Slide 1: China Mining 2010: Resource Availability in the Global Copper Industry
Chi China Mi i Mining 2010 “Resource Resource Availability in the Global Copper Industry” Richard C. Adkerson President and Chief Executive Officer PROVEN PERFORMANCE SHINING FUTURE Tianjin, China www.fcx.com November 17, 2010
Slide 2: FCX Overview
FCX Overview World’s Premier Publicly Traded Copper Company World’s Largest Producer of Molybdenum & Significant Gold Producer World Class, Long-lived, Geographically Diverse Operations Financially Strong Environmentally/Socially Responsible Enterprise Value: +$45 Billion 154 in Fortun
Slide 3: World's Leading Copper Producers
World’s Leading g Copper pp Producers Top 10 Copper Producers (2010e) (000 t) ____________________ Source: Brook Hunt 2Q10 Report. Rankings based on net equity ownership. e=estimate 3
Slide 4: World Class Copper Discoveries Are Extremely Rare
World Class Copper Discoveries Are Extremely Rare Recoverable Copper Reserves 2010e Copper Production Million metric tons Thousand metric tons Source: Brook Hunt e=estimate 4
Slide 5: Metals/Mining Industry Perspectives
Metals/Mining eta s/ g Industry dust y Perspectives e spect es Early Late Mid- 1980’s 2000’s Late 2008 1990’s 1990’s 2000’s Fragmented Significant Reduced Super Record Global Industry Projects Exploration Cycle Prices Led Recession; with History Under During Begins as by Strong China Drives of Destr
Slide 6: Metals/Mining Industry Perspectives
Metals/Mining e a s/ g Industry dus y Perspectives e spec es Early Late Mid- 1980’s 2000’s Late 2008 1990’s 1990’s 2000’s Fragmented Industry History of Destroying Capital Major New Discoveries Chile & Peru Re-open to Foreign Investment Low Consumption Growth 6
Slide 7: Metals/Mining Industry Perspectives
Metals/Mining Industry Perspectives Early Late Mid- 1980’s 2000’s Late 2008 1990’s 1990’s 2000’s Significant Development of Mines, Especially in S. America Strong Prices 7
Slide 8: Metals/Mining Industry Perspectives
Metals/Mining eta s/ g Industry dust y Perspectives e spect es Early Late Mid- 1980’s 2000’s Late 2008 1990’s 1990’s 2000’s By Late 1990’s… - Declining Prices – Increased Supply/Lower Demand - Significant Reduction in Exploration and Capital Investment - High Cost Producers Under Pressure - Indust
Slide 9: Metals/Mining Industry Perspectives
Metals/Mining e a s/ g Industry dus y Perspectives e spec es Early Late Mid- 1980’s 2000’s Late 2008 1990’s 1990’s 2000’s Global IP Recession Production P d ti Curtailed/Stockpiled C t il d/St k il d China Emerges as World’s Largest Copper Consumer Market in Deficit by 2003 “Super Cycle” B
Slide 10: Metals/Mining Industry Perspectives
Metals/Mining eta s/ g Industry dust y Perspectives e spect es Early Late Mid- 1980’s 2000’s Late 2008 1990’s 1990’s 2000’s Production Constraints Continuation of Strong Demand Led by China and Improved Global Economy Record Prices Favorable Capital Markets/Financing Environment Muted Supp
Slide 11: Market Turmoil 4Q08
Market Turmoil 4Q08 Q Early Late Mid- 1980’s 2000’s Late 2008 1990’s 1990’s 2000’s Global Economic Weakness / Financial Sector Distress Markets Not Functioning – No Confidence Re-pricing of Risk Fund Redemption p Driving g Large g Scale Liquidation q All Asset Classes Affected Unpreceden
Slide 12: Markets Have Rebounded Strongly
Markets Have Rebounded Strongly 2,000 400 1,750 350 LME Copper Price 300 1 500 1,500 Cents Per Poun 000’’s Metric Tons 1,250 250 1,000 200 750 150 nd 500 100 250 50 LME & COMEX Exchange Stocks* 0 0 Jan- Jul- Jan- Jul- Jan- Jul- Jan- Jul- Jan- Jul- Jan- Jul- Jan- Jul- Jan- Jul- Jan- Jul- Jan- Jul- Ja
Slide 13: Industry Challenges
Industry dust y Challenges C a e ges Absence of Large Scale Development Projects Cost Escalation and Scarce Raw Materials (E (Energy, L Labor, b E Equipment, i t Tires, Ti etc.) t ) Resource Depletion, Declining Grades Political Risk – Growing Economic Nationalism Regulatory/Environmental
Slide 14: FCX is Well Positioned with Its Geographically Diverse Portfolio
FCX is Well Positioned with Its Geographically Diverse Portfolio Major Mine Operations & Development Projects All major assets majority-controlled and operated North America1 Copper Reserves Copper/Gold/Silver Cu 27.7 billion lbs Mo 2.1 billion lbs Molybdenum Sales Cobalt Grasberg G b (90.64%) (90 6
Slide 15: Proven Performance, Shining Future: Investment Highlights
Proven Performance,, Shining g Future Investment Highlights Premier Copper, Gold & Molybdenum Producer Long-Lived Reserves with Growth Options Flexible Operating Structure Geographically G hi ll Diverse Di Strong Financial Position Experienced Team 15