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3rd Quarter 2010 Earnings Conference Call – Freeport-Mcmoran Inc.

Freeport-Mcmoran Inc. · Oct 21, 2010 · 41 slides

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Slides

  1. 3rd Quarter 2010 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 1
    3rd Quarter 2010 Earnings Conference Call PROVEN PERFORMANCE SHINING FUTURE October 21, 2010 www.fcx.com
  2. 3rd Quarter 2010 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 2
    3Q10 3Q 0 Highlights g g s Excellent Financial Results Strong Production and Cost Performance Positive Pricing for Key Commodities Taking Steps to Increase Near-term Copper Production Continuing to Advance Future Growth…
  3. 3rd Quarter 2010 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 3
    3Q10 Q Highlights g g Sales Data 3Q10 9 mos. 2010 Copper Consolidated Volumes (mm ( lb lbs)) 1,081 1 081 2,955 2 955 Average Realization (per lb) 3.50 3.33 Site Production & Delivery Unit Costs (per lb) 1.38 1.38 Unit Net Cash…
  4. 3rd Quarter 2010 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 4
    Quarterly Qua e y Operating Ope a g Highlights g g s 3Q10 Unit Production Costs (per pound of copper) North South America America Indonesia Africa Consolidated Cash Unit Costs Site Production & Delivery(1) 1.62 1.16 1.43 1.44 1.38…
  5. 3rd Quarter 2010 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 5
    Strong g Markets 2,000 400 1,750 350 1 500 1,500 LME Copper Price 300 0s 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-…
  6. 3rd Quarter 2010 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 6
    Development Project Update North America Morenci Mill Restart & Ramp-up Mill averaged 31K t/d during 3Q10 & ramping up rates 50K t/d by 2011 Increase Mine Rate Averaged 484K t/d in 3Q10; continue ramp-up ramp up to 635K t/d…
  7. 3rd Quarter 2010 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 7
    Development Project Update North America Miami Mine Restart Began stripping activities in 1Q10; 3Q10 mining rate of 150K t/d Ramp up to 100MM lbs Cu/year by late 2011 40MM project, primarily mining equipment 12/31/09 reserves of…
  8. 3rd Quarter 2010 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 8
    Development Project Update North America Chino Restart Suspended mining & milling activities in late 2008 in response to global economic conditions Currently, producing 35mm lbs Cu/year from residual leaching activities…
  9. 3rd Quarter 2010 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 9
    Development Project Update South America Cerro Verde Expansion Completing C l ti 50MM project j t to t increase i mill ill rate t from f 108K t/d to t 120K t/d 30MM lbs Cu per year of incremental metal at low cash cost…
  10. 3rd Quarter 2010 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 10
    Grasberg Pit Mine Plan October 2010 Final Pit Changes Continue to optimize the ultimate pit; accelerating l i metall from f underground d d to open pit i Plan Changes Mine less Step-in of north wall to balance Final Pit Mine…
  11. 3rd Quarter 2010 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 11
    Long-Term Underground Mine Development in Indonesia Significant undeveloped underground reserves Aggregate A t reserves off 41 billion billi lbs lb Cu C & 35 million illi ozs Au A DOZ expanded to 80K t/d Big Gossan mine full…
  12. 3rd Quarter 2010 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 12
    Tenke Fungurume Sold 73MM lbs Cu & 6MM lbs Co in 3Q10 At full rates (initial phase), phase) aggregate The mill at Tenke has been operating above design capacity annual metal of 250MM lbs Cu & over 18MM lbs Co Mill operated at 12K…
  13. 3rd Quarter 2010 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 13
    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…
  14. 3rd Quarter 2010 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 14
    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…
  15. 3rd Quarter 2010 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 15
    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…
  16. 3rd Quarter 2010 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 16
    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…
  17. 3rd Quarter 2010 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 17
    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…
  18. 3rd Quarter 2010 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 18
    Shining Future Exploration Targets in Major Mineral Districts Safford/Lone Star/Morenci District South North America Exploration p America 25% in 2010e Cerro Verde 32% 120 million Africa 18% Tenke Fungurume/Africa 6%…
  19. 3rd Quarter 2010 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 19
    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…
  20. 3rd Quarter 2010 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 20
    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 ____________________…
  21. 3rd Quarter 2010 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 21
    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:…
  22. 3rd Quarter 2010 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 22
    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…
  23. 3rd Quarter 2010 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 23
    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…
  24. 3rd Quarter 2010 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 24
    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…
  25. 3rd Quarter 2010 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 25
    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)…
  26. 3rd Quarter 2010 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 26
    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…
  27. 3rd Quarter 2010 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 27
    Agreement to Invest 500 Million in McMoRan Exploration Exploration* FCX Tradition of Building Values through Exploration FCX Attracted to Opportunities to Participate in Early Stage Projects that Have Potential to be World…
  28. 3rd Quarter 2010 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 28
    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…
  29. 3rd Quarter 2010 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 29
    FCX Investment Summary y World Worlds s Premier Publicly Traded Copper Company World Worlds s Largest Molybdenum Producer & Significant Gold Producer Long Long-lived lived Reserves, Geographically Diverse Operations…
  30. 3rd Quarter 2010 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 30
    Reference Slides 31
  31. 3rd Quarter 2010 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 31
    PT-FI Mine Plan PT-FIs PT FI s Share of Metal Sales, 2010e 2010e-2015e 2015e 2010e 2015e PT-FI Share Total: 7.2 billion lbs copper Copper, billion lbs Annual Average: 1.2 billion lbs Gold, million ozs 2010e 2015e PT-FI Share…
  32. 3rd Quarter 2010 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 32
    Grasberg Open Pit 9N 8E 9S N 33 33
  33. 3rd Quarter 2010 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 33
    Mining Sequence in 2010 Copper pp Equivalent q Cross Section A B 8E is the Primary Ore Pushback in 2010 Grasberg Plan View 8E B End 7S 2009 A Legend: 0.25 0.50 - 0.99 1.00 0.99% 1.00 - 1.99 1.99% CuEq % Eqq Cu…
  34. 3rd Quarter 2010 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 34
    Mining Sequence in 2010 Copper pp Equivalent q Cross Section A B 8E is the Primary Ore Pushback in 2010 Grasberg Plan View 8E B End 7S 2009 2Q10 A Legend: 0.25 0.50 - 0.99 1.00 0.99% 1.00 - 1.99 1.99% CuEq % Eqq…
  35. 3rd Quarter 2010 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 35
    Mining Sequence in 2010 Copper pp Equivalent q Cross Section A B 8E is the Primary Ore Pushback in 2010 Grasberg Plan View 8E B End 7S 2009 2Q10 A 3Q10 Legend: 0.25 0.50 - 0.99 1.00 0.99% 1.00 - 1.99 1.99% CuEq %…
  36. 3rd Quarter 2010 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 36
    Mining Sequence in 2010 Copper pp Equivalent q Cross Section A B 8E is the Primary Ore Pushback in 2010 Grasberg Plan View 8E B End 7S 2009 2Q10 A 3Q10 Legend: 0.25 0.50 - 0.99 1.00 0.99% CuEq % Eqq Cu 1Q10 4Q10…
  37. 3rd Quarter 2010 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 37
    Mining Sequence in 2011 Copper pp Equivalent q Cross Section A B 8E and 9N are the Primary Ore Pushbacks in 2011 9S 9N* Grasberg Plan View B End 2010 8E A Legend: 0.25 0.50 - 0.99 0.99% CuEq % Eqq Cu 1.00 1.00…
  38. 3rd Quarter 2010 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 38
    Mining Sequence in 2012 Copper pp Equivalent q Cross Section A B 9N is the Primary Ore Pushback in 2012 9S 9N Grasberg Plan View B End 2011 A 8E Legend: 0.25 0.50 - 0.99 0.99% CuEq % Eqq Cu 1.00 1.00 - 1.99…
  39. 3rd Quarter 2010 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 39
    Mining Sequence in 2013 Copper pp Equivalent q Cross Section A B 9N and 9S are the Primary Ore Pushbacks in 2013 9S Grasberg Plan View B 9N End 2012 A Legend: 2013 0.25 0.50 - 0.99 0.99% CuEq % Eqq Cu 1.00 1.00…
  40. 3rd Quarter 2010 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 40
    Mining Sequence in 2014 Copper pp Equivalent q Cross Section A B 9N and 9S are the Primary Ore Pushbacks in 2014 9S Grasberg Plan View B End 2013 A 9N Legend: 0.25 0.50 - 0.99 0.99% CuEq % Eqq Cu 1.00 1.00 -…
  41. 3rd Quarter 2010 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 41
    Grasberg Pit Mine Plan Cross-Sections S North Wall at year-end 2013 N NW Final Pit (2016) SE Step-in & 9N narrower Improved access to high-grade ore in 2014-2016 Current Plan Previous Plan Higher grade ore Not as deep Metal…

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