Freeport-McMoRan, Inc.

Ladies and gentlemen, thank you for standing by. Welcome to the Freeport-McMoran fourth quarter conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. If you wish to ask a question during the Q&A session, press star 1 on your touchtone phone. If you require assistance during the conference, please press star 0. I would now like to turn the conference over to Ms. Kathleen Quirk, President. Please go ahead, ma'am.

Thank you and good morning. Welcome to the Freeport-McMoran conference call and happy 2023 to everyone. Earlier this morning, we reported fourth quarter 2022 operating and financial results and a copy of our press release and slides are available on our website at fcx.com. Our conference call today is being broadcast live on the internet. and anyone may listen to the call by accessing our website homepage and clicking on the webcast link for the conference call. In addition to analysts and investors, the financial press has been invited to listen to today's call, and a replay of the webcast will be available on our website later today. Before we begin our comments, we'd like to remind everyone that today's press release and certain of our comments on the call include forward-looking statements, and actual results may differ materially. I'd like to refer everyone to the cautionary language included in our press release and presentation materials and to the risk factors described in our SEC filings. On the call today with me are Richard Atterson, our Chairman of the Board and Chief Executive Officer, Marie Robertson, our CFO, Mark Johnson, our Chief Operating Officer of Indonesia, Josh Olmstead, who is our Chief Operating Officer for the Americas. Mike Kendrick, who leads our molybdenum business. Corey Stevens, who heads our engineering and construction and overall global technical services group. Rick Coleman, who is actively involved in all of our construction projects, as well as Steve Higgins, our Chief Administrative Officer. full complement of management team here today. And we'll start, Richard will make some opening remarks and then he'll turn it back to me and we'll cover the slide materials and then we'll open up the call for your questions. Turn it to you, Richard.

Yes, thanks, Kathleen. Thank you all for joining us today. As Kathleen said, after my Overview remarks which will be brief. She will review our results for the quarter It was a strong fourth quarter the numbers speak for themselves It reflects the performance of our global team much appreciate everybody's hard work I Read one of you said this morning in a report mining is a tough business and it certainly is nobody knows that I think better than me but what we've done is and is reflected in our results for 2022, and particularly the fourth quarter, is remarkable. Most of you who know our business, and maybe all of you do, recognize the need to look at Freeport in the two major segments. Our operations in Indonesia by PT Freeport Indonesia is characterized by very large volumes, very low cost because of the grades and the goal content, largest gold mine in the world as a byproduct. As you'll see in the fourth quarter, it operated as the world's second largest copper mine with a net unit cost of six cents a pound. Our business in America is quite different. We have among the largest mines in the world, the mines have low grades. There's much more material to be processed. to be mined and processed to recover the copper. And it's an operation that gets challenged by low copper prices and factors like inflation. But when you look at the results and what our team has done this year, it's been very positive. It's also characterized by having some large future brownfield expansion opportunities which is particularly meaningful given the situation of the copper in the world. Indonesia, it was just rock solid performance. We've been operating underground there for 40 plus years now. We've been investing in the current underground operations that we have been ramping up over the past three years to become the largest underground mining operations in the world for the past 25 years. It just reflects the long-term nature of our business. The last three years have really been notable. We completed mining the Grassburg open pit, which had been the bulk of our operations since the discovery of the ore body in the late 1980s. We completed mining that pit at the end of 2019. Then, early in 2020, we faced COVID. And for years, this transition was viewed as a risk overlying Freeport's business. And it's just a major accomplishment that we've reached our targeted mining and metal production targets. That is what's arguably the most complicated mine in the world. And it's all results of the hard work and accomplishments of our team there. Very proud of them. America's business has done very well in meeting the challenges that we've had there, dealing with inflation, dealing with a period of low copper prices. We have issues that are challenged in terms of getting workers for our operations in the Americas. Our operation in Peru was facing a severe challenge with COVID that they managed very well. The political situation in Peru right now is very complicated. There are protests throughout the country. Our team is doing very well. We're continuing to manage housing, feeding our people, and continuing our operations. We're slowing down a bit to make sure we have supplies for the long run, but we have support by our workforce and fundamental support for our business by the local community there because we've established such a such a great relationship with them. So we are, as we look out now, trying to predict short-term profit prices is very difficult. We actually don't even try to do it ourselves. We deal with short-term negative movements when they occur by having a strong balance sheet and a conservative financial policy. It's actually good to see right now that market sentiment going into 2024 is much improved over the end of going into the fourth quarter. But, you know, we are on the outlook for the well-known risks that the world faces today. We're prepared to deal with it. We are a long-term business. And everything we do is focused not on the short run other than to protect ourselves by having the strong balance sheet. managing our business in the right way. But our success is going to be measured over the long run. And copper's long run outlook is increasingly positive based on fundamentals of demand and supply. We committed to copper 20 years ago when we were a single asset company. The rationale for acquiring Phelps Dodge more than 15 years ago is being reinforced today by the combination of this really special mine we have in Indonesia and the global operations and growing operations that we have in the Americas. It was the right decision 20 years ago to focus on copper and it's the right decision now. Kathleen?