Freeport-mcmoran, Inc. · NYSE:FCX
Freeport-mcmoran — Freeport Mcmoran Copper & Gold — Q4 2011 Earnings Presentation
46 slides from Freeport-mcmoran's earnings presentation, Jan 20, 2012
Slide 1: 4th Quarter 2011 Earnings Conference Call
Freeport-McMoRAN /=v" Copper & GoLp Connecting the World 4 Quarter 2011 Earnings Conference Call FCX LISTED wwnw.fex.com January 19, 2012 NYSE
Slide 2: Cautionary Statement
FREePoRT-McMoRan Copper & GoLD Cautionary Statement sc This presentation contains forward-looking statements in which we discuss factors we believe may affect our potential performance in the future. Forward-boking statements are all statements other than statements of historical facts, such as stat
Slide 3: 2011 Highlights
FREePoRT-McMoRan Copper & GoLD 2011 Highlights [= Excellent Financial Performance - Exceeded 2010 Records Solid Operating Performance Impacted by Labor Disruptions New Labor Agreements at Grasberg, Cerro Verde & El Abra Advanced Growth Projects to Increase Copper Production by ~25% Over Next 4 Years
Slide 4: 4Q11 & 2011 Highlights
FREePoRT-McMoRan Copper & GoLD 4Q11& 2011 Highlights J Copper Consolidated Volumes (mm Ibs) 823 941 3,698 3,896 Average Realization (per Ib) $3.42 $4.18 $3.86 $3.59 Site Production & Delivery Unit Costs (per Ib) $196 $1.46 $1.72 $1.40 Unit Net Cash Costs (per Ib) $1.57 $0.53 $1.01 $0.79 Gold Consoli
Slide 5: Quarterly Operating Highlights
FREePoRT-McMoRan Copper & GoLD od Quarterly Operating Highlights c= 4Q11 Unit Production Costs (per pound of copper} North South America America® Indonesia* Africa Consolidated* Cash Unit Costs Site Production & Delivery $1.73 $1.56 $6.92 $1.58 $1.96 By-Product Credits (0.37) (0.27) (3.72) (0.35) (0
Slide 6: Markets
FREePoRT-McMoRan Copper & GoLD Markets LME Copper Price 000’s Metric Tons punog Jeg s1ueaD LME & COMEX Exchange Stocks* Jan- Jue Jans Jue Jan Jue Jan- Jue Jan Jue Jan Jue Jan ub Jae Jue Jan- Ju Jans Jub Jan ule Jan Jue Jan 99 99 00 00 Of Of 02 @ 03 03 Of Of O5 05 06 06 OF O7 08 Os 09 o9 19 10 11 11
Slide 7: Copper Market Commentary
Freeport-McMoRAN Copper & GOLD Copper Market Commentary Physical Markets Remain Relatively Tight Positive Data from China — Strong Imports Global Inventories Declining U.S. Economic Data Improving » Auto Sales and Production are Growing » Residential Construction is Slowly Improving » Market Sentime
Slide 8: Labor Agreements
Freeport-McMoRAN Copper & GOLD Labor Agreements Grasberg Cerro Verde + 90-Day Strike: September 15 — » 61-Day Strike (Ended on November 28, December 15 2011) » Temporary Mill Disruption Beginning » Insignificant Impact on Production in Late October Resulting from Damage to Pipelines » Completed 3-Ye
Slide 9: Value Creation Focus
FREePoRT-McMoRan Copper & GoLD Value Creation Focus CASH FLOWS/ RETURNS Recoverable Reserves 120 bn Ibs Mineralized Material (contained) © 115 bn Ibs Total Reserves /& Mineralized Material 235 bn Ibs (2) Preliminary estimate of recoveratve proven and probable copper reserves using 3 long-term averag
Slide 10: Preliminary Reserves at 12/31/11
FREePoRT-McMoRan Copper & GoLD Preliminary Reserves at 12/31/11 Consolidated Proven & Probable Reserves S Reserves @12/34/10" Additions revisions* Production Net change ey Reserves @12/31/11 * as Sof 2011 production Reserves @12/31/06° Additions ‘revisions* Production Net change Reserves @12/31/11 *
Slide 11: Copper Reserves & Mineralized Material
FREePoRT-McMoRan Copper & GoLD Copper Reserves & Mineralized Material as of 12/31/11 cy ee 7 billion Ibs of copper 12/31/11 235 Mineralized Material ©) by Geographical Region Mineralized Material >) (contained copper) North 120 at $2.20 Cu price ‘Paneales 54% Indonesia Reserves 17% at $2.00 Cu price
Slide 12: Significant Reserve Additions
FREePoRT-McMoRan Copper & GoLD Significant Reserve Additions Sia Since 12/31/06 Exploration Spend Reserve Additions _ +46 billion Ibs Cu* $0.8 billion 2.3x cumulative production since 12/31/06 Candelaria/Ojos South North America America Australasia & Other Areas Balance, net * Preliminary estimated
Slide 13: North American Copper Projects
FREePoRT-McMoRan North American Copper Projects 7 eS at x = CAI Chino Restart (c) FR <8 ny
Slide 14: Climax Molybdenum Restart
FREePoRT-McMoRan Copper & GoLD Climax Molybdenum Restart 4s Advanced Stage Project = Start-up in 2012 with ramp up to 20mm lbs/yr during 2013 =" Depending on market conditions, Climax may increase to 30mm Ibs/yr Construction 95% complete* =a . Toth eee Initiated mine development = Cleaner & Roughers
Slide 15: El Abra Sulfolix
FREePoRT-McMoRan Copper & GoLD El Abra Sulfolix « Commenced production in 1Q11 ° Project extends life 10+ years — ~300MM lbs Cu/yr ° Capital Cost: ~$725MM through 2015 with $580MM* b for initial phase to be completed | in first-quarter 2012 ¢ Large sulfide resource = Exploration results indicate pot
Slide 16: Long-Term Underground Mine Development in Indonesia
FREePoRT-McMoRan Long-Term Underground Mine Copper & GoLD Development in Indonesia Fo~-% 7 Grasberg Block Cave Significant undeveloped UG reserves = Aggregate reserves of 37 billion lbs Cu & 32 million ozs Au DOZ capacity of 80K t/d Initiated mining at Big Gossan — full rates of 7K t/d by mid-2013 G
Slide 17: Advanced Stage Copper Projects
FREePoRT-McMoRan Copper & GoLD Advanced Stage Copper Projects 4 ~ " Incremental Preliminary . Copper Capital* Achieve Mill Expansions (mmlbs/year) ($billions) FullRates Status Cerro Verde (360K) 600 $4.0 2016 iit Morenci (115K) 225 1.2 2014 poscimneedy Tenke (141) 1500.9 2013 conetacion TOTAL 975 $6
Slide 18: Development Opportunities: Morenci Mill Expansion
Copper & GoLD De velopment Opportunities re. Morenci Mill Expansion Sig —~ 7 Positive drillingresults continue to expand potential milling sulfide resource in this multi-year program 5 Copper (bin Ibs) Increase mining rate to 900K st/d 26. (from 700K st/d) Capital costs: ~$1.2 billion ; 13.3 11.5 In
Slide 19: Development Opportunities: Cerro Verde Mill Expansion
“ernsne“*** Development Opportunities re. Cerro Verde Mill Expansion EE Key Project Metrics Expand mill from 120K t/d to 360K t/d Increase mining rate from 320K t/d to 850K t/d Capital costs: ~$4 billion Incremental Production: 600mm Ibs Cu/year, 15mm lbs Mo/year Reserve Life: ~90 years current, Cu
Slide 20: Development Opportunities: Tenke Fungurume Expansion
“rene Development Opportunities 4 Si Tenke Fungurume Expansion i: Key Project Metrics Expand mill to 14K t/d Increase mining rate from 60K t/d to 150K t/d Add tankhouse capacity Capital costs: $850 million Incremental Production: 150mm Ibs Cu/year Construction under way — targeted completion 2013 Ex
Slide 21: Potential Additional Projects
Potential Additional Projects fe North America South America e Sulfides/Mill Projects El Abra Mill «Large Scale Morenci " Sierrita "Bagdad Aftica . “Ajo e Future Expansion of Tenke Oxides = Twin Buttes e Safford/Lone Star Tenke Sulfides
Slide 22: Exploration Targets in Major Mineral Districts
FREePoRT-McMoRan Coreen «oun Exploration Targets in Major Mineral Districts SS $275 million in 2012e North America 27% 16% Australasia “ @00-[u55) & Other Areas Note: FCX’s consolidated share; e = estimate, Sze Cautionary Statement. 22
Slide 23: 2012 Outlook
FREePoRT-McMoRan Copper & GoLD 2012 Outlook » Sales Outlook: ¢ Copper: 3.8 Billion Ibs. ¢ Gold: 1.2 Million ozs. ¢ Molybdenum: 80 M ion Ibs. >» Unit Net Cash Cost/: ¢ $1.38/Ibin 2012e ¢ Reflects Impact of Lower Volumes at Grasberg ¢ Future Costs Expected to Decline with Higher Volumes » Operating Ca
Slide 24: Near-Term Sales Profile
FREePoRT-McMoRan Copper & GoLD Near-Term Sales Profile Gold Sales (million ozs’ 80 J Molybdenum Sales (n nN Ibs 90 0+ 20 i 16 17 14 12 1 0 2011 zoe | 2013e | OHe ‘Foie? CinsoRaTed gt cales include spprosinarely 1396 ozs n 2011, 125% ons in 20120, 160k or in 2043s, and 1708 o2=n 204% or noncontling‘o
Slide 25: 2012e Quarterly Payable Metal Sales
FREePoRT-McMoRan Copper & GoLD 2012e Quarterly Payable Metal Sales Copper Sales (mi 1,250 1,000 750 500 250 1912e 2Q12e 3gize agize ‘Foie? Ginsoiaed copper sales include spprorimately 160 mm fein 10120, 180 mm ben ZO, 480-mm tbs in 30128 and 200 ym bs in 409128 er soncontliig ote: excludes orchased
Slide 26: 2011 and 2012e Sales by Region
FREePoRT-McMoRan Copper & GoLD 2011 and 2012e Sales by Region 2011 Salesby Region North America South America Indonesia* 1,322 79) ‘sail 846 13 Sal. I mmibs I Mog mmibs. ne r pr Africa 283 25 Cu Co mmibs mmibs “Production impacts fom 2011 labor sbike aprroximated 235 mm pound of copper and 275k ounc
Slide 27: 2011 and 2012e Unit Production Costs by Region
FREePoRT-McMoRan Copper & GoLD 2011 and 2012e Unit Production Costs by Region =< 2011 TA AE REE avers Pere Indonesia* _ Africa Consolidated* Cash Unit Costs Site Production & Delivery) = $1.78 $1.38 $2.21 $1.57 $1.72 By-product Credits (0.48) (0.35) (2.47) (0.58) (0.89) Treatment Charges 0.11 0.17 0
Slide 28: Reconciliation of Unit Cash Costs - Consolidated
Copper & GoD Reconciliation of Unit Cash Costs - Consolidated ¢ per lb of copper 2011 101¢ Grasberg (a) 20 North America (b) 10 South America (c) 7 Total 37 2012e 138¢ Impact of Higher 2013e/2014e Grasberg Volumes (20¢) With Higher Grasberg Volumes 118¢ (@) lower gold volumes (down 119%) and higher
Slide 29: EBITDA and Cash Flow at Various Copper Prices
corene® EBITDA and Cash Flow at Various Copper Prices ($1,200 Gold & $12 Molybde! $12] (Ussbillions) $9 $6 $3 $0 Cu $3.00/Ib Cu $3.50/Ib Cu $4.00/Ib Average Operating Cash Flow (excluding Working Capital changes)* (81,200 Gold & $12 Molybdenum) $10) (US$billions) $e $6 $4 $2 $0 Cu $3.00/Ib Cu $3.50/
Slide 30: Sensitivities
FREePoRT-McMoRan Copper & GoLD Sensitivities (US$ millions) Copper: -/+ $0.10/Ib $400 $275 Molybdenum: -/+ $1.00/Ib $80 $65 Gold: -/+ $50/ounce $80 $50 Diesel: -/+ 10% $100 $70 Purchased Power™: -/+ 10% $50 $40 Currencies™: +/- 10% $130 $100 (i) $3.50[gallon base care assumption. (2) 72¢hkih basecas
Slide 31: Capital Expenditures
FREePoRT-McMoRan Copper & GoLD Capital Expenditures Major Project All Oth (US$ billions) i Major Projects a _ $55 " $4.0 $3 4 $2 $15 $0 5 2011 2012e 2013e (1) Capital ewenditure estimates willcontinue to be reviewed andrevised subject to market conditions. (2) Primarily includes Graeberg underground
Slide 32: Balance Sheet
Copper & GoLD os Balance Sheet fo ae Repaid $3.8 bn in Debt Since (US$ billions) YE 2008 (~50% Reduction) 920 $17.6 @ Significant Liquidity Strong Credit Metrics $15 No Near-term Maturities Investment Grade Rated by 3 S&P, Moody's, Fitch & $10 | 2 $5 $0 ~ At Time of PD Acquisition 12/31/08 12/31/11
Slide 33: Financial Policy
FREePoRT-McMoRan Copper & GoLD Financial Policy = Maintain Strong Balance Sheet & Liquidity Position = Invest in Attractive Growth Projects = Opportunistic Debt Repayment = Current Common Stock Dividend Rate: $1.00/Share per Annum = Paid ~$950 Million in Supplemental Dividends (December 2010 and Jun
Slide 34: FCX Investment Summary
FREePoRT-McMoRan Copper & GoLD FCX Investment Summary cc World’s Premier Publicly Traded Copper Company World’s Largest Molybdenum Producer & Significant Gold Producer Long-lived Reserves, Geographically Diverse Operations Flexible Operating Structure Can Respond to Varying Market Conditions Signifi
Slide 35: Reference
Reference Slides
Slide 36: PT-FI Mine Plan
Copper & GoLD PT- Mine Plan PT-FI’sShare of Metal Sales, 2012e-2016e 2012e — 2016e PT-FI Share Total: 5.9 billion Ibs copper copper, billion Ibs Annual Average: 1.18 billion lbs Gold, million ozs 2012e — 2016e PT-FI Share Total: 8.4 million ozs gold Annual Average: 1.68 million ozs 22 1.6 L5 L5 1.2
Slide 37: Grasberg Open Pit
FREePoRT-McMoRan Copper & GOLD Grasberg Open Pit Me
Slide 38: Grasberg Mining Sequence in 2012
FREePoRT-McMoRan “wrasse Mining Sequence in 2012 Copper Equivalent Cross Section Legend: mm 0.25- 0.99% CuEq 1.00 - 1.99% CuEq lm 2.00 - 2.99% CuEq mm >3.00% CuEq 38
Slide 39: Grasberg Mining Sequence in 2012
FREePoRT-McMoRan “wrasse Mining Sequence in 2012 Copper Equivalent Cross Section Legend: mm 0.25- 0.99% CuEq 1.00 - 1.99% CuEq lm 2.00 - 2.99% CuEq mm >3.00% CuEq 39
Slide 40: Grasberg Mining Sequence in 2012
FREePoRT-McMoRan “wrasse Mining Sequence in 2012 Copper Equivalent Cross Section Legend: mm 0.25- 0.99% CuEq 1.00 - 1.99% CuEq lm 2.00 - 2.99% CuEq mm >3.00% CuEq 40
Slide 41: Grasberg Mining Sequence in 2012
FREePoRT-McMoRan “wrasse Mining Sequence in 2012 Copper Equivalent Cross Section Legend: mm 0.25- 0.99% CuEq 1.00 - 1.99% CuEq lm 2.00 - 2.99% CuEq mm >3.00% CuEq 41
Slide 42: Grasberg Mining Sequence in 2013
FREePoRT-McMoRan “wrasse Mining Sequence in 2013 Copper Equivalent Cross Section A 9N and 9S are the Primary Ore Pushbacks in 2013 Grasberg Plan View Legend: mm 0.25- 0.99% CuEq 1.00 - 1.99% CuEq lm 2.00 - 2.99% CuEq mm >3.00% CuEq 42
Slide 43: Grasberg Mining Sequence in 2014
FREePoRT-McMoRan Copper & GoLD Mining Sequence in 2014 Copper Equivalent Cross Section A 9N and 9S are the Primary Ore Pushbacks in 2014 Grasberg Plan View 43
Slide 44: Grasberg Mining Sequence in 2015
FREePoRT-McMoRan “wrasse Mining Sequencein 2015 Copper Equivalent Cross Section 9S is the Primary Ore Pushback in 2015 Grasberg Plan View Legend: 44
Slide 45: Grasberg Mining Sequence in 2016
FREePoRT-McMoRan swres’ Mining Sequence in 2016 Copper Equivalent Cross Section 9S is the Primary Ore Pushback in 2016 Grasberg Plan View Legend: 45
Slide 46: Site Operating Costs by Category
FREePoRT-McMoRan Copper & GoLD Site Operating Costs by Category Consolidated Materials 33% Manpower 2011 Note: & = estimate, See Cautionary Statement. 46
Freeport Mcmoran Copper & Gold — Q4 2011 Earnings Presentation on 6ix