded of communities day goes a shows was reaching XX,XXX copper, pounds copper. targeted day, we plan where XXX of license exceeding we’re of we back on do tons to support have

company. a our more design. copper, original use is would XX% cornerstone term; equipment, Lone or [ph] XXX more current than The we here become asset a small have further resource our longer pounds opportunity mining in is though than that increment our relatively times a major XX a investment more product at we of Looking involve reserve. tankhouses, Star for Potential for

mine. resource, undermine earlier from mined this these to reference potentially I this to talks gaining massive long-term we for sulfide access asset that’s As XX copper our about keystone already company. technology, leaching ores, gaining material we’re additional Slide made oxide

We’re progressing this.

exciting opportunity to and of lots with It’s footprint. low apply. cost have have new a We low-carbon incremental an potentially opportunity

capture range We’re and existing a studies externally in multiple from of to engaged using this internally technologies stockpiles. value different

billion with mines. our with these what’s is a applying of copper opportunities. is estimate data operating of analytics we XX are Morenci in portion as and This material on Our already And XX% significant in new going if material mine, capital mine for help in understand having variable pounds can is now XX% be major performance largest this intelligence mine these been now costs. just recover would in A America, it stockpiles. us artificial to that’s North we a like flagship leaching to where

Our values historically technology. with the team years SX/EW venue ago substantial unlocking instrumental was in

governments opportunity. this using communities taking established We’ve now leaching mine metallurgist, the in and importantly, the together really Indonesia respect trust and technical we and working U.S., business of to workers, operating the strong data this more America the We’re focused experts, XX, to financial on our suppliers, scientists, markets, by it. South functional we advantage modern take customers, technology full analysts, host Slide to franchises next geologists, where a all level planners, of operate. and of team gained our cross approaches exciting have partners,

close We around people scale projects capabilities positive the Freeport new their outlook, of is on resilience, gratifying. I’m operating XX dedication, spirit recognizing cooperative have Slide the just significant manner. undertake large efficient responsible, to development, All Freeport. expertise. to project and by all commitment, Team globe has going

has sustainable meet, more exceed future high to and a is team capabilities of for role our stakeholders. own the everyone. we’re and expectations about of our play those passionate Our to drive level Freeport Team and to the going achieving continue better

a a exceptional results. business, that responsibly, and challenges, our of in opportunities, the reliably team, relentlessly. futures we’re with embracing to charging by reported our challenge great our about the turn living financial call talk great, We’re you over opportunity ahead and to the meeting back I’ll time for our Kathleen,

start then making Okay, financials going to it questions. we’re progress great. matters Slide through open Thank on Richard. some I’m And about operating Star. and make – Richard up talked our on And for and you, comments our great go Lone manner XX. brief the at we’ll just

Bagdad, by to which tankhouse mining a had potential been XX our beyond tons the at looking ramping and increase has now quarter, of to a year very to up with sustaining day, which per of way, to that relatively XXX,XXX on copper, increments focused the XXX,XXX milling year pounds last in from XXX mine year, XXXX. attractive We’re of and small keep capacity rates XXXX We the investments. at Morenci was also tons day full some that million Richard the and idled costs. end capacity a We’ve second our hope reduce per a to studies XXX,XXX last of be tons double project and to going are our project averaged position of also restart plans there, At on about Morenci, mentioned reach advanced to this day we’re commence of capacity there next rates, year. advancing to qualify started the to in per we’ve in and material a months. also curtailed

production. these more Now result with copper in the profitable improvement actions in prices,

teams our encouraged through to pre-pandemic production low at opportunity work restore cost America, South to to initiatives. are very by technology Morenci add also levels. continuing to the In production Leach We’re the

the been to And restoration recent capacity XX% at about we’ve mill in of months. We target running XXXX. in Verde full a at Cerro continue

that four-year exploration August Verde our our of of press agreement at in new was during a up year. end is a That with the of labor the reached quarter. percentage labor seen agreement second coming the advance which workforce in Cerro You’ve release this the significant team of

of very production restoring At now satisfactory with with curtailed agreement Chile, a in last employees. our the We’re pleased mutually year. we’re Abra and the of conclude to El were win-win outcome way agreement to levels on well balance the that working

pad pads This production and to material year capital the XXX We’re several to we the but the of always allows about plan, to a conservation the is the last capital that of in moving per increasing rates. El add on pounds rate was years. as higher our increase million out leach to part that forward new was accommodate stalking part next deferred rolled last April XXX plans of This basis for on a to Abra annum year. million sustained of pounds leach

opportunities for a there. assess As expansion we major

continuing flows. deliver about As talked Richard Grasberg, to generating results cash strong and we’re

day As earlier issues end, successfully carry. levels and volumes quarter, quarter XXX,XXX records With -term second you normally recall, Grasberg to short expect This we inventory during from Cave a concentrate per performance able our at sales Grasberg maintenance and ramp-up Block Grasberg for started we was the a the second work really Block weather the at in a our second commissioned you’ve more sufficient inventory some to half below during and the of significantly the be we the downtime quarter that’ll a were the achieved strong at this quarter. down timing Cave than issue port, in provide We to tons production our quarter. and is estimates the seen at year. the crusher capacity

of of our that’s in the the circuit higher part highly attractive. to throughput. project opportunity of the installation been of higher the will mill there, advance new also increase to us identified phases We’ve moving an rates support and that a invest economics third allow in mill recoveries gold through achievement SAG plan mill also initial and Indonesia to the production We’re of when to copper our this are

improve global energy with of cost efficiency to extend and the Our remains also efficiency, technology. lives use on team practices management maintenance and projects focused equipment

had freight in experienced principally a dollar. increases price And and lesser offsetting increases We price of increased some of and The months. increases impact to of the this weaker degree consumables U.S. increase had, in the on extent items year costs recent a costs increases, these prices costs. offset energy significant rate acid in versus We’ve have from steel costs in molybdenum we’ve been exchange have America by benefits partially South the sulfuric those our very agreed our inflation these plans in that commitments in XX, for nice who the plans to on cost meet talk hedge concentrate. for On smelter. Indonesian X per processing of we the We to provided Indonesia construct new seen in commitments on with the Slide year government certain the to slide, to meet a we’ve items. XXXX facility we copper country provide an in tons to update of of release million

are past. been additional Japanese these of rates advancing planning EPC obligation. with can with these of is show fund our After been estimated smelter We obtained on the expand to the entered Slide expanded And PT facility financing, for the the have construct ton bank responsible Greenfield timely of million East in over plans to to alternatives which the that into three-year expanding Smelting. of to debt attractive Smelting in at projects is balance on expenditures. the as the on completed a We discussions considering facilities new credit fulfill X.X we’re PT our activities. expenditures and to operating project very financial as completing recently at partners with concluded option $X new there. best And we’ve several focused existing commitment, near and recently long-term the period, facility, XX% facility advance existing the construct this for to a We are that possible. Chiyoda various continue which XX a would has efficiently the timing the We now at of and a a an contract FCX portion graph efficiently benefits as in for these billion be Smelter there roughly Java right, PT-FI the

show by financing be These smelter, bottom the As is we cost currently of of with the are essentially we’re for would indicated Slide the export in smelter, offset that the duties, out provides would the offset for as outlook paying. long-term guidance. a economic previous material a graph consistent be X% not shows XX, lower of of a the duty. which which phase the XX, on volumes. our you expected Slide the cost And three-year impact

development We’re conducting near-term pursue incremental and longer continuing our to planning. range growth opportunities additional

with significantly include generating our this $XX per spending, cash the ranging and in XX, significance holding, cash billion above assumptions. would XX, at billion capital to using Moving flows and flow and significant estimates year $X cost show and molybdenum from flat to is gold molybdenum. per But trend of operating over you $X.X quarter $XX.X would very in annum be at billion at capital of on gold billion $X these at continue our per graphs pound of for projected $X.X of Slide to flows On and here cash expected we and copper, on $X the its these range see taxes $X,XXX copper free and we’re volumes Slide and billion generate and $XX net average these of $X per holding we of and $XX annum to copper we interest XXXX to in EBITDA generation XXXX. prices price Is flow XXXX ounce using cash demonstrated the the this second $X billion

into we’ve this Indonesia mill As growth entered see backward you’ll billion pad Star future attractive XX, XX is in that note, to last free debt We’ve growing and to is and on looking, the related the generation of in by construction that we addition XXXX from related. reduced $X shifted and second period about timing strong outstanding alone. Slide months, some quarter but volumes, billion, some a cash timing XXXX, markets requirements which the you’ll highly in million recoveries. advanced reflect flow of over expenditures our additional included leach And net the and spending $X Lone of years we’ve XXXX at to capital low $XXX capital from

You’ll be continue trailing our improving. XX credit X.X see we’re month EBITDA less credit metrics projecting strong, and on than and strong to our basis, metrics times are a and

our to the returns strong profile net of achieved months provide policy, sheet achievement schedule. performance by our production balance XX, board just our base we base providing Slide our used XXXX shareholders, growth payouts up increasing markets consider free long which continue and lived year, debt debt reiterates our our our to and results. further of mentioned, With will earlier established strengthen sheet, will with and improvements. asset flow target, board As base. would have targeted to our we cash net our for with shareholder financial of growing asset to balance balance level additional this Richard The payout expect our And and returns on ahead policy, shareholders for in values was to additional be the several our recent available the build cash that with ability XX%

forward values to now, additional continuing operator, looking on to and open we reporting continued to progress the as our call go questions. we’d And up like We’re build for forward.

these put Josh increases, Kathleen primary has help And prices helping that to supply world mining on explanation had grinding chain the offset price business, gold companies great a want is group. going costs, in us and business. on said an impact some Danny which the in on leading higher They of molybdenum and focused would a done point just a Kendrick is the I business made got cost cost Kathleen, Olmstead our we’ve team were is our offsetting and we’ve and molybdenum Mike – our energy running your byproduct our But material America’s Hughes high around costs. job a management. as about inflation comments production with you higher

these things these cost, helping company really all much increases of combination in is with of a mitigate working us a logistics. to as So

I because of all think given is note a just important I concerns it’s to where – leading wanted giving inflation of us. make So, that our about,

do So, let’s turn questions. over you. to Thank

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

today for congratulations getting debt Kathleen. and Richard and morning, target. to Good net a on the Thanks update

till that then variable just wait thought you. on reason to maybe Is So, dividend end buyback of there preference there? just just before XXXX following return, shift to on there dividend year and program yet quickly or further up is a you strategy? parts why a a last executing program capital train would returns capital between that of on Thank the of full point Kathleen’s special

Thanks, so have forward, of flows of and Emily. consider at to the we as available We’ve up we end debt reached net would – to XX% cash to the shareholders. payouts June the target going additional them just debt generate

this that flow. up of board we to expect out do and the paying will cash reviewing will we XX% will the be be Our policy be excess following that

next share or the will to We conclusions something is that’ll will any at considered have buybacks. time, whether payouts next dividend pay made that’ll additional but months not returns cash into continue And our the strong with continue to cash that And flow. on to we be free flow. the commitment to expect be it several be year beyond. free over and And shareholders generate there cash

are level quarter XX% average a or reached end you’d where that And helpful. of QX, that’s And I production Can quick in you squeeze is believe of today, full at Great, there. could you. production I XQ? expect if on be us that to fourth you an Grasberg, one, exit a of the remind that your Thank rate? we end XXX% it the just where

XX% was average. the

We’re ahead schedule. be end just metal the targets. year. by this of now, terms production in of right XX% That’s under XXX% We’ll of well at

you. Thank

the for the the so average quarter we’ll that’s Emily, – hit we fourth quarter. to And fourth run rates expect the in

Thanks, That’s you, Perfect. Thank Kathleen. Richard. helpful.

Emily. you, Thank

Capital with David line Gagliano Your next of question will come from Markets. the BMO

DMLZ you the CapEx. more for Can is actually how Kathleen, I the if of net through a you commentary you some just my Then of there. spending Zone. those taking much sort getting Again, if I And behind general the Hi, question. capital us thank parts a the increase bit extraction changes. targets That’s and went slight up, wanted the about just a only I between the to just of which by Block ask exit incremental question, missed detail first I little I’m down. it, just there’s bit the changes reason was – you – flagged projects? give million one I could versus another know, those creep, have time Cave changes? can increase projects on the I since to $XXX Cave on are or Zone that? if Block rate just little know just went just forward? rates walk you can And wondering, what are exit Thanks. to talk my you cost speak DMLZ is pulling questions. little

a capital been we timing was capital, that originally and really quickly from the budgeted. spending to budget as shifted And million what as XXXX we On matter haven’t was of XXXX. $XXX a

in timing. brought Lone the So, It’s also $XXX dealing we to over that thing that talked roughly capital is was recoveries only but we’ve Grasberg in total, will at I’ll new we multi-year million about constructing added in we’ve new million plans project We’ve scheduled the and be – to spent mill XXXX – then add in $XXX increasing $XXX And Star. we’ve is that respect our got a that the just some million Ultimately, that in this forward period. with also at pads volumes. with leach related future, XXXX.

the on attractive payout million it’s very of expect, a copper ounces XX,XXX pounds order project. gold of We short of and and and XX

there. respect We any of the of the MLZ So that’s really – I Block anything our and much with cash many, consistent used you forecasts. really Mark, and Deep there hopefully to forecasts the Grasberg, between of only for projects, long-term just There – changes question the the other previous with second But used really previous there with that’ll and as our the be XX% plan plans every flows. update want and is were don’t weren’t will MLZ positive Cave. minor in a material that it’s Grasberg changes very two certainly quarter. Deep we on line and to know with And if add really one be the weren’t that one

or we GDC. SAGX by of plan rates minor values mill throughput. the are until, constrained only of throughout modifications, What some is, minor mine mine the changes the Yes, is XXXX some the did is, the been there’s

this are During the of GDC grades up. coming constraint period,

So, from some the for MLZ. GDC material material for the value the we lower swapped value Deep of slightly higher

spending hear higher positive. voice, the of We’ve let capital period to with is a a good your out come say, constraints. just Dave, capital of me time

but Deep not huge encountered necessity create capital, issues successfully of its met, to new MLZ because manage earlier. amounts we timing, size some is values. spending And a the we’re incremental of the we’ve that Now, huge story, success

So And to SAGX a future to is rates other mill successfully the point, doing to rates, key mine achieve rate success be future team And need build these by up. that. key dealing mine our the targets. to mine years. key a our we’re we’re been constraint was in meeting we and And XX, our and to doing we feel this about, success is making Mark’s But all for that the that something just building that’s for at with over investments. our able XX for congratulating us And so years. that the good

Thanks That’s very helpful. much.

Thanks, David.

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

which the Grasberg mine, question going But question my growth to question. Hi, your organic brings about actually, to is taking Richard. Hi, else for My and shipping something answer was issues pipeline. to last be there. Kathleen, thank you your the

to potential now potentially, is you a of us that really Star, you Grasberg lot we’re aware it’s this you mill new the your each low might interesting incremental of may smaller be that expenses existing some mill growth of. quarter, at more Lone you there be of have recovery bit of there to a lot whole not out anyway, volumes, have So, intensity, the at incremental volumes not a little project identify but get capital how assets, seem able project

is been company, guidance that they’re it’s potential or overall However, are XXXX, this what the moving a the or was? of And just And, kind when manufacturer this reflected it XXXX I do the in increased look to small projects think and say we because guidance, production any growth. regarding yet your lot to of that how at your reflect is, how the production is to Grasberg question of guidance? beyond, these So, guidance and here? not about that a at there’s parts rounding guidance not has

XXXX. ladder project the it’s mill we wouldn’t believe in recoveries it’s, of The Grasberg do And have within but rounding, I some upside. think terms Yes, come the Chris. the until I

potentially XXXX. upside As initiatives. we have basis do we come forward, to That I and on could a believe in from look these consolidated some XXXX

you. Okay, thank

they’re a we heights new grades to they look quarter, to lower there’s large and this that, say, the grade, how mean, me we let But that’s and with. development these measuring grades, of always up, things that had going and terms and able, jump is be business, see complicated column first being just in we of, that to second, in Chris, underground feature unexpected I get underneath look. challenge these the deal slightly so what we in a higher have a numbers,

lot So, parts. just a there of are moving

those timing of time will improve that into there’ll a Shipping, Our sea you time, very that, Grasberg parts. issue, a of, moving our to for over team knows afford numbers unfold finding the of there. shallow ways long point there’s that’s and world incrementally who of lot things, period always for be shallow around a keeps a those follows a

historical there. We operation have loading a relatively complicated

shipping concentrates we impact. rates, is always weather, logistic improve mine again. process rates out schedules, to timing will back just to lighter come I just ongoing and have us real We that ships that’s things a The key mining incrementally in and an have think. issues to

the not the reason is COVID factor well? sorry, a And as that Was many which Grasberg impact of are for shipping a last there issues shipping of the Was types a kind Is shipping the and in at things? some quarter? of normal of problem? that ordinary there

we the by end at really, on impacted the ship us doing earlier quarter. got we hit had loaders, that maintenance weather which No, quarter. we the some in were not then of And the

wasn’t it was really what really, was related. that that’s, COVID So

you. thank Okay,

early but it I example. of wasn’t It impact. mean, to an We major, action has just an is this

pipelines plan, concentrated highlands some go port, with of plan advance that have maintenance a maintenance. plan, schedule to had We the the to down things to this happening, we from

typical in of the XXXXs. Grasberg since ramping So our the nothing started up there, operations unusual. then, This is

rate, future. have just we’ll things ramp-up. of of the focus with the part focus it’ll in for with deal this not be success, success to so And our It mine the

you. Thank Understood.

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

morning, Kathleen. good Hi, Yes. Richard and

of your the technology on guys people leaching have a new on like; are low chalcopyrite lot it. I’m to the future curious, additional do And produced how You judge could Freeport broadly, you like this on from copper seem sounds producing? seems sulfide, XX you view more How that that of you. view be it additional think in this very And potential do out? promising. How impact now, impressive plays you what’s associated personally out. you? you, be on do much copper grade Thank much technology, do the technology very There’s using the sort how the you then It years your technology? could copper slide and globally technology. promising doesn’t this with Freeport it testing industry think, leaching

there’s a there’s the not It’s, by develop and of one So for make in different technologies. to if technology, thanks question. clear play parties efforts want Alex, to here, different I series

have might work and this We to looking on. going us. own the And apply board across how we’re R&D our

we we at take have but specially totally and opportunity a in to of these it of operation, Others so we pass look of inactive, large industry. to, ways. number some special two because situated some, opportunity which size reaching to that this now apply have have are I to are advantage can we think special we in a have look these

that One analytics for of existing this pads, it and is this that to to of leaching, the to use artificial we’re by apply the impact leach us. data inactive but intelligence, a technology large have all supplementing this, way, and abundance to leaching with measure the we opportunity

opportunity to by recovering be that grade thing. otherwise recover through way be it would low aspirationally mined mill investments. capital might mining recovered to an could to be then a to that So otherwise provide sulfide operations have milled. that’s it material have minimize And looking would one ahead And deposits from and

a the So is. it want opportunity shill to opportunity It’s for don’t us, you early we exciting complete copper all how [ph]. for answers. is the with for not of others tight changer stages, share it’s just fundamentals industry. supply an This I have game

here. that been represents are already material XX, in mined, in plans. of any not not Slide XX that On our production reserves, identified pounds the billion is That our that’s

potentially And number. over large you being some of your ends small want make so up a fairly But on just time, that recovering, a comments perspective? percentage Josh, to

and on researching to data combination running that, last of tests technologies in Richard that we’re The leaching just because on. pilot exciting of exciting us, Sure, really unlocking looked studying that us the on the work, see technology, that side several eyes started done analytics allowing to Yes, side. look as that’s is it’s our it, with for at just have is pilot at Richard application thanks, a that’s, different and respect we the what talked in there ever looked Kathleen. we’ve us are as And is what’s opportunity excited various the the learned has even it’s benefits Morenci, the getting than for that with over that opportunities this there. various milling and to previously. more at that and think, way now us really things to processes combination potential on to, opened in really forward. some that ahead out Kathleen touched that the we’ve we in the with of haven’t us going some of the about the the And The technologies thing I data analytics that that of years our

with think footprint costs, we incremental that of that lots what energy, adder good, the we’re forward. passion game of they’re low happens the leaching over tap the I say, engagement really we really would should with the the I industry. into or note levels combination things low-carbon things would I and is with There’s that on these Richard various an for the organization, changer other saw similar I ideas is, bring really it’s fundamental generating a exciting. time. similar But table, the us. about for excitement incremental not, bringing change earlier, models engage that But go step employee or said, and efforts it’s we as opportunities untap if our as we’re The and to call it’s agile in side, thing that And it think the as I seeing and value the the

new session this and Yes, and a to of from formed. recall It’s I is been guys a adding away got is Cory are this walked people his just this number team Freeport Stevens this, opportunity. new had him is leading that’s a large, with I a large

talk so reserves, is in we undeveloped The course, resources. heard outlook about the we that. not assets years, of beyond You’ve the years for undeveloped not copper that being have. about resources the me positive. have, This for it’s market not it’s even our the is This reserves,

of So nobody’s brand Freeport, a better significant situated than to and this advantage new us take is for it. opportunity be to

Thanks, I appreciate color. the

read run. I’ve comments long production some some Now, other, sorry add, can the global copper that, the this say, X% to as maybe read I I’ve could on of

and sounds kind a game going you really potential Appreciate longer mine, changer. extending and Thanks. this of that is it. like, but think dated to kind So, not be of life more of

early. too way Me that too to say early Alex,

Thanks.

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

or had I update the another target you call. just the before could today, if productivity the praise per – the been or have is more that Yes. pounds Thank is on enhancements by that you and that us driven XXX opportunity innovation and Kathleen, guys now wonder, describing in in now is you in million very you’re embedded growth opportunities. much, that for on Richard just the year growth Americas, you pandemic, not get continuing this you

continued internalized in We’ve cut work everything agile now and and project. capital to is and operating on is using in back We we and – work were artificial external it that that internalized We we embedded we doing externalized that That embedded. intelligence it. do. some way

we’re We I’d prior the had to the to a one in roughly get levels. XX% running have well day. is our plans, not that we Cerro move plans been tons say to XXX,XXX pre-pandemic that is area because able above at So of where the it’s Verde, mill, not

they pandemic the I point, think initiatives at not be at with so to Verde are those And will But and Cerro end our in in able year to back passing, are. we plans. some go the those

concentrator rate Verde because It’s be could building said, doing focus do largest and to continue all the technology, deal. Kathleen and our world’s concentrating PT-FI tools to are like of mine to we’ll skills the the we’ll limited ramp-up. At an Cerro not on time is we This milling as – it, a in ongoing future. haven’t one we that with and those with operations world’s the been add Grasberg, brought deal, yet opportunities, new what and we’ve

So team deal, going business one-time an And forward. this bought not it. is really ongoing part into but a our of is our

And That’s then financing. right. if clear. I All just the ask smelter on may

jeopardize doesn’t the will pay in the you this generation potential it and getting the money still the has idea be And dividends or to cash or means to from that correct, a still the increasing venture from. money shares. financing So returns broad that therefore, company allows whoever you that dividends perspective get initiative, get to a flow and banks for Freeport for that the flow guys you cash the for shareholders from

that’s The all That’s of dividend out. affect to a with phase said the of would correct. service. debt duty our the extent debt But XX% Yes. service

the expected to dividends be impacted. to are really, So not FCX

deductible PT-FI. And the smelter costs are of to the tax

mean return? you costs financing the Then

and about costs talking so operating I’m forth. No, the

Okay.

PT-FI of is This Appreciation. all the though.

analysis. the duty. the relief export pointing out from in You nailed your it, [ph], just I’m Marcos that X% you’ve got

is and economics return an at got You’ve of PT-FI Indonesian are taxes the almost costs XX% and tax consolidated Indonesian deductible PT-FI, operations the operating tax gets where through taxpayers. The government royalties. which for depreciation in the substantial

equity an of have they XX%. Now, ownership

in FCX is XXXX. fabulous do. interest had So, the these for XX% think parties or all could interest which outcome more of we to didn’t years. the we the go I all But going government. a into what negotiations, economics Indonesia had retains of the were essentially we

Excellent. much. right. very Thank you All

Thanks, Carlos.

Scotiabank. the Orest from comes Wowkodaw question line next with The of

good Hi, morning.

the what’s see that changing of to Peru some higher growth, of with others. emerging respect potentially happening I’m of is something Freeport like all or and whether deposits develop fronts, future in given or the wondering future. to Chile those maybe countries taxation thinking could Just just in if royalties Ecuador perhaps and in materially terms we outside of look at in

it’s XX%. from supply process We political going Excellent take to and comes have for going point. that. XX% away the don’t know copper the time more today’s from all of Chile to the know get we governments will how out looking both countries this Peru, through to And now and that turn miners.

outcome certified said, that in really have Bottom Just affected President is we the already to us Chile’s a to a decision know prices. impact their the is new by We’ve are on the going got El process opportunity, Other in of don’t future be miners Chile to Abra. be a Peru, expansion long-term constitution. supportive at world-class this. going this line, looking We also in causing what is. delay

footprint. go geographic second to point, we’re valuable more our your planning assets of not to U.S. Our outside

We have opportunities in U.S. elsewhere. the and

Okay.

I I place comments that mean, you do have much the follow-up. of stability to you new I think about mean, President the about, Peru, a I XXXX. agreement think in honored? as it’s confidence But, know Just have going be Cerro tell some in I of that’s how mean, from I Verde, given

of other gone there our that industry We become they been to and evident. get overtime shoulder, reality know back in types self have their look Peru office when economies, support have of into of importance you don’t over and office similar comments, Well, the into mining Presidents the now. with

future We don’t a industry substantial significant production. to mining is of way growth rest in case copper importance levels copper we we the in of in operation current a have through Peru country. Cerro this. opportunity the It work terms of that We’re in of have uncertainty. will the an significant our with present that to But to have Verde our a but Peru, very and working by

poverty, is to do try are and with poverty the done efforts, always and the But cooperatively government will work with I helpful, so older this. relieve to really we’ve all strong industry to as try We stronger. which Peru’s be Indonesia’s it an play contribute a And it’s wouldn’t will to in country. to that work new mean, relatively instructed stabilization one, to communities replaced the have outcome efforts that for agreement,

Thank color. you for the

Your next Agarwal with Abhi from line question of Deutsche will Bank. the come

I previous the just to a lot and Kathleen, you. Morning had the one for Thank call. thanks follow-up Thanks. question question. Richard

focusing think year, over development given Lone And are to here? you know Bagdad decision? able but do when So guidelines of you on be make sort and CapEx there Star is you’ll any I resource early next it’s days, a

I’m And a the hopeful that to position qualify expenditure year. setups tailings. engineer a and project work we’re and traditional studies, our major project that facets estimates still we’re and will plans at would will than a those final capital next Well, we’ve be this to running feasibility working all mill, lower We studies be sorted as already there with studies, got a we’re be mill been the find next design Lone where water rate, With is advancing have don’t our capital is incrementally. in several looking this to than we’ve but respect that out I Star at We’ve in that been said, higher that further looking working of the – months. is increment and and to we try be able intensity to Bagdad, underway.

Got it. squeeze more question, I if you. And one could please. Thank in

compared X, up. sensitivities and moly have and assumptions XQ changed, look the the to even at haven’t Slide though gold the So, if I Slide X the XQ, price EBITDA gone the price with

did unit Am I of – function in XXXX? that XXXX, basically So be a something? assumed being is higher I costs missed to

presented. baked have do costs the No. with our into to for revised it more these and inflation higher are We order that – the including continued forecast. just prices, we order but these some rounded of previously with above cost about numbers, earlier, But numbers respect the energy in items higher magnitude our some we molybdenum are we impact talked but than offsetting numbers magnitude principally these gold slightly and of be should we

Got it. very Thank you much.

the Your JPMorgan. with Glick comes from next question line of Michael

Hey, good morning.

question one me. Just for

I seems operations in agriculture bigger deal water Southwestern I the is could U.S., mean, to relates and impacts remind water maybe agreements it the in of a terms mining costs it in of lot potential like us there. and drought from As than that just But speak situation And your usage. pretty tough a know, place? you to any on

doing of this – Native this one it American level for taken of of years. communities Colorado is problem. groups, the is a a have It’s deal it. And community with been a with over River, with new steps, which major We’ve of not with to consistently operations. sources the is But the we farming with concerning water

to we this to is don’t deal. do – water, ongoing But be now an resources our going we and that great see work see emerging. see and to job crisis we to management going it’s we we will conservation, of try management to ongoing process let we’re devote have everybody don’t to with So, an kind reuse right of with conserve a when water cooperatively any

current in changes anticipate our cost forward. looking into All we won’t that’s of that major and structure built

Understood. you. Thank

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

and Good morning, Richard Kathleen.

the healthy it and to to changes Chiyoda, with those more that supply competitive there everybody a about, is to is process, price PT-FIs with achieve a XXXX potential take level contract, of be as contract structure enough sure to COVID worry the target? comfort the chain their issues, smelter, completion, is along a there it’s that government certain that the the would respect to which back and type which Turning contingency of a I’m all with fixed is timeline

capital occur. of and We a or our lot in the fixed that may estimate. not is just for costs There price reasons the manage able you is a It may contingency not want contract into baked the that want all mentioned. to didn’t have to be risks help to

terms certain So, is of the contract. closely. as situation. regularly over get understands government about situation possible, months we project. felt monitoring our to recognizing XX sharing this to But done we’re the very last control, with of we’re outside XX, was something that the things current the also keeping timeline. COVID the were the – the is Chiyoda the informed government with will the And we like associated timely there’s our is this situation in be as current their And COVID, commitment structure, The right risk delayed within but

three, maybe big And two, four, was several change X.X what that from billion years about ago? bought

and opportunity of had Well, X it the to for lines expansion different. having two total we previously reduced because tons, PT We smelter we the at at million X.X of tons the scope is thinking Smelting. were

period cost is currently. scope are bringing you’ve possible. So there this seen are all some of But all a And as have and as value where those possible smelter Chiyoda, successful but done construction little terms are this with a cost the having yes, over good different. of we’ve what been costs engineering and the book efficiently factors online – changing to making open it bit as parties the in committed as an

we so we’re range the before, were billion above slightly And now. billion, of And in and some $X that there’s $X been pluses minuses. $X.X but billion,

Thanks Kathleen. is sharing the risk open lot book definitely a go The way here.

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

getting Hi, I’m here. full throughput as close at to you’re Grasberg wondering

color like can costs, you hoped on mining you’re where on and aiming basis, it, where to you’re to any – give get If be? at per ton you a thinking underground where is had

Yes.

achieving no be We’re question to hope where about we that.

deal of want on factors, do Mark, to do having these to of general copper, credit, just allow this? gold you the but some just achieving it, comment to high the We with and us grades volumes have

we going that’s unmanned a just GDC, very a be, where completely to haulage to lot it’s seeing fracking system operation the We’ve continuing a mining. cave on And well. and be operating secondary of mature, the rates. train has we’re out, that some helping unit that very close efficient. focus want the opportunities proved very the Obvious more MLZ had is to less blasting. lot and to of Yes. – efficient That’s with is still be Deep think there’s we’re I some

still things lot within But we are to opportunities down. very I’d continue improve. say it’s think these and to we forecast the a settling much of that had, there’s in some So

thank Okay, you.

with the from Goel come will question final Our Jatinder line of Exane BNP Paribas.

the Good for Hi, Thank afternoon. good morning. question. you taking

the we and to be not levied indicated And these not as fines on administrative XXXX media Just discussion like and are any any fines accounts be looking taken looks you’ve is Indonesia, question color as at we’re provision on provide should government? extent, your those there in well, a in can the in accessibility minor timeline, recovered where now, that you with should one same on previously?

the with during and And accrued pandemic. against we in that this We the what performance range, the our party had looks to government the quarter quarter, and and in we fully million. they $XX which engaged will previously related the like worked government Yes. and the be plan $XX the review third the accrued fine we’ve to schedule million was engaged the

behind looks And us. like that it is so

new what a of provided to this to schedule with also We government is the progress expected be. the

is that the future. against so what And will be measured in

expecting to of with we’re resolution So, not – ongoing it’s be we’re it. pleased the this and matter an

mines? if you with from respond strong system time And do think clear. ask how much are? on sustainable you very you one, quick flex very Kathleen, have do moly, in can I to current volumes the prices That’s Understood. year the to better

are latter that at, the On their operating are mines part primary been capacity. looking below of we’ve we

We increase Climax are options looking mine. from to at the production potential

months. we want you Mike And I don’t add? is predict you that know don’t been prices, Mike we’re is seeing during prices, continue even can of terms And but the the market tight. to In tell very that summer

leverage to comment Mike Our a Molybdenum to great want that? a on flex. able business prices business, to make it’s and and we’re you

online that correlates to that price, comes production is, resources, find are they from that copper Yes, together coming you’re and Western a now, it hard And then and but production. plan predominant And that of to how we’re see them the mines the Sure. we story I think you it’s expand and starting can important bring at molybdenum. don’t these economic right, is also to absolutely at how to the Climax vast regards have to general to is copper that our for looking putting majority conditions. feature respond byproduct with right with on of come Kathleen Molybdenum that ramp-up

molybdenum there’s there’s to and kind summer. a out copper of how a plays correlation definitely between story. time. natural over structural And we’ll think So, this it have we the the And deficit see

much. thank so you Excellent,

All everyone. exciting to come. times right. Well, It’s is yet thanks, the best

Thank on. hang you. So

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

may You now disconnect.