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3rd Annual Dahlman Rose & Co Global Metals Mining & Materials Conference – Freeport-Mcmoran Inc.

Freeport-Mcmoran Inc. · Nov 14, 2012 · 25 slides

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  1. 3rd Annual Dahlman Rose & Co Global Metals Mining & Materials Conference – Freeport-Mcmoran Inc. – slide 1
    3rd Annual Dahlman Rose & Co. Global Metals, Mining & Materials Conference Richard C. Adkerson President & CEO November 14, 2012 www.fcx.com CONNECTING THE FUTURE
  2. 3rd Annual Dahlman Rose & Co Global Metals Mining & Materials Conference – Freeport-Mcmoran Inc. – slide 2
    Connecting the Future 2011 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…
  3. 3rd Annual Dahlman Rose & Co Global Metals Mining & Materials Conference – Freeport-Mcmoran Inc. – slide 3
    FCXs Global Footprint Major Mine Operations & Development Projects All major assets majority-controlled and operated North America1 Reserves Copper Cu 40.6 bn lbs Mo 2.71 bn lbs Copper/Gold/Silver Sales Molybdenum Cu 1.3 bn lbs…
  4. 3rd Annual Dahlman Rose & Co Global Metals Mining & Materials Conference – Freeport-Mcmoran Inc. – slide 4
    Worlds Leading Copper Producers Top 10 Copper Producers (2012e) (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…
  5. 3rd Annual Dahlman Rose & Co Global Metals Mining & Materials Conference – Freeport-Mcmoran Inc. – slide 5
    Markets 2,500 500 2,000 400 000s Metric Tons Cents Per Pound 1,500 300 LME Copper Price 1,000 200 500 100 Global Exchange Stocks* 0 0 Jan- Jul- Jan- Jul- Jan- Jul- Jan- Jul- Jan- Jul- Jan- Jul- Jan- Jul- Jan- Jul- Jan-…
  6. 3rd Annual Dahlman Rose & Co Global Metals Mining & Materials Conference – Freeport-Mcmoran Inc. – slide 6
    Copper Market Commentary China Remains Important Demand Driver Improving U.S. Copper Demand - Recent Auto and Housing Data Have Been Positive Weak European Demand Global Inventories Remain Relatively Low Ongoing Supply…
  7. 3rd Annual Dahlman Rose & Co Global Metals Mining & Materials Conference – Freeport-Mcmoran Inc. – slide 7
    Value Creation Focus INVESTMENT CASH MINERAL RESERVE IN ATTRACTIVE PRODUCTION FLOWS/ RESOURCES ADDITIONS DEVELOPMENT GROWTH RETURNS PROJECTS FCX Copper Resources at 12/31/2011 (a) Recoverable Reserves 120 bn lbs (b)…
  8. 3rd Annual Dahlman Rose & Co Global Metals Mining & Materials Conference – Freeport-Mcmoran Inc. – slide 8
    Copper Reserves & Mineralized Material as of 12/31/11 billion lbs of copper 12/31/11 235 Mineralized Material (b) by Geographical Region Mineralized 115 Material (b) billion (contained copper) lbs North 120 at 2.20 Cu price…
  9. 3rd Annual Dahlman Rose & Co Global Metals Mining & Materials Conference – Freeport-Mcmoran Inc. – slide 9
    Highly Attractive Brownfield 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 Verde (360K) 600 4.4 2016…
  10. 3rd Annual Dahlman Rose & Co Global Metals Mining & Materials Conference – Freeport-Mcmoran Inc. – slide 10
    Americas Growth Outlook Copper Production billion lbs per year 3.5 Potential Projects under review 2.9 Cerro Verde Expansion 2.6 Morenci 2.4 Expansion Chino Restart Morenci Mill Exp. 2 El Abra 1.5 Ajo Mill bln lbs…
  11. 3rd Annual Dahlman Rose & Co Global Metals Mining & Materials Conference – Freeport-Mcmoran Inc. – slide 11
    Africa Growth Outlook Copper Production billion lbs per year Phase 4 Expansion 0.6 Phase 3 0.4 Oxides Expansion Phase 2 0.3 Expansion 0.15 2009 2012e 2014e Potential with Potential additional with Sulfides oxide e =…
  12. 3rd Annual Dahlman Rose & Co Global Metals Mining & Materials Conference – Freeport-Mcmoran Inc. – slide 12
    Grasberg BC & DMLZ Underground Mine Development Completed significant development on access to underground ore bodies To-date, completed 66 km of development in Grasberg BC Grasberg open pit & 32 km in DMLZ; record development in…
  13. 3rd Annual Dahlman Rose & Co Global Metals Mining & Materials Conference – Freeport-Mcmoran Inc. – slide 13
    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 during 2013; current rate: 50K t/d Mine…
  14. 3rd Annual Dahlman Rose & Co Global Metals Mining & Materials Conference – Freeport-Mcmoran Inc. – slide 14
    Portfolio of World Scale Mines Positive Exploration Results Big Mines Get Bigger Mines with Potential Capacity for 1 billion lbs of copper per annum* Morenci Tenke Grasberg Fungurume Cerro Verde El Abra * Grasberg currently…
  15. 3rd Annual Dahlman Rose & Co Global Metals Mining & Materials Conference – Freeport-Mcmoran Inc. – slide 15
    Climax Molybdenum Start-Up Climax Processing Facilities Construction completed mid-2012 Start-up in March 2012, first moly shipment in 2Q12 Ramp up to 20mm lbs/yr during 2013, subject to market conditions Capacity to increase to…
  16. 3rd Annual Dahlman Rose & Co Global Metals Mining & Materials Conference – Freeport-Mcmoran Inc. – slide 16
    Exploration Targets in Major Mineral Districts 255 million in 2012e North America 30% Australasia 6% South & Other Areas America Indonesia 29% 12% Africa 23% Note: FCXs consolidated share; e = estimate. See Cautionary…
  17. 3rd Annual Dahlman Rose & Co Global Metals Mining & Materials Conference – Freeport-Mcmoran Inc. – slide 17
    2012 Outlook Sales Outlook: Copper: 3.6 Billion lbs. Gold: 1.0 Million ozs. Molybdenum: 82 Million lbs. Unit Net Cash Cost(1): 1.50/lb in 2012e Reflects Impact of Lower Volumes at Grasberg Costs in Future Years Expected to…
  18. 3rd Annual Dahlman Rose & Co Global Metals Mining & Materials Conference – Freeport-Mcmoran Inc. – slide 18
    Near-Term Sales Profile Copper Sales (billion lbs) Gold Sales (million ozs) 5.0+ 2 1.8 5 1.4 1.4 4.5 4.3 1.0 1 4 3.7 3.6 0 2011 2012e 2013e 2014e 3 ____________________ Note: Consolidated gold sales include approximately…
  19. 3rd Annual Dahlman Rose & Co Global Metals Mining & Materials Conference – Freeport-Mcmoran Inc. – slide 19
    2012 Operating Estimates 2012e Unit Production Costs (per pound of copper) North South America America Indonesia Africa Consolidated Cash Unit Costs (1) Site Production & Delivery (2) 1.90 1.61 3.24 1.53 2.03 By-product Credits…
  20. 3rd Annual Dahlman Rose & Co Global Metals Mining & Materials Conference – Freeport-Mcmoran Inc. – slide 20
    Reconciliation of Unit Cash Costs Consolidated per lb of copper 2011 101 Grasberg (a) 28 North America (b) 9 South America (c) 11 Tenke (d) 1 Total 49 2012e 150 Impact of Higher 2013e/2014e Grasberg Volumes (34) With Higher…
  21. 3rd Annual Dahlman Rose & Co Global Metals Mining & Materials Conference – Freeport-Mcmoran Inc. – slide 21
    EBITDA and Cash Flow at Various Copper Prices Average EBITDA* (1,500 Gold & 12 Molybdenum) 18 (US billions) 15 12 50% 9 2015e/2016e Increase Average 6 2013e/2014e 3 Average 0 Cu 3.00/lb Cu 3.50/lb Cu 4.00/lb Average…
  22. 3rd Annual Dahlman Rose & Co Global Metals Mining & Materials Conference – Freeport-Mcmoran Inc. – slide 22
    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% 90 65 Purchased Power(2): -/+ 10% 50 40 Currencies(3): +/- 10%…
  23. 3rd Annual Dahlman Rose & Co Global Metals Mining & Materials Conference – Freeport-Mcmoran Inc. – slide 23
    Capital Expenditures (1) Major Projects All Other (US billions) 5 4.6 4 3.6 1.6 3 2.5 1.4 2 1.1 (3) (3) 3.0 1 (2) 2.2 1.4 0 2011 2012e 2013e (1) Capital expenditure estimates include projects in progress. Project…
  24. 3rd Annual Dahlman Rose & Co Global Metals Mining & Materials Conference – Freeport-Mcmoran Inc. – slide 24
    Financial Policy Maintain Strong Balance Sheet & Liquidity Position Invest in Attractive Growth Projects/Capital Discipline Current Common Stock Dividend Rate: 1.25/Share per Annum Board to Review Financial Policy on an…
  25. 3rd Annual Dahlman Rose & Co Global Metals Mining & Materials Conference – Freeport-Mcmoran Inc. – slide 25
    FCX Investment Summary Worlds Premier Publicly Traded Copper Company Worlds Largest Molybdenum Producer & Significant Gold Producer Long-lived Reserves, Geographically Diverse Operations Strong Near-term and Longer-term Growth…

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