FREEPORT-MCMORAN INC Q4 FY2024 earnings call

Key Points

• Richard Adkerson highlighted supporting new administrations and ongoing work with the Indonesian government, with a 60-year history of operating in the country.
• Kathleen Quirk reviewed 2024 performance: EBITDA up 14%, operating cash flows up 35%. Priorities for 2025 include strong execution of plans, scaling reach to a £300 million run rate by end of 2025 and £800 million by 2030, recovery of the PTFI smelter, focus on innovation, and building the growth portfolio.
• Discussed copper market trends, with prices trading in a broad range in 2024, and demand growth supported by electrification. Progress in projects like autonomous haul trucks at Baghdad, incremental leach initiatives, and brownfield expansions in the U.S. and Indonesia.

In 2024, Freeport achieved $10 billion in EBITDA, which was 14% above 2023. Operating cash flows were over $7 billion, a 35% improvement from the prior year. Copper sales were significant, with an average realization of $4.15 per pound on the LME and slightly higher on the U.S. COMEX. Gold realization was slightly above $2,400 per ounce. In the U.S., the goal is to make 2024 the low watermark year for the business with plans to increase production. South America's Cerro Verde operation had strong operating rates and cost management. Indonesia's Grasberg achieved multiple operating records in 2024, and the smelter recovery was in progress.

Forward-Looking Statements

• Copper guidance for 2025 adjusted by ~5% due to mill maintenance in Indonesia. Gold estimates for 2025 are about 7% higher. CapEx for 2025 and 2026 is approximately $4.4 billion per year. Modelled EBITDA ranges from over $11 billion at $4 copper to over $15 billion at $5 copper. Operating cash flows range from nearly $8 billion at $4 copper to over $11 billion at $5 copper.

Risks

• Geopolitical risks in Indonesia, including uncertainties around export approvals and license extensions.
• Market risks related to copper price fluctuations, macroeconomic conditions, and trade policies.
• Operational risks such as smelter fire recovery challenges and mill maintenance impacts on production volumes.

Q: On export approval from Indonesia, when in Q1?

A: We're making good progress with the government, expect approval in the near term. Inventories are building but export permit will help bring them down.

Q: Tax credit for copper as critical mineral?

A: Pending legislation, bipartisan support, but timing uncertain. Could be a significant benefit if enacted.

Q: CapEx for smelter repair?

A: The repair cost is estimated at approximately $100 million, covered by insurance.