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Global Metals Mining & Steel Conference – Freeport-Mcmoran Inc.

Freeport-Mcmoran Inc. · May 14, 2013 · 32 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. Global Metals Mining & Steel Conference – Freeport-Mcmoran Inc. – slide 1
    EXPANDING RESOURCES Global Metals, Mining & Steel Conference 2013 Barcelona Richard C. Adkerson President & CEO May 14, 2013 www.fcx.com
  2. Global Metals Mining & Steel Conference – Freeport-Mcmoran Inc. – slide 2
    EXPANDING RESOURCES Additional Information About the Pending Transactions and Where to Find It PXP Transaction In connection with the proposed transaction, FCX has filed with the SEC a registration statement on Form S-4 that includes…
  3. Global Metals Mining & Steel Conference – Freeport-Mcmoran Inc. – slide 3
    EXPANDING RESOURCES Expanding Resources 2012 Annual Report Highlights Established, Long-Lived Reserves Geographically Diverse AR Low Costs/Strong Margins COVER Growing Production/Cash Flow Profile Asset Base to Strengthen…
  4. Global Metals Mining & Steel Conference – Freeport-Mcmoran Inc. – slide 4
    EXPANDING RESOURCES Key Strengths Operational Excellence Track Record for Reserve Additions Brownfield Development & Organic Growth Opportunities World Class Assets with Exposure to Supply Constrained Markets Disciplined…
  5. Global Metals Mining & Steel Conference – Freeport-Mcmoran Inc. – slide 5
    EXPANDING RESOURCES 1Q13 Highlights Strong Operating Performance Globally Productivity Improvements at Grasberg Advanced Brownfield Development Projects - Completed Second Phase Expansion at Tenke - Advancing Morenci Mill…
  6. Global Metals Mining & Steel Conference – Freeport-Mcmoran Inc. – slide 6
    EXPANDING RESOURCES Pending Oil & Gas Acquisitions Good Strategic Fit High Quality U.S. Focused Assets - Strong Oil Margins & Hedge Protected Cash Flows - Financially Attractive & Complimentary Growth Profile - Attractive…
  7. Global Metals Mining & Steel Conference – Freeport-Mcmoran Inc. – slide 7
    EXPANDING RESOURCES Reasons for PXP Shareholders to Support Transaction Negotiated Terms Offer Significant Premium to PXP Standalone Values Terms Incorporated Significant Potential Exploration/Development Upside PXP…
  8. Global Metals Mining & Steel Conference – Freeport-Mcmoran Inc. – slide 8
    EXPANDING RESOURCES Enhanced Commodity Exposure to Long-term Global Growth Trends Emerging Market Growth and Urbanization Will Continue to Drive Commodity Demand Global Energy Consumption Expected to Grow by 30% by 2035 (1) Global…
  9. Global Metals Mining & Steel Conference – Freeport-Mcmoran Inc. – slide 9
    EXPANDING RESOURCES Enhanced Geographic & Commodity Diversification Pro Forma 2013e EBITDA (1) North Mining America 74% EBITDA Margin: 48% South America Mining: 50% 21% Oil & Gas: 75% Oil & Gas Africa Indonesia 26% 8%…
  10. Global Metals Mining & Steel Conference – Freeport-Mcmoran Inc. – slide 10
    EXPANDING RESOURCES Worlds Leading Copper Producers Top 10 Copper Producers (2013e) (000 t) 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 Codelco FCX BHP Billiton Xstrata Southern Rio Tinto…
  11. Global Metals Mining & Steel Conference – Freeport-Mcmoran Inc. – slide 11
    EXPANDING RESOURCES FCXs Global Footprint Major Operations & Development Projects North America1 All major mining assets majority-controlled and operated Reserves Cu 38.8 bn lbs Mo 2.69 bn lbs Copper Oil & Gas 688 mm bbls2…
  12. Global Metals Mining & Steel Conference – Freeport-Mcmoran Inc. – slide 12
    EXPANDING RESOURCES Copper Market Commentary China Remains Important Demand Driver - Expect Continued Infrastructure Development and Commodity Intensity - Slower Growth on Larger Base - Growing Copper Concentrate Imports/Lower…
  13. Global Metals Mining & Steel Conference – Freeport-Mcmoran Inc. – slide 13
    EXPANDING RESOURCES World Class Copper Discoveries Are Extremely Rare Recoverable Copper Reserves 2013e Copper Production Million metric tons Thousand metric tons 0 5 10 15 20 25 30 0 200 400 600 800 1000 1200 1979 Escondida -…
  14. Global Metals Mining & Steel Conference – Freeport-Mcmoran Inc. – slide 14
    EXPANDING RESOURCES Brownfield Development Projects +1 Billion Pounds per Annum Increase by 2016 Tenke Phase II Expansion Morenci SO2 Furnace Ball Mill Tenke Phase 2 0.9 Billion* Morenci 1.4 Billion Completed on Time and…
  15. Global Metals Mining & Steel Conference – Freeport-Mcmoran Inc. – slide 15
    EXPANDING RESOURCES Volume Growth with Brownfield Projects in Progress Copper (billion lbs per year) 2015e-2020e v. 2012 5.0+ +15%+ 4.4 SA +20% NA 3.65 Africa Indonesia Indonesia Africa Brownfield Projects South America…
  16. Global Metals Mining & Steel Conference – Freeport-Mcmoran Inc. – slide 16
    EXPANDING RESOURCES Growing Production Profile Gold Sales (million ozs) Copper Sales (billion lbs) 2 1.8 1.8 5.0+ 1.4 5 1.0 1 4.5 4.3 4 0 3.65 2012 ____________________ 2013e 2014e 2015e Note: Consolidated gold sales…
  17. Global Metals Mining & Steel Conference – Freeport-Mcmoran Inc. – slide 17
    EXPANDING RESOURCES FCX Pro forma (1) EBITDA, Cash Flows & Capital Expenditures EBITDA Operating Cash Flow* CAPEX 25 20 45% 15 Increase 2015/ billions 2016 45% Avg. 2015/ Increase 10 2016 Avg. O&G 2013/ 40%…
  18. Global Metals Mining & Steel Conference – Freeport-Mcmoran Inc. – slide 18
    EXPANDING RESOURCES Oil & Gas Cash Flows Targeted to be Self-funding Operating Cash Flow CAPEX (US billions) 4.0 3.0 2.0 1.0 0.0 2013e 2014e 2015e NOTE: Assumes pricing of 100/bbl Brent crude for oil and…
  19. Global Metals Mining & Steel Conference – Freeport-Mcmoran Inc. – slide 19
    EXPANDING RESOURCES Significant Debt Reduction Year-End Net Debt at Varying Copper Prices (US billions) 20 Target: 12 Billion 16.0 15 10 7.7 5 2.0 0 (3.5) -5 12/31/12 13-16 Avg. Copper Price 3.00 3.50 4.00 Pro…
  20. Global Metals Mining & Steel Conference – Freeport-Mcmoran Inc. – slide 20
    EXPANDING RESOURCES Phelps Dodge Case Study 26 Billion Acquisition in 2007 Rapid Delevering Highly Successful Transformational Transaction ( in bns) Asset & Geographic 20 Diversification 17.6 Significant Reserve Additions…
  21. Global Metals Mining & Steel Conference – Freeport-Mcmoran Inc. – slide 21
    EXPANDING RESOURCES Financial Policy Maintain Strong Balance Sheet & Liquidity Position Reduce Debt Incurred for Pending Acquisitions Using Projected Substantial Cash Flows Generated from Combined Business Invest in Projects…
  22. Global Metals Mining & Steel Conference – Freeport-Mcmoran Inc. – slide 22
    EXPANDING RESOURCES Long Track Record of Generating Value for Shareholders Exploration & History of Prudent Capital Solid Financial Allocation & Opportunistic Development Performance Acquisitions Grasberg Discovery & Financial…
  23. Global Metals Mining & Steel Conference – Freeport-Mcmoran Inc. – slide 23
    EXPANDING RESOURCES EXPANDING RESOURCES Reference Slides
  24. Global Metals Mining & Steel Conference – Freeport-Mcmoran Inc. – slide 24
    EXPANDING RESOURCES Grasberg Underground Development To date, completed 80 km of development Grasberg open pit in Grasberg BC & 53 km in DMLZ Tracking start-up schedule Grasberg Block Cave Current activities include work on…
  25. Global Metals Mining & Steel Conference – Freeport-Mcmoran Inc. – slide 25
    EXPANDING RESOURCES Update on Grasberg Unusually low metal production in 2012 compared with historical levels Lower grades in Grasberg open pit DOZ ramp-up: panel repairs more extensive expect 80K t/d by year- end 2013; current…
  26. Global Metals Mining & Steel Conference – Freeport-Mcmoran Inc. – slide 26
    EXPANDING RESOURCES Copper Reserves & Mineralized Material as of 12/31/12 billion lbs of copper 12/31/12 230 Mineralized Material (b) by Geographical Region Mineralized 113 Material (b) billion (contained copper) lbs North 117…
  27. Global Metals Mining & Steel Conference – Freeport-Mcmoran Inc. – slide 27
    EXPANDING RESOURCES Highly Attractive Brownfield Copper Development Projects Expansion Projects in Progress North America* Mill Expansions (t/d) Incr. Cu (mm lbs/yr) Capital* Achieve ( blns) Full Rates Morenci Expansion Cerro…
  28. Global Metals Mining & Steel Conference – Freeport-Mcmoran Inc. – slide 28
    EXPANDING RESOURCES 2013e Operating Estimates 2013e Unit Production Costs (per pound of copper) North South America America Indonesia Africa Consolidated (3) Cash Unit Costs (1) Site Production & Delivery (2) 2.03 1.57 2.32 1.41…
  29. Global Metals Mining & Steel Conference – Freeport-Mcmoran Inc. – slide 29
    EXPANDING RESOURCES 2013e Oil & Gas Operating Estimates Rocky Mtns. & Operating Cost: 1.65/Mcfe California Haynesville Pricing: NYMEX Operating Cost: 27/bbl Pricing: Brent Based Gulf of Mexico Shelf/ Deepwater Operating Cost:…
  30. Global Metals Mining & Steel Conference – Freeport-Mcmoran Inc. – slide 30
    EXPANDING RESOURCES Oil & Natural Gas Hedging Positions Oil Indexed to Brent 2013 2014 2015 Puts Collars 25k bbls/d 5k bbls/d 75k bbls/d 30k bbls/d Swaps 90 floor 95 floor 100 floor 90 floor 40k bbls/d 80 limit 70 limit 70…
  31. Global Metals Mining & Steel Conference – Freeport-Mcmoran Inc. – slide 31
    EXPANDING RESOURCES Energy A Significant Component of Mining Cost Site Operating Costs by Category Components of Energy (Consolidated) (Total of 1.6 Billion) Purchased Materials Power Manpower 32% 6,800 GWh 29% Diesel 35%…
  32. Global Metals Mining & Steel Conference – Freeport-Mcmoran Inc. – slide 32
    EXPANDING RESOURCES Sensitivities Operating Change EBITDA Cash Flow (US millions) Copper: -/+ 0.10/lb 405 275 Molybdenum: -/+ 1.00/lb 80 65 Gold: -/+ 50/ounce 75 45 Diesel(1): -/+ 10% 100 75 Purchased Power(2): -/+ 10% 50…

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