Freeport-mcmoran, Inc. · NYSE:FCX

Freeport-mcmoran — Freeport-McMoRan Copper & Gold — Morgan Stanley 2011 Basic Materials Conference

27 slides from Freeport-mcmoran's conference presentation, Nov 17, 2011

  1. Slide 1: Morgan Stanley 2011 Basic Materials Conference

    Connecting the World Morgan Stanley 2011 Basic Materials Conference Kathleen L. L Quirk Executive Vice President & Chief Financial Officer www.fcx.com November 17, 2011

  2. Slide 2: Cautionary Statement

    Cautionary Statement 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 facts, such as statements regarding projected ore gr

  3. Slide 3: 2010 Annual Report Highlights

    “Connecting Connecting the World World” 2010 Annual Report Highlights  Global Leader in Production of Copper, Gold and Molybdenum  Well Situated to Meet Growing Demand for Metals  Geographically Diverse  Long-Lived Reserves  Growing Production Profile  Strong Financial Position  Experienced T

  4. Slide 4: FCX's Global Footprint

    FCX’s C sG Global oba Footprint ootp t Major Mine Operations & Development Projects All major assets majority-controlled and operated North America1 Copper Reserves Copper/Gold/Silver Cu 42.2 billion lbs Mo 2.75 billion lbs Molybdenum Sales Cobalt Grasberg (90.64%) Cu 1.2 billion lbs Reserves Mo 78

  5. Slide 5: World's Leading Copper Producers

    World’s Leading g Copper pp Producers Top 10 Copper Producers (2011e) (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 Southern Rio Tinto KGHM Antofagasta RAO Norilsk American Copper ____________________ Source: Brook Hunt 2Q11 Report. Rankings b

  6. Slide 6: World Class Copper Discoveries Are Extremely Rare

    World Class Copper Discoveries Are Extremely Rare Recoverable Copper Reserves 2011e Copper Production Million metric tons Thousand metric tons 0 5 10 15 20 25 30 0 200 400 600 800 1,000 1,200 Grasberg Complex - 1988 Escondida - 1979 KGHM Polish Copper - 1957 Chuquicamata - 1910 Escondida - 1979 Gras

  7. Slide 7: Markets

    Markets 2,500 500 2,000 400 LME Copper Price 00’s Metric Tons s Cents Per Pound 1,500 300 1,000 200 00 500 100 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- Jul- Jan- Jul- 99 99 00 00 01 01 02 02 03

  8. Slide 8: Value Creation Focus

    Value a ue Creation C ea o Focus ocus INVESTMENT CASH MINERAL RESERVE IN ATTRACTIVE PRODUCTION FLOWS/ RESOURCES ADDITIONS DEVELOPMENT GROWTH RETURNS PROJECTS FCX Copper Resources at 12/31/2010 Recoverable Reserves (a) ( ) 120 bn lbs Mineralized Material (contained) (b) 110 bn lbs Total Reserves (a)

  9. Slide 9: Reserve Additions Post Merger

    Reserve Additions Post Merger g Since 12/31/06 +43 billion lbs Cu Cu* Candelaria/Ojos Bagdad Morenci Cerro Verde Sierrita Tenke Balance, net * Proven and probable reserves as of 12/31/10 totaled 120.5 bn lbs. and were based on a long-term average copper price of $2.00/lb. 9

  10. Slide 10: North American Copper Projects

    North American Copper pp Projects j Morenci Mill Restart (a) Miami Restart (b) Morenci Mine Rate Increase (a) ( ) Chino Restart (c) ( ) (a) Morenci Mill Restart & Mine Rate Increase completed in 2011; incremental copper of 125mm lbs/year (b) Miami Mine Restart project is in progress with completion

  11. Slide 11: Climax Molybdenum Restart

    Climax Molybdenum y Restart  Advanced Stage Project  Start-up in 2012 with ramp up to 20mm lbs/year during 2013  Depending on market conditions, Climax may increase to 30mm lbs/yr SAG & Ball Mills  FCX will operate its Mo mines in a flexible manner to meet market needs  Construction 80% complet

  12. Slide 12: El Abra Sulfolix

    El Abra Sulfolix  Commenced production in Sulfolix Stacking 1Q11 Portable Stacker  Ore crushing, conveying, stacking, leaching & PLS transfer systems complete  Currently l extending di leach l h pad d  Project extends life 10+ years – ~300MM lbs Cu/yr aggregate  Approximate $725MM project throu

  13. Slide 13: Long-Term Underground Mine Development in Indonesia

    Long-Term Underground Mine Development in Indonesia Grasberg Block Cave • Significant undeveloped UG reserves  Aggregate reserves of 37 billion lbs Cu & 33 million ozs Au • DOZ expanded to 80K t/d • Initiated mining at Big Gossan – full rates of 7K t/d by late 2012 • Grasberg Block Cave – ramp-up t

  14. Slide 14: Advanced Stage Copper Projects

    Advanced Stage g Copper pp Projects j Incremental Preliminary Copper Capital* Achieve Mill Expansions (mm lbs/year) ($ billions) Full Rates Status EIS filing Cerro Verde (360K) 600 $4 0 $4.0 2016 4Q11 Completing Morenci (115K) 225 1.2 2014 Feasibility Study U de Under Tenke (14K) 150 09 0.9 2013 Con

  15. Slide 15: Potential Additional Projects

    Potential Additional Projects j North America South America • Sulfides/Mill Projects • El Abra Mill  Large Scale Morenci  Sierrita Af i Africa  Bagdad  Ajo • Future Expansion  Twin Buttes of Tenke Oxides • Safford/Lone Star • Tenke Sulfides 15

  16. Slide 16: Exploration Targets in Major Mineral Districts

    Exploration Targets in Major j Mineral Districts Safford/Lone Star/Morenci District Cerro Verde North South Exploration America America in 2011e 28% 37% Tenke Fungurume/Africa $250 million 4% Africa 14% 17% Grasberg/Indonesia Indonesia Australasia & Other Areas Note: FCX’s consolidated share; e = es

  17. Slide 17: 3Q11 Highlights

    3Q11 Q Highlights g g Sales Data 3Q11 3Q10 9-mo ’11 9-mo ’10 Copper Consolidated Volumes (mm lbs) 947 1,081 1 081 2,875 2 875 2,955 2 955 Average Realization (per lb) $3.60 $3.50 $3.94 $3.33 Site Production & Delivery Unit Costs (per lb) $1.71 $1.38 $1.65 $1.38 Unit Net Cash Costs (per lb) $0.80 $0.

  18. Slide 18: 2011 Outlook

    2011 0 Outlook Out oo  Sales Outlook: • Copper: 3.8 Billion lbs. • Gold: 1.6 Million ozs. • Molybdenum: 78 Million lbs.  Unit Net Cash Cost(1): • $0.95/lb  Operating Cash Flows(2): • ~$7 Billion (@$3.25/lb Copper for 4Q11) • Each 10¢/lb Change in Copper in 4Q11 = $75 Million in 2011  Capital Exp

  19. Slide 19: Near-Term Sales Profile

    Near-Term Near Term Sales Profile Excludes current projects under evaluation Copper Sa Coppe Sales es ((billion o lbs) s) Gold Sales (million ozs) 1.9 19 2 1.7 5 1.6 1.1 4.2 1 3.9 3.9 4 3.8 0 2010 2011e 2012e 2013e 3 ____________________ Note: Consolidated gold sales include approximately 184k ozs i

  20. Slide 20: Update on PT-FI Operations and Labor Strike at Grasberg

    Update on PT-FI Operations and Labor Strike at Grasberg  Continuing to Seek Mutually Acceptable Resolution to Ongoing Labor Strike which Commenced on September 15, 2011  Committed to Work in Good Faith with Union Leaders  Strike Impact on Operations • Operating at Reduced Rates in Open Pit/DOZ Un

  21. Slide 21: 2011 Operating Estimates

    2011 Operating p g Estimates 2011e Unit Production Costs North South (per pound of copper) America America Indonesia Africa Consolidated Cash Unit Costs (1) Site Production & Delivery (2) $1.81 $1.36 $2.06 $1.56 $1.70 By-product Credits (0.50) (0.35) (2.37) (0.61) (0.94) Treatment T t t Charges Ch 0

  22. Slide 22: EBITDA and Cash Flow at Various Copper Prices

    EBITDA and Cash Flow at Various Copper Prices Average EBITDA* ($1,200 Gold & $12 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)* ($1,200 Gold & $12 Molybdenum) $8 (US$ billions) $6 $4 $2 $0 Cu $3.00/lb Cu

  23. Slide 23: Sensitivities

    Sensitivities Operating Ch Change EBITDA C h Fl Cash Flow (US$ millions) Copper: -/+ $0.10/lb $380 $265 Molybdenum: -/+ $1.00/lb $75 $60 Gold: -/+ $50/ounce $70 $40 Diesel(1): -/+ 10% $80 $60 Purchased Power(2): -/+ 10% $45 $35 Currencies(3): +/- 10% $130 $100 ____________________ (1) $3.40/gallon b

  24. Slide 24: Capital Expenditures

    Capital p Expenditures p (1) Major Projects All Other Advanced Stage Copper Projects (5) (US$ billions) $5 $4 $3.7 1.0 $3 $2.6 $ $2 12 1.2 14 1.4 $1.4 $1 0.7 (3) (2) 14 1.4 (4) 13 1.3 ((4)) 0.7 $0 2010 2011e 2012e (1) Capital expenditure estimates will continue to be reviewed and revised subject to

  25. Slide 25: Balance Sheet

    Balance Sheet  Repaid $3.8 bn in Debt Since (US$ billions) YE 2008 (~50% Reduction) $20  Significant Si ifi t Li Liquidity idit $17.6 (1)  Strong Credit Metrics $15  No Near-term Maturities  Investment Grade d Rated dbby S&P, Moody’s, Fitch Total Debt $10 $7.4 $ 4 T $5 $3.5 $0 At Time of PD Acq

  26. Slide 26: Financial Policy

    Financial Policy o y  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 June 2011)  Board to Review F

  27. Slide 27: FCX Investment Summary

    FCX Investment Summary  World’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 e b e Operating Ope at g Structure St uctu e Can Ca Respond espo d to Varyi

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