Hi, good morning, everyone, welcome to Citi's 2021 Basic Materials Conference. I'm Alex Hacking, our U.S. Metals and Mining Analyst. Very happy to be joined this morning by Kathleen Quirk, who is the President and CFO of Freeport-McMoRan. I'm sure you all know, but Freeport-McMoRan is the largest private copper company in the world, with mines in U.S., South America, Indonesia. Thanks for joining us this morning, Kathleen. I'll start with a sort of very broad question/statement. Is this sort of the best moment for Freeport-McMoRan in the last 10 years, given the combination of the copper outlook, the successful ramp-up of Grasberg and the strength of the balance sheet? Yeah. Well, it's clearly a great time, Alex, for Freeport-McMoRan, thanks for hosting this conference, by the way. We're in a terrific position, as you referenced, with the copper market, as a leading producer of copper with very significant reserves and production capacity, a very great pipeline for future growth embedded in the company. We've done a terrific job over the last several years in executing our plan. It's all been all about execution for us. We've proven our resilience. We've faced ups and downs, but we're really in a great position as we close out 2021 and enter 2022. You referenced the balance sheet. We've made incredible progress with the balance sheet, now in a position where we're returning substantial cash flows to shareholders. You referenced the Grasberg underground ramp up. Just credit goes out to our team there. We've been planning that for 15, 20 years or more, they've just executed masterfully through the pandemic. We're now producing very large scale production at very low cost there. Our team throughout the globe has done really well in managing costs in a difficult environment, bringing back production after the pandemic and keeping everybody safe. Really good. While these are great times for Freeport-McMoRan currently, we really do believe our best years are ahead. You referenced the copper markets. Fundamentally, we believe copper is very well-placed. We've got a situation where we're entering a new era of copper demand, which includes the massive amounts of copper that's used in decarbonization. That transition is really just starting. We've got really strong growth in demand expectations and locally limitations on supply, and I'm sure we'll get more into that situation. Really pleased with where Freeport-McMoRan is and our strategy of being foremost in copper. Okay, thanks, Kathleen. I guess more specifically on the copper price, how do you see the copper price heading into next year? I think investors have some concerns around what's happened in the Chinese property market, but we can see that inventory is still very low. Maybe just your thoughts on copper for next year. Thank you. Yeah, I think you just hit it. We're in a situation now where inventories are at multi-year lows and multi-decade lows in some areas. You're seeing GDP growth come back from the pandemic. As I mentioned, we're really just getting started on this decarbonization. The adoption of electric vehicles continues to expand. We see that as a big growth market for copper, and then just ongoing growth in the economies as we recover from the pandemic. The neat thing about where we sit right now in copper markets is over the last 10 or 15 years, most of the growth has come from China. As we look forward, we see demand growth being much broader based, coming from all over the world. The decarbonization is going on globally. Really, as we look forward to seeing broad-based global demand growth and limitations on supply, there are some projects that are in the pipeline, that are coming online. Grasberg has been ramping up. There are some projects in Chile and Peru and the DRC. As you look forward, there's really not enough copper supply in the pipeline. As you know, Alex, it takes five, 10 years and sometimes longer to bring on new supply. We're really in a great position fundamentally, for copper. Of course, there'll be ups and downs associated with people's concerns about what's going on in China's property sector or whatever might be the headline. Really underlying that is you look at the physical markets, the fundamentals of the market, and copper is really well-positioned as we go into next year. Thanks. I guess, does Freeport have any view on how many new tons are we going to need over the next five to 10 years? Yeah. Well, there are a lot of estimates out there, and the common theme is a lot more. I think, consensus around something on the order of 5 million tons of copper demand over the next 10 years is going to be needed, or copper supply is going to be needed. Sid has talked about this call on scrap. There is substantial amount of copper demand associated with the decarbonization. I think you guys estimate 70% of the growth in copper demand is coming from decarbonization. If you think about 5 million tons of copper, that's sizable. You look at the top 10 mines, producing mines, and you'd need to have that much more production coming in, which really is just very difficult to see that happening. There are going to have to be other things. We're going to have to be very innovative, and Freeport's working on that. We're working to get more out of the assets that we have, working on leach recoveries. We're working on de-bottlenecking. Everything that we can do to improve supply. Big, major projects are very challenging in this environment, take years, and there's really a limitation of what's in the pipeline. Okay, thanks. Yeah. Building 1 500,000 ton a year mine a year is or 2 250,000 ton a year mines a year is not an easy task. Yeah. I guess turning a little bit to the company. Could you maybe give us an update on how the underground is coming at Grasberg and the expectations for next year? Is that project fully de-risked at this point, in your view? Or is there still some lingering operational risk? Well, as I mentioned, the team has just done an incredible job in ramping up the production. The execution has been extremely positive as we've gone through 2020. As you remember, we stopped mining from the surface at the end of 2019, we were ramping up the underground in the midst of the pandemic. If you've seen the results, each quarter, we've built that production profile, and as each quarter has gone by, we have de-risked the project in a significant way. There'll always be risk in mining. I think you understand that, Alex. Underground mining has its own characteristics. The major risks that we faced in ramping up these very large-scale mines that really have not been done at this scale globally, are behind us. As we go forward, we're going to continue to execute. We've got a new SAG mill that we're putting in 2023 timeframe. During 2022, we'll be pretty much steady state as to the ore throughput rates of where we were at the end of the third quarter. That's a very significant amount of metal that we're producing. The team's done an outstanding job in planning, and that's been a big part of this. As I mentioned, we've been planning for this since the mid-'90s and actually started investing in the underground infrastructure in 2003. It's a long lead time project. It was planned exceptionally well, and it's being executed in an outstanding fashion. While we understand there's risks, and we try to plan and mitigate risks, we'll face challenges. We've got a great team out there, supported by a great technical team at our headquarters, and we feel very good, and the government feels very good about how we've executed to date and the outlook as we go forward. Thanks. I guess could you just maybe touch on a little bit, the relationship with the local partners and the government? It seems like everything is very positive at the moment, that you worked through some of the challenges over the past few years. Yeah. Well, this agreement that we reached with the government at the end of 2018, to extend our operating rights and restructure the ownership when the government bought Rio Tinto's interest, has gone extremely well. What's really been positive about the new arrangement is this very strong alignment between FCX and the government of Indonesia. The government now owns 51% of PTFI, a subsidiary, and FCX controls the operation through a management committee, operating committee. It's been just really good. We've had great rapport, great cooperation between the parties. The team at PTFI is focused on maximizing the value of the interest of PTFI. We're just operating according to our agreement. It took many years, as you know, to get to an agreement, but we really put together an agreement that's a win-win for the investors and for the people of Indonesia, and it's being executed very well. The president just attended the inauguration ceremony for the smelter, and we've just started groundbreaking there, and that was one of our commitments associated with our agreement in 2018. The partnership is very strong. I would say our relationship with the government of Indonesia is stronger than it's ever been, and it gets back to this alignment of interests. Okay, thanks. Turning to South America, I think most of the headlines recently have been around political noise. I guess starting with Peru, any comments around how you're viewing Peru under the new regime, the potential there for higher taxation? Thanks. Well, we operate one of the largest concentrators in the world at our mine in Cerro Verde, located in Arequipa, which is the second-largest city in Peru. We've had a long history of successful operations there. One of the things that we've done over the years, over many years in Peru, is really strengthen partnerships with the local community. In many cases, we've done that voluntarily. That's one of the things that's really helped us in Peru, is to have this strong partnership with the local community. We make significant investments in the local community. As you probably know, when we did our expansion in 2015, we put in a water treatment facility that is providing clean water to the city, which is a great asset for that community. We haven't had the types of issues from a social standpoint that some other mining companies have had in Peru that are operating in different areas. We'll have our challenges, we know, and there'll be aspirations that the community has, and we'll have to find balances. We've really focused our political risk mitigation there on partnering with the local community, and that's proven to serve us well. In terms of the new administration there, we're listening. We don't have any expected changes to our taxation at this point in time. We want to find ways to support the agenda of the administration to the extent that we and others in the mining industry can support education in Peru and help bringing more education across the country. We're just, right now, just in execution mode and listening to the aspirations and trying to figure out how we can be responsive to those. At this point in time, we have a stability agreement in Peru. There's no indication that the government will want to change that at this point. As we operate all over the world, we have to be an integral part of that discussion, and we have to operate in any political environment. We're a good corporate citizen there. The jobs that we provide in Peru are very significant. We talk about copper prices, and copper prices really benefit our workers there. There's a profit-sharing mechanism that they benefit from. It's a good situation. Of course, we're watching all the headlines. In terms of our operations there, it continues to go very well. Okay, thanks. Just on Chile with El Abra, any views there on how the tax situation is going to evolve? I know there's a lot of moving parts. Yeah. Any thoughts? Thank you. Yeah. There are a lot of moving parts there. El Abra, unlike Cerro Verde, which is a significant part of our overall asset base and cash flow currently, El Abra currently is relatively small relative to the size of FCX. We do have a very attractive investment opportunity at El Abra that we have been planning for some time now. We're continuing to follow what's going on there, to follow the constitutional process, the discussion going on about the royalties there, and also following the election process. As you know, the Chile copper and Chile are partners where copper production from Chile is like 25% of the global copper supply. It's an important part of the overall Chilean economy. I do believe that there will be a resolution that will be workable between the government and the copper miners, which provide substantial financial benefits to the country and have for some time now. We're watching the situation. We're monitoring it. We're not making any big investment commitment to that project currently. We're keeping it warm in terms of making plans, we're going to wait and see. I think there'll be some more clarity as we look into 2022, and we'll be able to make a decision from that point. I do believe that Chile will continue to be an important supplier of global copper as we go forward. Okay, thanks. Yeah. I guess the El Abra project is a case study on the potential impact of taxes in Chile. Then just on the U.S. side, could you maybe give us an update on the ramp-up of the Lone Star project? Thanks. Well, Lone Star, located in Eastern Arizona, is our newest mine. We brought it online in 2020. It is near the Morenci mine, which is the largest mine in North America. We're real excited about Lone Star. When you look at the potential there, we've identified resource potential of 50 billion pounds of copper, which is like 10 times what the current reserve is. The future prospects are very favorable for development at Lone Star over time. We brought on the mine, initially producing from the oxide cap. The big potential is underneath the oxide cap. We brought that online. It was originally designed to produce 200 million pounds a year. We're currently in the 250 million pounds a year range. It's operating 25% above its design capacity. We've got a further increment, that we're evaluating, fairly low capital intensity to get to 300 million pounds a year. What that does is allows us to make profitable investments to increase the current capacity, but it also involves increasing the mining rates so that we can access the longer-term opportunity more quickly. It still takes time, probably to get to the major project there, we're probably 10 years out. We do see a real opportunity there for Lone Star to be a large producing asset in the U.S. You've seen many companies in the mining industry have trouble getting permits or trust from the communities in operating in the U.S. Freeport has a really strong franchise in the U.S. and trust from the communities. This is an established mining area where we do have community support. It's got all the right characteristics. It's relatively low grade when you look at a project in the DRC or another place, like our mine in Indonesia. The risks are substantially lower, and we see this mine potentially becoming a cornerstone asset for us in the U.S., where we have an established position and a great operating franchise. Elsewhere in the U.S., we are looking at our Bagdad mine in northwestern Arizona. We're looking to potentially double the capacity there. We're in the feasibility part of that planning. A year from now or so, we'll be in a position where subject to there being a fatal flaw, which we don't expect anything, we expect to green-light that project. That'll essentially double the production there. It's a very long reserve life, currently over 80 years. We'll be bringing that value forward. The other real exciting thing that we have going on in the U.S. and in South America, but we're focused mainly on the U.S. right now, is this leaching opportunity. We've got, and you've seen it in our slide, we have 38 billion pounds of material that's already been mined. It's sitting in stockpiles, so it has a very low carbon footprint from here. What we're working to do is trying to find ways to recover a portion of that material. It's not in our reserves. We don't have anything in our plans of significance to recover that material, but we're making a lot of progress. We're encouraged by the work we're doing. We're using new technologies. We're using a lot of data analytics, and we've got a variety of technologies that we're looking at to get a portion of that copper recovered. That copper, if we're successful in cracking the code, which we're really excited about doing, is going to come with low capital intensity. As I said, a low carbon footprint, low incremental operating costs. There's a lot of value, particularly for a company like Freeport, that has a significant amount of material that's already in stockpiles, that's not recoverable today with historic technologies. Okay, thanks. I guess just following up on that leaching point then. There's a private company, I won't use their name, that says they have very promising technology on that front, and I assume that technology is proprietary to them, and they're going to patent it and everything. Are you working with them or are you working on your own technology, and is that proprietary? Yeah. Well, we're working with third parties. As well as our own initiatives. Okay. As we've been talking about, the supply of copper is very limited. As an industry, we're going to have to find ways to recover more from copper that we already have. Technology Freeport's really leaned into technology to improve recoveries in our concentrator, to improve throughput rates in our concentrators. We're really moving to these leach technologies. There's a real opportunity here for when you process through leaching, the costs are attractive, but the recoveries per pound are much lower than you would get under a concentrating operation. Our objective is, even if we find ways to improve recoveries by 10% or 20%, that's really meaningful. That's really meaningful to even a company like Freeport. It wouldn't come out all at once. It would happen over time. Potentially, it would be like us having a new mine, with very low capital costs and operating costs. To answer the question, we're working with third parties. There are multiple parties that are engaged in this. We're also pursuing our own technologies because we've got all the data, we've got all the knowledge of these ore characteristics, and we've been really focused on data analytics that help us understand the cause and effect of this leach processing technology. That's something you'll be hearing us talk more about as we get into 2022 and beyond, that would potentially add some incremental production as we go forward. Thanks. You also mentioned the Bagdad expansion earlier. If we think about the project portfolio or investments, you already approved Kucing Liar that's going to be going on in Indonesia. Should we think about Bagdad expansion being likely the first investment, El Abra sulfides potentially following that if the situation in Chile remains positive as we expect, then sort of the Lone Star Sulfides project coming after that? Yeah. Is that right? Okay. With respect to Lone Star, we'll have probably an increment, not a major project, but an increment, that'll probably come in before Bagdad comes in. You sequenced that pretty much correctly. We've got Bagdad, which is a pretty straightforward project, El Abra, which is pending, as we evaluate the situation in Chile, and then the longer-term Lone Star opportunity. I guess, how about M&A? It feels like for the last 10 years, I've been reading nothing but media reports about Freeport, maybe being the target of M&A, but with your share price where it is, it seems like maybe there could be opportunities for Freeport to be buying today. Are you focused on the organic portfolio? We're really focused on the organic portfolio. We keep up with what's available in the market. We always come back to, how does that compare to what's in our portfolio? Now, we're really fortunate as Freeport to have opportunities organically that we can do over time. It doesn't happen all at once, but we can compare those opportunities to what's available externally. As you know, with what the outlook is for copper, there really aren't a lot of companies out there that want to allow quality copper assets to be sold. We follow the market, but it's not really our base case is execution of our existing asset base, which is substantial. Okay, thanks. On the cost side, it is obviously very topical. Every CFO I talk to says cost of everything is going up. How are you thinking about the cost pressure heading into 2022? It seems like a lot of mining companies are talking about maybe 5%-10% cost pressure or something like that, which a lot of it is Well, some of it is also price-related, royalties and things like that. How are you anticipating the cost pressure or seeing the cost pressure today? Yeah. Most of the cost pressures that we have faced, we faced earlier this year with the significant increase in energy prices. That drives some other commodity-based input costs as well. Energy has been the biggest one. Recently, we've seen increases in other commodities that we use in our business, like sulfuric acid, ammonium nitrate that we use for our blasting and mining processes. The team has really done a good job from a supply chain standpoint in partnering, and this goes back a number of years, but partnering with our suppliers. Freeport, because we manage all of the mines that we have interest in, we are able to have a lot of operating strengths in terms of purchasing power and that sort of thing. We communicate regularly with our suppliers, and so we haven't had the issue of being able to get supplies. You are right, the cost has increased. We've been doing our best to manage that situation, but it is a factor. I will say, though, we've had some offsets, in that we've had the currency situation in South America, where the dollar has strengthened against those currencies. Most of our labor costs are in the local currencies. Of course, this is a byproduct, but molybdenum prices have really risen. That has cushioned some of this cost inflation. We are experiencing it. Our labor situation is good internationally. In the U.S., we do have a tight labor situation. We've got some substantial job openings in the U.S., where our team is managing through it and executing through it. It is a tight labor market, particularly in the U.S. Thanks, Kathleen. I guess we're up on half an hour here, I'll draw to a close. I want to thank you again for participating. Don't know if you have any final comments, again, thank you so much. It's been a great day to have you. Thanks, Alex. Really appreciate being part of the conference, we look forward to our investor meetings today. Thanks. Thank you.