Freeport-mcmoran, Inc. · NYSE:FCX
Freeport-mcmoran — Freeport Mcmoran Copper & Gold — Q1 2012 Earnings Presentation
48 slides from Freeport-mcmoran's earnings presentation, Apr 19, 2012
Slide 1: 1Q 2012 Earnings Conference Call
45* Quarter 2012 “\._ Earnings Conference Call
Slide 2: Cautionary Statement
FrReepont-McMoRan COPPER & GOLD Cautionary Statement This presentation contains forward-looking statements in which we discuss factors we believe may affect our potential future performance. Forward- looking statements are all statements other than statements of historical facts, such as statements
Slide 3: Connecting the Future
FrReepont-McMoRan COPPER & GOLD "Connecting the Future” . . . . . . 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 Environmentally Responsible E
Slide 4: 1Q12 Highlights
FrReepont-McMoRan COPPER & GOLD 1Q12 Highlights = Strong Operating Performance in Americas and Africa = Continuing Progress to Restore Normal Operations at Grasberg = Advanced Growth Projects, Targeting Over 25% Increase Over the Next Three to Four Years = Completed Highly Attractive Debt Refinancin
Slide 5: 1Q12 Highlights
FrReepont-McMoRan COPPER & GOLD 1Q12 Highlights Sales Data 1912 Copper Consolidated Volumes (mm Ibs) 827 926 Average Realization (per Ib) $3.82 $4.31 Site Production & Delivery Unit Costs (per Ib) $1.96 $1.61 Unit Net Cash Costs (per Ib) $1.26 $0.79 Gold Consolidated Volumes (000's ozs) 288 480 Aver
Slide 6: Grasberg Update
FrReepont-McMoRan COPPER & GOLD Grasberg Update = Reached Terms of New 2-yr Labor Agreement for PT-FI Employees in Mid-December 2011 = During 1Q12, PT-FI Experienced Work Interruptions in Connection with Efforts to Resume Normal Operations 1Q12 Production Impacts: ¢ 80mm lbs of Copper ¢ 125k ozs of
Slide 7: Quarterly Operating Highlights
FrReepont-McMoRan COPPER & GOLD Quarterly Operating Highlights 1Q12 Unit Production Costs. (per pound of copper) North South 7 America America’ Indonesia _Africa Consolidated Cash Unit Costs Site Production & Delivery © $1.80 $1.53 $3.51 $1.50 $1.96 By-Product Credits (0.41) (0.29) (3.51) (0.33) (0.
Slide 8: Markets
FrReepont-McMoRan COPPER & GOLD Markets 400 2,000, E e 5 2 LME Copper Price 2 3 g $ 1,000 200 4 8 500 100 0 Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 JubOS Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-4i Jan-12 “LME and Comex, excluding Shanghai stocks, producer, consume
Slide 9: Copper Market Commentary
FrReepont-McMoRan COPPER & GOLD Copper Market Commentary = China Remains Important Demand Driver ¢ Urbanization & Infrastructure Development ¢ Slowing Growth on Larger Base = Significant Consumption U.S. — Positive Growth Trends + Manufacturing & Employment Gains - Auto Sales and Production are Grow
Slide 10: PT-FI Contract of Work
FrReepont-McMoRan COPPER & GOLD PT-FI Contract of Work = 50-Year Agreement Signed in 1991 + Initial Term Through 2021 + Two 10-Year Extensions Through 2041 = COW Provides Fixed Taxes and Royalty Rates + 35% Tax Rate (Current Statutory Rate = 25%) + Royalty Rates: — 3.5% Copper (New Mining Law = 4%)
Slide 11: Financial Benefits to Indonesia
FrReepont-McMoRan COPPER & GOLD Financial Benefits to Indonesia (GS billions) Contributed Over $60 Bi Planning Over $15 Billion in New Investments ion to National GDP in Total Since 1992 Largest Private Employer in Papua and One of the Largest Taxpayers in Indonesia Last 20112 5 Years Direct Benefit
Slide 12: Value Creation Focus
FrReepont-McMoRan COPPER & GOLD Value Creation Focus INVESTMENT CASH MINERAL RESERVE IN ATTRACTIVE “@ PRODUCTION FLOWS/ RESOURCES ADDITIONS DEVELOPMENT GROWTH RETURNS | PROJECTS Fe opper Resources at 12/31/2011 Recoverable Reserves 120 bn Ibs Mineralized Material (contained) ” 115 bn Ibs Total Reser
Slide 13: Copper Reserves & Mineralized Material
FReepont-McMoRan |CopPER & GOLD Copper Reserves & Mineralized Material Z ( Z as of 12/31/11 hi Ml billion Ibs of copper 12/31/11 235 Mineralized Material ©) | by Geographical Region Mineralized | 115 Material) § > billion (contained copper) Ibs North 120 i | America 54% South Indonesia America / Res
Slide 14: Completed Copper Projects
FReepont-McMoRan COPPER & GOLD Completed Copper Projects Incremental Copper North American Restarts mm Ibs/year Status * Morenci Mill Restart in sage 125mm lbs production Morenci Mine Rate Increase = = in + Miami Restart 70mm Ibs production * Chino Restart 150mm Ibs in 2012 & 2013 in ~250mm lbs in 2
Slide 15: Climax Molybdenum Start-Up
FReepont-McMoRan COPPER & GOLD Climax Molybdenum Start- Up, hill “| ¢ Start-up in March 2012 ¢ Construction essentially complete with commissioning on-going in 2Q12* ¢ Ramp up to 20mm Ibs/yr during 2013 — ¢ Depending on market conditions, |_E=j=aas Climax may increase to 5? 30mm Ibs/yr * ~$700mm in
Slide 16: Long-Term Underground Mine Development in Indonesia
FREepont-McMoRan — comme“ Long-Term Underground Mine Development in Indonesia Vl ¢ Significant undeveloped UG reserves = Aggregate reserves of 37 billion Ibs Cu & 32 million ozs Au ¢ DOZ capacity of 80K t/d ¢ Initiated mining at Big Gossan — full rates of 7K t/d in 2013 ¢ Grasberg Block Cave — ramp-
Slide 17: Grasberg BC & DMLZ Underground Mine Development
FReepont-McMoRan COPPER & GOLD Grasberg BC & DMLZ Underground Mine Development ¢ Completed significant development on access to underground ore bodies Grasbera open pit ¢ Completed 55 km of development for Grasberg BC & 20 km for DMLZ ¢ Key development activities include work on ore flow systems & G
Slide 18: Copper Projects in Progress
FReepont-McMoRan |CopPER & GOLD Copper Projects in Progress y Ml MM Incremental . Copper Capital* Achieve (mm Ibs/year) ($billions) FullRates Status Mill Expansions (a) EIS filed 4Q11; Cerro Verde (360K) 600 $4.0 2016 | ensineering & long-lead items Morenci (115K) 225 1.4 2014 Detailed engineering &
Slide 19: Development Opportunities: Morenci Mill Expansion
FREepont-McMoRan “rnt*= Development Opportunities =a Morenci Mill Expansion Mie Key Project Metrics Positive drilling results continue to expand potential milling sulfide resource in this multi-year program © Expand mill to 115K t/d Copper (bin Ibs ) ¢ Increase mining rate to 900K st/d 26.5 (from 70
Slide 20: Development Opportunities: Cerro Verde Mill Expansion
FREepont-McMoRan suns“ Development Opportunities Cerro Verde Mill Expansion Mi lll 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 Ibs Mo/year Reserve Life: ~90 years c
Slide 21: Development Opportunities: Tenke
FREepont-McMoRan ome“ Development Opportunities zee Key Project Metrics £ Construction Progress Bo. eee — Expand mill to 14K t/d 3 Sas 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 — t
Slide 22: Potential Additional Projects
Potential Additional Projects North America South America e Sulfides/Mill Projects ¢ El Abra Mill «Large Scale Morenci Sierrita . « Bagdad efiles ! “Ajo e Future Expansion » Twin Buttes of Tenke Oxides e Safford/Lone Star » Tenke Sulfides
Slide 23: Americas Growth Outlook
FReepont-McMoRan Americas Growth Outlook Mu Copper Production billion Ibs per year Potential Projects 3.5 D 29 Fae under review . Expansion 2.6 bgonaon CO cad I a 7 ’ Morenci y Mill Exp. #2 ElAbra | W115 \ i A Mill \ bin tbs) aa : Lone y Twin Star 7 ‘Serta 2010 2012e 2014e 2016e e = estimate. See Ca
Slide 24: Africa Growth Outlook
FReepont-McMoRan COPPER & GoLD Africa Growth Outlook Copper Production billion Ibs per year 0.3 0.15 Ps l 2009 20i12e 2014e Potential with Potential additional _ with Sulfides oxide e = estimate. See Cautionary Statement. oa
Slide 25: Exploration Targets in Major Mineral Districts
FReepont-McMoRan rere cee Exploration Targets in Major Mineral Districts $275 million in 2012e 16% Indonesia Note: FCX’s consolidated share; e = estimate. See Cautionary Statement. 2
Slide 26: 2012 Outlook
FrReepont-McMoRan COPPER & GOLD 2012 Outlook > Sales Outlook: © Copper: 3.7 Billion Ibs. ¢ Gold: 1.1 Million ozs. ¢ Molybdenum: 81 Million Ibs. > Unit Net Cash Cost: ¢ $1.43/Ibin 2012e e Reflects Impact of Lower Volumes at Grasberg ¢ Costs in Future Years Expected to Decline with Higher Volumes > Op
Slide 27: Near-Term Sales Profile
FrReepont-McMoRan COPPER & GOLD Near-Term Sales Profile Copper Sales (billion Ibs) 5.0+ as 43 2011 2012e 2013e 2014e Indudes Projects ‘Currently Under Way* “Water Consaleare eapoer sales include approximately 717 mm bs in 2011, 720 mmibs in 20128 25 mm bs in 2013, and 775 mmm bs in 20140 for noncont
Slide 28: 2012e Quarterly Payable Metal Sales
FrReepont-McMoRan COPPER & GOLD 2012e Quarterly Payable Metal Sales Co, 1,250 1,000 827 750 500 250 2Q12e 3Q12e 4Q12e Incl sporaataly 158 mm isin 1Q42, 177 mm lin 20128, 195 mmibs in 40420 fer noncontoling itsresy excludes 2 = estimate, See Cautionary Statement. 500 BE 288 305 295 250 5 125 o + 2Q12
Slide 29: 2012 Operating Estimates
FrReepont-McMoRan COPPER & GOLD 2012 Operating Estimates 2012e Unit Production Costs North South id of (eet pound of copes) America America Indonesia _Africa Consolidated Cash Unit Costs Site Production & Delivery 2 = $1.92 $1.58 $2.98 $1.50 $2.00 By-product Credits (0.35) (0.30) (2.20) (0.45) (0.74
Slide 30: Reconciliation of Unit Cash Costs
FReepont-McMoRan COPPER & GOLD Reconciliation of Unit Cash Costs 7/7 Consolidated ¢ per Ib of copper 2011 101¢ Grasberg (a) 24 North America (b) 10 South America (c) 8 Total 42 2012e 143¢ Impact of Higher 2013e/2014e Grasberg Volumes (24¢) With Higher Grasberg Volumes 119¢ (@) lower volumes (copper
Slide 31: EBITDA and Cash Flow
FrReepont-McMoRan COPPER & GOLD EBITDA and Cash Flow at Various Copper Prices Average EBITDA* ($1,200 Gold & $12 Molybdenum) $12 9 $6 $3 $0 (Uss billions) Cu $3.00/Ib Cu $3.50/Ib Cu $4.00/Ib Average Operating Cash Flow (excluding Working Capital changes)* ($1,200 Gold & $12 Molybdenum) $10 $8 $6 $4
Slide 32: Sensitivities
FrReepont-McMoRan COPPER & GOLD Sensitivities Operating Change EBITDA Cash Flow (USS milfions) Copper: -/+ $0.10/Ib $410 $280 Molybdenum: -/+ $1.00/Ib $80 $65 Gold: -/+ $50/ounce $80 $50 Diesel: -/+ 10% $100 $70 Purchased Power”: -/+ 10% $50 $40 Currencies@: +/- 10% $155 $115 @ $3 7ifpalon base case
Slide 33: Capital Expenditures
FrReepont-McMoRan COPPER & GOLD Capital Expenditures i Major Projects HAI Other (Uss billions) $54 $4.3 $4.2 $4] ica $2.5 $2] $15 $05 2011 2012e 2013e (2) Capitalexpenditure estimates indude projectsin progress. Project spending wil continue to be reviewedand revised subject to market conditons. Exc
Slide 34: Balance Sheet
FrReepont-McMoRan COPPER & GOLD Balance Sheet (US$ billions) = Significant Liquidity $20 = Strong Credit Metrics = Investment Grade Rated $15 4 by S&P, Moody’s, Fitch $10 Total Debt $5 5 eof PD Acq! 12/31/08 3/31/12 March 2007 5 Moody’s B2 S&P Bt Fitch BB- (2) Pro Forma year-end 2006 total debt of $
Slide 35: Debt Refinancing
FrReepont-McMoRan COPPER & GOLD Debt Refinancing = Issued $3.0 Billion of New Notes on February 13, 2012 with Weighted Average Interest Rate of 3% * $0.5 Billion of 1.4% Senior Notes Due February 2015 - $0.5 Billion of 2.15% Senior Notes Due March 2017 + $2.0 Billion of 3.55% Senior Notes Due March
Slide 36: Financial Policy
FrReepont-McMoRan COPPER & GOLD Financial Policy = Maintain Strong Balance Sheet & Liquidity Position = Invest in Attractive Growth Projects = Board Action Increased Common Stock Dividend Rate: $1.25/Share per Annum = Board to Review Financial Policy on an Ongoing Basis
Slide 37: FCX Investment Summary
FrReepont-McMoRan COPPER & GOLD FCX Investment Summary 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 Significa
Slide 38: Reference Slides
Reference Slides
Slide 39: PT-FI Mine Plan
FReepont-McMoRan Eoeeen Boxe PT-FI Mine Plan PT-FI‘s Share of Metal Sales, 2012e-2016e Total: 5.8 billion Ibs copper Z Copper, billion Ibs 2012e — 2016¢ PT-FI Share | Annual Average: 1.16 billion Ibs | L = Gold, million ozs 2012e — 2016e PT-FI Share Total: 8.3 million ozs gold Annual Average: 1.66 m
Slide 40: Grasberg Open Pit
|FREEPoRT-McMoRAN Copren s Gown Ss Grasberg Open Pit
Slide 41: Mining Sequence in 2012
FReepont-McMoRan |CopPER & GOLD Mining Sequence in 2012 Copper Equivalent Cross Section MMM MMMM 8E and 9N are the Primary Ore Pushbacks in 2012 Legend: Mm 0.25 - 0.99% CuEq Mm 1.00 - 1.99% CuEq 2.00 - 2.99% CuEq >3.00% CuEq 41
Slide 42: Mining Sequence in 2012
FReepont-McMoRan |CopPER & GOLD Mining Sequence in 2012 Copper Equivalent Cross Section MMM MMMM 8E and 9N are the Primary Ore Pushbacks in 2012 Grasberg Plan View Legend: Mm 0.25 - 0.99% CuEq Mm 1.00 - 1.99% CuEq 2.00 - 2.99% CuEq >3.00% CuEq a2
Slide 43: Mining Sequence in 2012
FReepont-McMoRan |CopPER & GOLD Mining Sequence in 2012 Copper Equivalent Cross Section MMM MMMM 8E and 9N are the Primary Ore Pushbacks in 2012 Legend: Mm 0.25 - 0.99% CuEq Mm 1.00 - 1.99% CuEq 2.00 - 2.99% CuEq >3.00% CuEq a3
Slide 44: Mining Sequence in 2012
FReepont-McMoRan |CopPER & GOLD Mining Sequence in 2012 Copper Equivalent Cross Section ti / MM MMMM 8E and 9N are the Primary Ore Pushbacks in 2012 Legend: Mm 0.25 - 0.99% CuEq Mm 1.00 - 1.99% CuEq 2.00 - 2.99% CuEq >3.00% CuEq
Slide 45: Mining Sequence in 2013
FReepont-McMoRan |CopPER & GOLD Mining Sequence in 2013 Copper Equivalent Cross Section MMM MMMM A 9N and 9S are the Primary Ore Pushbacks in 2013 Grasberg Plan View Legend: Mm 0.25 - 0.99% CuEq Mm 1.00 - 1.99% CuEq 2.00 - 2.99% CuEq >3.00% CuEq 45
Slide 46: Mining Sequence in 2014
FReepont-McMoRan |CopPER & GOLD Mining Sequence in 2014 Copper Equivalent Cross Section MMM MMMM A 9N and 9S are the Primary Ore Pushbacks in 2014 Grasberg Plan View Legend: Mm 0.25 - 0.99% CuEq Mm 1.00 - 1.99% CuEq 2.00 - 2.99% CuEq >3.00% CuEq
Slide 47: Mining Sequence in 2015
FReepont-McMoRan |CopPER & GOLD Mining Sequence in 2015 Copper Equivalent Cross Section MMM MMMM 9S is the Primary Ore Pushback in 2015 Grasberg Plan View Legend: Mm 0.25 - 0.99% CuEq Mm 1.00 - 1.99% CuEq 2.00 - 2.99% CuEq >3.00% CuEq a7
Slide 48: Mining Sequence in 2016
FReepont-McMoRan |CopPER & GOLD Mining Sequence in 2016 Copper Equivalent Cross Section ti / MM MMMM 9S is the Primary Ore Pushback in 2016 Grasberg Plan View Legend: Mm 0.25 - 0.99% CuEq Mm 1.00 - 1.99% CuEq 2.00 - 2.99% CuEq >3.00% CuEq
Freeport Mcmoran Copper & Gold — Q1 2012 Earnings Presentation on 6ix