Freeport-mcmoran, Inc. · NYSE:FCX

Freeport-mcmoran — Macquarie Global Metals & Mining Conference 2010

26 slides from Freeport-mcmoran's conference presentation, Nov 22, 2010

  1. Slide 1: Macquarie Global Metals & Mining Conference

    MACQUARIE CONNECTIONS MACQUARIE CAPITAL (USA) INC INC. Global Metals & Mining Conference K hl Kathleen L L. Q Quirk i k Executive Vice President & CFO New York City PROVEN PERFORMANCE SHINING FUTURE November 22, 2010 www.fcx.com

  2. Slide 2: Cautionary Statement Regarding Forward-Looking Statements

    Cautionary Statement Regarding Forward-Looking Forward Looking Statements This presentation contains forward-looking statements in which we discuss factors we believe may affect our potential performance in the future. Forward-looking statements are all statements other than statements of historical

  3. Slide 3: Investment Highlights

    Proven Performance,, Shining g Future Investment Highlights  Premier Copper, Gold & Molybdenum Producer  Long-Lived Reserves with Growth Options  Flexible Operating Structure  Geographically Diverse  Significant Exploration Potential  Strong g Financial Position  Experienced Team 3

  4. Slide 4: World's Leading Copper Producers

    World’s Leading g Copper pp Producers Top 10 Copper Producers (2010e) (000 t) 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 Codelco FCX BHP Billiton Xstrata Anglo Rio Tinto Southern KGHM Polska RAO Norilsk Antofagasta American Copper Miedz ____________________ Source: Brook Hunt 2Q10 Report.

  5. Slide 5: Geographically Diverse

    Geographically g p y Diverse 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 64%) Cu 1.1 billion lbs Reserves Mo 6

  6. Slide 6: Strong Markets

    Strong g Markets 2,000 400 1,750 350 1 500 1,500 LME Copper Price 300 0’s Metric Tons s Cents Per Pou 1,250 250 1,000 200 750 150 und 500 100 000 250 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- Jan- Jul- Jan-

  7. Slide 7: 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 0 5 10 15 20 25 0 200 400 600 800 1,000 1,200 Grasberg Complex - 1988 Escondida - 1979 KGHM Polish Copper - 1957 Chuquicamata - 1910 Escondida - 1979 Grasber

  8. Slide 8: Development Projects Update

    Development e e op e t Projects ojects Update North America Morenci Concentrator  Miami Mine Restart  Morenci Mill Restart & Ramp-up  Safford Sulphur p Burner  Chino Restart South America  El Abra Sulfolix  Cerro Verde Expansion Cerro Verde Concentrator Grasberg Indonesia – Underground Develop

  9. Slide 9: Tenke Fungurume

    Tenke Fungurume  Sold 73MM lbs Cu & 6MM lbs Co in 3Q10  At full rates (initial phase), phase) aggregate The mill at Tenke has been annual metal of 250MM lbs Cu & over operating above design capacity 18MM lbs Co  Mill operated at ~12K t/d in 3Q, above 8K t/d design capacity  Increasing mining rat

  10. Slide 10: FCX Announced Copper Additions To Date

    FCX Announced Copper Additions To Date Additional Annual Copper pp +~500mm lbs 40 Tenke Mill & Mine Rate Increase (2011) 30 Cerro Verde Debottleneck (2011) Chino Mine & Mill Restart 200 (ramp up in 2012*) (ramp-up 100 Miami Mine Restart (late 2011) Morenci Mill Restart & 125 Mine Rate Increase (2011

  11. Slide 11: Copper Reserves & Mineralized Material

    Copper Reserves & Mineralized Material as of 12/31/09 billion lbs of copper 12/31/09 / / Copper Reserves 226 by Geographical Region Mineralized 122 North Material (b) billion America (contained copper) lbs 26% 104 at $2.00 Cu price South America Indonesia 33% 33% Reserves at $1.60 Cu price 8% Reserv

  12. Slide 12: Exploration Results Driving Future Growth

    Exploration p Results Driving g Future Growth  Significantly Increased Exploration Activities on Phelps Dodge Properties Following Merger in 2007  Invested ~$550 MM on Exploration Since Merger, Principally Focused on Existing Mineral Districts  Drilled Over 1.6 MM Meters in Core Holes  Results C

  13. Slide 13: Exploration Drives the Mine Plan

    Exploration p Drives the Mine Plan FCX Brownfield Exploration Results = Greenfield Expansion Opportunities RESERVE EXPANSION VOLUME CASH ADDITIONS OPPORTUNITIES GROWTH FLOWS 13

  14. Slide 14: Current Projects Under Evaluation

    Current Projects Under Evaluation North America Tenke Fungurume • Further increases to Morenci/ • Debottlenecking Safford mining rates • Further oxide expansion • Plans for Twin Buttes/ • Sulfide development Sierrita district • Climax • Major mill projects for sulfide development South America Grasb

  15. Slide 15: FCX Copper Projects

    FCX Copper Projects billion lbs copper annually Replacement New Copper Projects Sources El Abra Sulfolix SA Potential 0.3 Projects 0.85 Tenke 0.25 Grasberg Expansions Underground g 01 0.1 0.5 1.1 NA Potential NA Projects Incremental 1 4 billion lbs Cu 1.4 1 7 billion lbs Cu 1.7 Other Opportunities •

  16. Slide 16: Climax Restart

    Climax Restart  One of the most attractive primary molybdenum development p j projects in the world – large-scale g production capacity, p p y, attractive cash costs and future growth options  Initial annual capacity of 30mm pounds with expansion options  $700mm project with estimated remaining c

  17. Slide 17: 2010 Outlook

    2010 Outlook  Sales Outlook: • Copper: 3.85 Billion lbs. • Gold: 1.9 Million ozs. • Molybdenum: 65 Million lbs.  Unit Net Cash Cost (1): • 83¢/lb  Operating Cash Flows (2): • ~ $ $6 Billion • Assumes $3.75/lb Copper for 4Q10 • Each 10¢/lb Change in Copper = $60 Million in 2010  Capital Expenditu

  18. Slide 18: Near-Term Sales Profile

    Near-Term Sales Profile Excludes current projects under evaluation Gold Sales (million ozs) Copper Sales (billion lbs) 1.9 19 2 1.7 1.5 5 1.3 1 4.2 4.1 39 3.9 39 3.9 4 0 2010e 2011e 2012e 2013e 3 ____________________ Note: Consolidated gold sales include approximately 185k ozs in 2010e, 2010e 150k o

  19. Slide 19: 2010e Quarterly Payable Metal Sales

    2010e Q Quarterly y Payable y Metal Sales Gold Sales (thousand ozs) Copper Sales (million lbs) 800 1,250 585 600 478 497 1,081 400 298 1,000 960 914 895 200 0 1Q10 2Q10 3Q10 4Q10e 750 ____________________ Note: Consolidated gold sales include approximately 47k ozs in 1Q10, 30k ozs in 2Q10, 49k ozs i

  20. Slide 20: 2010e Sales and Unit Production Costs by Region

    2010e Sales and Unit Production Costs by Region 2010e Sales by Region North America South America Indonesia Africa 1,320 1,200 1.8 1,080 65(1) 250 20 0.1 Cu Co Mo Au mm lbs mm lbs Cu Cu mm ozs Cu Au mm lbs mm lbs mm lbs mm lbs mm ozs 2010e 2010e 2010e 2010e 2010e 2010e 2010e 2010e (per pound of copp

  21. Slide 21: EBITDA and Cash Flow at Various Copper Prices

    EBITDA and Cash Flow at Various Copper Prices Average EBITDA* ($1,000 Gold & $10 Molybdenum) $12 (US$ billions) $9 $6 $3 $0 Cu $3.00/lb Cu $3.50/lb Cu $4.00/lb Average Operating Cash Flow (excluding Working Capital changes)* ($1,000 Gold & $10 Molybdenum) $8 (US$ billions) $6 $4 $2 $0 Cu $3.00/lb Cu

  22. Slide 22: Sensitivities

    Sensitivities Operating Ch Change EBITDA C h Fl Cash Flow (US$ millions) Copper: -/+ $0.10/lb $375 $260 Molybdenum: -/+ $1.00/lb $60 $50 Gold: -/+ $50/ounce $70 $40 Diesel(1): -/+ 10% $55 $35 Purchased Power(2): -/+ 10% $40 $25 Currencies(3): +/- 10% $120 $70 ____________________ (1) $2.50/gallon ba

  23. Slide 23: Capital Expenditures

    Capital p Expenditures p (1) Excludes current projects under evaluation (US$ billions) Major Projects All Other $3 0 $3.0 $2.7 $2.5 $2.3 11 1.1 $2.0 $1.6 $1.6 1.0 $1.5 06 0.6 0.9 $1.0 (2) 1.6 (5) (3) 1.3 $0 5 $0.5 10 1.0 (4) 0.7 $0.0 2008 2009 2010e 2011e (1) Capital expenditure estimates will conti

  24. Slide 24: Balance Sheet

    Balance Sheet  Repaid $2.6 bn in Debt Since (US$ billions) YE 2008 (35% Reduction) $20 $17.6 (1) $  Significant Si ifi t Liquidity Li idit  Strong Credit Metrics $15  No Near-term Maturities  Investment I t t Grade G d R Rated t d by b Total Debt S&P, Moody’s, Fitch $10 $7.4 $4.8 $5 $0 At Time

  25. Slide 25: Financial Policy

    Financial Policy o y  Maintain Strong Balance Sheet & Liquidity Position  Invest in Attractive Growth Projects  Opportunistic Debt Repayment  Board Action to Increase Common Stock Dividend to $2.00/Share per Annum  Board to Review Financial Policy on an Ongoing Basis 25

  26. Slide 26: FCX Investment Summary

    FCX Investment Summary y  World World’s s Premier Publicly Traded Copper Company  World World’s s Largest Molybdenum Producer & Significant Gold Producer  Long Long-lived lived Reserves, Geographically Diverse Operations  Flexible Operating p g Structure Can Respond p to Varying y g Market Condi

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