Ladies and gentlemen, thank you for standing by. Welcome to the Freeport-McMoRan Fourth Quarter Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. If you wish to ask a question during the Q&A session, press star one on your touchtone phone. If you require assistance during the conference, please press star zero. I would now like to turn the conference over to Ms. Kathleen Quirk, President. Please go ahead, ma'am. Thank you. Good morning. Welcome to the Freeport-McMoRan Conference Call. Happy 2023 to everyone. Earlier this morning we reported fourth quarter 2022 operating and financial results. A copy of our press release and slides are available on our website at fcx.com. Our conference call today is being broadcast live on the Internet. Anyone may listen to the call by accessing our website homepage and clicking on the webcast link for the conference call. In addition to analysts and investors, the financial press has been invited to listen to today's call. A replay of the webcast will be available on our website later today. Before we begin our comments, we'd like to remind everyone that today's press release and certain of our comments on the call include forward-looking statements and actual results may differ materially. We'd like to refer everyone to the cautionary language included in our press release and presentation materials, to the risk factors described in our SEC filings. On the call today with me are Richard Adkerson, our Chairman of the Board and Chief Executive Officer; Maree Robertson, our CFO; Mark Johnson, our Chief Operating Officer of Indonesia; Josh Olmsted, who is our Chief Operating Officer for the Americas; Michael Kendrick, who leads our molybdenum business; Cory Stevens, who heads our engineering and construction and overall Global Technical Services Group; Rick Coleman, who is actively involved in all of our construction projects, as well as Stephen Higgins, as Chief Administrative Officer. We have a full complement of management team here today. We'll start. Richard will make some opening remarks, and then, he'll turn it back to me and we'll cover the slide materials, and then we'll open up the call for your questions. Turn it to you, Richard. Yes. Thanks, Kathleen. Thank you all for joining us today. As Kathleen said, after my overview remarks, which will be brief, she will review our results for the quarter. It was a strong fourth quarter. The numbers speak for themselves. It reflects the performance of our global team. Much appreciate everybody's hard work. I read one of you said this morning in a report, "Mining is a tough business," and it certainly is. Nobody knows that, I think, better than me. What we've done, and is reflected in our results for 2022 and particularly the fourth quarter is remarkable. Most of you who know our business, and maybe all of you do, recognize the need to look at Freeport into two major segments. Our operations in Indonesia by PT Freeport Indonesia is characterized by very large volumes, very low costs because of the grades and the gold content. Largest gold mine in the world is a by-product. As you'll see in the fourth quarter, it operated as the world's second-largest copper mine with a net unit cost of $0.06 a pound. Our business in America is quite different. We have among the largest mines in the world. The mines have low grades. There's much more material to be mined and processed to recover the copper. And it's an operation that gets challenged by low copper prices and factors like inflation. When you look at the results and what our team has done this year, it's been very positive. It's also characterized by having some large future brownfield expansion opportunities, which is particularly meaningful given the situation of copper in the world. Indonesia, it was just rock solid performance. We've been operating underground there for 40+ years now. We've been investing in the current underground operations that we have been ramping up over the past 3 years to become the largest underground mining operations in the world for the past 25 years. It just reflects the long-term nature of our business. The last 3 years have really been notable. We completed mining the Grasberg open pit, which had been the bulk of our operations, since the discovery of the ore body in the late 1980s. We completed mining that pit at the end of 2019. Early in 2020 we faced COVID. For years this transition was viewed as a risk overlying Freeport's business. It's just a major accomplishment that we've reached our targeted mining and metal production targets, that is what's arguably the most complicated mine in the world. It's all results of the hard work and accomplishments of our team there. Very proud of them. Americas business has done very well in meeting the challenges that we've had there, dealing with inflation, you know, dealing with a period of low copper prices. We have issues that are challenged in terms of getting workers for our operations in Americas. Our operation in Peru was facing a severe challenge with COVID that they managed very well. The political situation in Peru right now is very complicated. There are protests throughout the country. Our team is doing very well. We're continuing to manage housing, feeding our people, and continuing our operations. We are slowing down a bit to make sure we have supplies for the long run. We have support by our workforce and fundamental support for our business by the local community there because we've established such a great relationship with them. We are, as we look out now, trying to predict short-term copper prices is very difficult. We actually don't even try to do it ourselves. We deal with short-term negative movements when they occur by having a strong balance sheet and a conservative financial policy. It's actually good to see right now that market sentiment going into 2024 is much improved over the end of going into the fourth quarter. You know, we are on the outlook for the well-known risks that the world faces today, and we're prepared to deal with it. We are a long-term business, and everything we do is focused not on the short run, other than to protect ourselves by having the strong balance sheet, managing our business in the right way, but our success is going to be measured over the long run. Copper's long-run outlook is increasingly positive based on fundamentals of demand and supply. We committed to copper 20 years ago, when we were a single-asset company. The rationale for acquiring Phelps Dodge more than 15 years ago is being reinforced today by the combination of this really special mine we have in Indonesia and the global operations and growing operations that we have in the Americas. It was the right decision 20 years ago to focus on copper, and it's the right decision now. Kathleen? Thanks, Richard. We'll start on slide 3, which summarizes our performance for the full year 2022. Just a couple notes on the fourth quarter from our press release. We finished the year with a strong fourth quarter. Copper and gold sales exceeded our October guidance, and our consolidated unit net cash costs of $1.53 per pound in the quarter were better than our estimates going into the quarter. With average copper realizations in the fourth quarter of $3.77 per pound, we generated strong margins with fourth quarter adjusted EBITDA at approximately $2.25 billion. Looking at the year, we are proud of the performance of our team. Stayed focused on effective execution and on driving results in a volatile macroeconomic environment. After successfully growing our volumes in 2021 by 19% for copper and 59% for gold compared with 2020, we achieved another year of growth in 2022, with 11% higher copper sales volumes and a 34% increase in gold volumes. Our team in Indonesia has successfully and materially grown production levels and is sustaining large-scale, low-cost production at the world's largest underground mining complex. In the Americas, our teams in Peru and Chile proved resilient in restoring production during 2022 that had been impacted by the pandemic. Our teams in the U.S. maintained production at 2021 levels despite ongoing labor shortages, and we also made significant advances on new technologies to enhance value. For the year, we generated $9.5 billion in adjusted EBITDA, that was a year of dramatic swings in commodity prices and cost drivers. Our operating cash flows for the year, which were net of $1.5 billion in working capital requirements, was in excess of our capital investments in our operations, we nearly tripled our cash returns to shareholders pursuant to our performance-based payout policy. We ended the year with net debt, excluding the debt associated with our smelter, of $1.3 billion, that's substantially below the level of mid-2021 when we initiated our performance-based payout policy. On slide 4, you'll see we've listed notable accomplishments during the year. In addition to driving value in our operating and financial areas of achievement, we're very proud of our work with third parties to validate all of our operations under The Copper Mark standards, the measurable progress we're making on our climate initiatives, and the expanded disclosures we've developed to enhance transparency and accountability. We'll talk about markets next, and we've got a slide on page 5. We experienced significant volatility as many of you have seen during 2022, with copper prices trading from a high of $4.87 per pound earlier in the year, falling to $3.18 per pound mid-year, and partially recovering to $3.80 per pound by year-end. Prices continued to move higher in early 2023 to a level currently approximating $4.25 per pound as several of the macroeconomic clouds began to lift. We discussed on prior calls that the dramatic moves in 2022 have largely been based on sentiment rather than fundamentals. The facts are that the physical markets for copper have remained tight even during the period of weaker economic data coming out of China, and that's evidenced by the low levels of available copper inventories throughout the year. At the same time, copper's importance in the economy continues to grow as a result of the intensity of use in clean energy applications and the global acceleration of electrification. We believe we're still in the early innings of a broad-based secular driver of long-term demand. The ability of the industry to meet this multi-year period of growing demand continues to be challenged, leading to large market deficits in the future. You read about these challenges every day, it's getting harder, not easier. Higher long-term prices are needed to incentivize new supplies. We've lived through the ups and downs in the copper market. We've effectively managed our operations and balance sheets, the balance sheet during periods of volatility, we're prepared for this. We believe the long-term fundamentals point to a real step change in how copper is valued in the economy. Turning to our reserve position on slide 6, we benefit from a geographically diverse, high-quality portfolio of copper mines with significant exposure to gold and molybdenum. Our strategy, as Richard discussed, is centered around being foremost in copper, and we benefit from a portfolio of assets with characteristics that are very difficult to re-replicate. We show our reserve position at the end of 2022 with over 100 billion pounds of proved and probable reserves. We have an average reserve life of over 25 years. We added twice the amount of reserves we produced in 2022, principally at our U.S. mines in the Morenci and Safford Lone Star districts, where we're focused on future growth. In addition to proved and probable reserves, we have enormous mineral resources of 235 billion pounds of copper. Over half of this is located in the U.S., where we have established operations, a great track record, and a valuable franchise. We'll continue to work as we go forward to convert these resources into viable mine plans and future production. It's an extraordinarily valuable resource position in a world that's gonna need more copper in the future. We wanted to focus a little bit on molybdenum on this call. On slide 7, we've got some information about our molybdenum business. We're a leader in that industry. We're the world's largest producer by a significant margin. With the price move over the last couple of months of over 50% in molybdenum, we thought you'd be interested in learning more about our business. We produced 85 million pounds of molybdenum in 2022, and that's comprised about 60% from copper mines as a by-product, and the balance from two primary molybdenum mines that we operate in Colorado. These are the only primary molybdenum mines that are currently operated in the United States. We also operate downstream processing facilities to produce products that are used in a broad range of metallurgical, specialty steel, and chemical applications. The price move from $18 per pound at the start of the fourth quarter to over $30 per pound currently has been driven by some of the same supply issues that have impacted copper. In addition, demand drivers continue to be supported from the oil and gas, aerospace, and power generation sectors. We note on this slide the impact of a $5 change in molybdenum prices. It's material at $400 million in annual EBITDA and $375 million in cash flow. The recent move of over $10 per pound, if sustained at a higher price, adds additional leverage to our results. Looking at our operating stats for 2022 on slide 8, you'll see our sales for the year were about 35% from the U.S., 28% from South America, and 37% from Indonesia. In the U.S., our sales were similar to 2021 levels, and we grew sales volumes by 10% in South America and by 20% in Indonesia. In the U.S., we're continuing our focus on productivity, given the current limitations on adding to our workforce. We're taking advantage of technology advancements and opportunities to expand production from leaching at low incremental cost, and we're planning our next phase of growth, as we'll talk about in a few minutes. As discussed, the biggest resource position and source of long-term growth we have is a real opportunity in the United States. In South America, both Cerro Verde and El Abra grew production in 2022 in a complex social and political environment. After successfully recovering from the pandemic-related interruptions in 2022, our team in Peru is now dealing with challenges associated with civil unrest that you've all read about. We're prioritizing the safety and security of our workforce. We're navigating disruptions to transportation routes and supply chains. To date, the impacts have not been significant, but the situation is dynamic day by day, and we're watching it very carefully. The bottom of the chart shows the 2022 cost performance. As we've talked about on prior calls, we experienced significant inflation pressures across the business during 2022, particularly for energy and other commodity-related consumables. In the second half of the year, started to see inflation from rising costs of materials, supplies, and services. The situation started to improve in 2022 with a number of the commodity-related consumables, but we're still dealing with costs in excess of historical levels. If you look at the average cost for the year at Grasberg, of $0.09 per pound, it's remarkable, particularly in the context of this cost environment. Richard talked about the significant success story of the Grasberg transition, and we've got some details on slide 9. It was significant success for not only Freeport, but also something for the global mining industry to be proud of and the country of Indonesia. We started planning for this transition over 25 years ago, and the team has just done an outstanding job. We benefit from the fact that several from the team who were involved in the planning of this project, including Mark Johnson, who's on this call, stayed with it over this period. Over the years, we've added great talent to our team with experts from around the world. The success of this project, the mutual respect built over the years between Freeport, the government of Indonesia, and local communities has established a really strong foundation for the future. We've got the opportunity with this resource to plan a new phase of development longer term and are continuing to discuss with the government the opportunity to extend our long-term partnership beyond 2041. If you go to slide 10, we've got an update on our, on our smelter project, and this is a key feature of our commitment to the Indonesian government, was to expand domestic copper smelting and refining capacity in Indonesia. We're making really good progress on constructing the new smelter in Eastern Java. It's near our existing smelter, PT Smelting at Gresik. You can see from the pictures that construction is advancing. We've got thousands of workers now on site. We're working very closely with our EPC contractor to try as much as possible to make up delays that were caused by the pandemic. We reached a milestone of over 50% completion recently, we are expecting to begin commissioning the smelter during 2024. As you recall, the capital investments for this project are being funded from a successful bond offering that PTFI completed during 2022, we have the funding between the bond offering and a revolver at PTFI to fund this project. Moving to our growth outlook, this is exciting opportunities for the company, we continue to plan our next phase of growth. We benefit from having multiple organic projects to develop within the portfolio over time. We operate all the mines we have interest in. We're able to share experiences, new technologies, operating synergies, and best practices across the portfolio as we develop projects, we can direct capital across the portfolio to the highest value opportunities. Our proven technical capacity, capabilities and our management is a notable strength. Importantly, we've earned a track record and a reputation for operating sustainably and responsibly. The world, we believe, is going to need all of our projects and more. The project with the shortest lead time is our Americas Leach initiative. We've talked a lot about it in recent calls. The economics are compelling, low capital intensity, low incremental operating costs, and a low carbon footprint. The new data analytics capabilities we are continuing to be applied to prioritize our work streams on the highest value. We're continuing our work to apply covers to the leach stockpiles because of the benefits that you get from heat retention in enhancing recoveries. We've identified new areas that were not pursued historically. We're also continuing to test various additives that can further enhance recoveries. This is a really significant opportunity for us. We're continuing to target a run rate of 200 million pounds per annum by the end of this year, and success at this level would provide opportunities to scale larger. We're in a great position to lead this innovation with our long history in leaching and large inventory to work with. At our Bagdad Mine in northwest Arizona, we're progressing a feasibility study to double production at that site. We expect to complete the feasibility this year. We'll be in a position to assess options on how we time the future development. We started advanced planning to commence construction of a new tailings site that would support the existing operation but would also provide flexibility for the expanded production. As a brownfield expansion, this project could be developed more quickly than a greenfield development. Our Lone Star opportunity is really something special. We've been successful in increasing production levels substantially above the original project, and we're really in the early stages in the development of this mine. As we mine the oxide ores more quickly, we're opening up the opportunity for a major sulfide development long term. The resource is massive. You've seen the number is 50 billion pounds of potential resource here. We're doing a lot of drilling, and importantly, it's located in an established mining district in the U.S. In Chile, we've defined the opportunity for a major expansion at our El Abra mine. As we continue to monitor regulatory and fiscal matters in Chile, we're planning a project to invest in infrastructure, water infrastructure, to provide flexibility to extend existing operations and optionality to support a new concentrator. We're also planning at El Abra to test new leaching technologies in the near term to evaluate the potential for expanded leach production and possibly competing technologies to a concentrator. We're continuing our development of the Kucing Liar deposit in Indonesia. We're really gaining a lot of efficiencies from the work we did at Grasberg Block Cave. Similar to that development, this is a long-term project. We expect to have initial production from Kucing Liar deposit towards the end of this decade. Moving to slide 12, we provide a 3-year outlook for our sales volumes. As we talked about, we achieved 2 years of growth in copper sales, and currently our forecast reflects sales in the 2023 to 2025 period that are similar to 2022 levels. Our mine production is actually going to be higher than our sales by about 100 million pounds in 2023 and 2024, and that is a result of our domestic processing arrangements in Indonesia, where the point of sale has changed from selling concentrate to selling cathodes. A portion of our production will be inventoried until it's processed and sold through our smelters. Previously, this inventory would have been held by third-party smelters. We've got small revisions otherwise to 2023 guidance that reflects a assumption of a continuation of tight labor markets in the U.S. That's impacted our ability to increase mining rates. Success also in our leach recovery initiative could provide some upside in the U.S. as we look over the next 3-year period. In the reference materials on slide 30, we provide information on our 2023 sales by quarter. The reason for the drop in the first quarter reflects the impact of the tolling arrangement in Indonesia. You can see the balance of the year is fairly stable at over 1 billion pounds of copper sales per quarter. Moving to the cost outlook for 2023, we're providing guidance of average costs of $1.60 per pound for the year. That compares with $1.50 per pound in 2022. We show a comparison to the two years, and you'll see the site production cost line item is about 4.5% higher than the 2022 average. That's a result of assumptions that we've made in our forecast for higher average electricity and coal costs compared with the 2022 average and also higher power requirements, principally in Indonesia and the impact of higher costs of equipment components, supply costs, and labor cost increases. The other line items are offsetting. You'll note a decline in royalties and duties. That really is reflective of a recent reduction in our export duty in Indonesia as a result of the smelter progress. I'll also note that this assumes a molybdenum price of $20 per pound in 2023. The current price is $30 a pound, and each $2 per pound change in molybdenum is $0.02 a pound. If current prices hold, we'd have roughly $0.10 a pound less cash unit net cash cost than this reflects. In recent months, inflationary pressures have been less severe than we experienced during 2022. We're encouraged by that, and we're gonna continue to focus on managing costs that we can control. We're continuing to pursue technology-driven enhancements to mitigate the impacts, particularly in the U.S. As getting to our cash flows, significant leverage to copper prices. We've got on slide 14, we show modeled results for EBITDA and cash flow at various copper prices ranging from $3.50 per pound to $5.00 per pound copper. These are modeled results and we use the average of 2024 and 2025 with current volume and cost estimates and holding gold flat at $1,900 per ounce and molybdenum flat at $20 per pound. You'll see here that annual EBITDA would range from nearly $9 billion per annum at $3.50 copper to $15 billion per annum at $5.00 copper. Our operating cash flows would range over these prices from $6 billion at $3.50 copper to $11 billion at $5.00 copper. We show sensitivities to various commodities on the right and input costs. With our long life reserves and large scale production, we're well-positioned to benefit from future metals intensive growth trends, with prospects for increasing cash returns under our performance-based payout framework. Our capital expenditure plans are summarized on slide 15. The capital expenditures totaled $2.7 billion, excluding the smelter in 2022. We'll note that this was lower than the $3.3 billion estimate we provided going into 2022, that reflects lead times and our focus during the year to prioritize critical projects. Current forecast for 2023 totals $3.4 billion, that's a slight change from our previous estimate of $3.3 billion for 2023. Capital expenditures for 2024 are currently forecast to approximate $3 billion as spending on the Grasberg projects reach completion. We always are very careful in managing our capital costs to maintain flexibility in response to market condition while ensuring that our investments are sufficient to support a reliable long-term production profile. Returning to the financial policy that we began to implement in the second half of 2021, it's really centered on 3 priorities. The cornerstone of the financial policy is maintaining a strong balance sheet and liquidity, and that provides significant flexibility for the future. We've been executing on this performance-based payout. It provides for 50% of our free cash flow to be allocated to shareholder returns in the form of dividends and share purchases and the balance available to invest in our projects. Since commencing the performance-based payout policy in the second half of 2021, we've returned about 60% of our free cash flow to shareholders, through dividends and share purchases. At the same time, we also further strengthened our balance sheet for providing capacity for funding new projects over time. We did not purchase shares in the second half of 2022 because of the significant change in market conditions and the resulting impact on cash flows in the second half of the year. The improved market conditions will drive increased free cash flow, which will boost shareholder returns. Our future discretionary share purchases will be dependent on our cash flow and overall market conditions. We believe the three priorities of balance sheet strength, allocating cash flows to a mix of shareholder returns, and organic growth will enhance long-term value of our business. In closing, just wanna reiterate our view about the positioning for the company, a bright long-term future supported by our attractive portfolio of assets, supported by the fundamentals of the copper business and the positive outlook for the markets we serve. Our team is energized. We're motivated to continue building long-term value in our business and on executing our plans responsibly, safely and efficiently. I want to thank you for your attention, operator will now open the call for questions. Ladies and gentlemen, we will now begin the question and answer session. If you wish to ask a question, press star one on your touch tone phone. If your question has been answered or you wish to remove yourself from the queue, please press star one again. If you are using a speakerphone, please pick up your handset before pressing the numbers. We ask that you limit your questions to one. If you have additional questions, please return to the queue. One moment please for our first question. Our first question will come from the line of Emily Chieng with Goldman Sachs. Please go ahead. Good morning, Richard and Kathleen. Thank you for taking my questions. I'd like to sort of ask around Freeport's growth appetite. As you think about the copper price environment and how the market is trending, has anything in your mind changed around how you view Freeport's need to pursue or accelerate growth plans? There's clearly been a lot that has changed in the broader macro environment as well, and wouldn't mind hearing about how maybe some of the leaching opportunity can play into that and what, you know, the potential annual run rate basis could look like when fully developed. Thank you. Thanks, Emily. With leaching, we're not constraining ourselves to conserve capital or anything else. We believe this is such a great opportunity for us that we are pursuing it as aggressively as we can, and we are pursuing it on a number of different fronts. You know, some using outside vendors, some doing things on our own, some in joint ventures with companies. It's just such a great opportunity to add production at low capital cost and with low carbon. It's not something we're constraining. The other projects that we have, and Kathleen reviewed them, we have a series of major capital projects that are multiyear large capital requirements. For those, we are working hard to prepare ourselves for them and doing work so that we can go forward. We are going to wait until the uncertainties that we've been facing recently are become clearer. As I said, the current sentiment is much stronger than it was 3 months ago, but there's still a lot overhanging the market, as you can see in the market today. We are waiting to see that. Our project in Chile is dependent on the direction the country goes in with its current consideration of its laws and its constitution. That is really going to be on hold till that becomes clearer. We're not preparing any major change in the first part of 2023 versus what we did in 2022. Emily, on the leaching run rate, the 200 million pound target that we've laid out, we believe that that can be attained just from these operational changes that we're making. You know, the heat retention, leaching in places that we weren't leaching previously, directing the solutions to places where we can enhance recoveries. Really from data analytics that we're getting that are helping us guide our operations every day. Those things we think we can get just operationally. On top of that, this research and development that's going on with respect to additives, that could, you know, that could scale it larger. This 200 million pounds that we're talking about, we think that is really just bringing more of a light on our leach stockpiles and moving aggressively to, you know, over the last several years, the focus on the industry has been more on concentrating. Now we're putting focus back on these leach initiatives, and we've identified some things. I wouldn't say low-hanging fruit, but it's achievable things that we're doing, and we're already starting to see results. Your next question will come from the line of Orest Wowkodaw with Scotiabank. Please go ahead. Hi, good morning. Just given the uncertainty out there with respect to both Chinese and ex-China markets, can you give us an updated outlook on what you're seeing from your customers? Like, are you seeing any indications of slowing demand? Richard, you want me to take that? Orest, I mean, there's pockets, of course, in the residential markets. There's pockets of weakness, we're just continuing to see strong physical demand. We're selling everything that we can produce, and there's no ability for us to, at this point, produce more that customers are looking for. On balance, I'd say the physical market continues to be healthy and we have a, you know, most of our insights come from within the U.S. because we're a very significant part of the U.S. marketplace. Generally, the market is continuing to be strong and we're selling everything that we can produce. If we could produce more, our customers would want it. Thank you. Even looking back, even looking back to 2022, you'll recall I've mentioned, I think on more than one conference call that there was a disconnect between even then the physical world we were dealing with with our customers and what the market was doing. It has been striking as to the strength of demand that we've had. You know, we had no problem selling our production. We've actually, you know, there was a shortage of wire rod in the United States that was where we couldn't meet everything that was being produced. With our copper concentrate customers, including China, people were buying all that we produced and actually wanting more. Market sentiment's better now and but our customers continue to be very positive. Thanks, Richard and Kathleen. Your next question will come from the line of Chris LaFemina with Jefferies. Please go ahead. Hi. Thanks, Richard and Kathleen, for taking my question. You have $1.3 billion of net debt as of the end of 2022. Your net debt target range is $3 billion-$4 billion. I guess the first question is that the range that we should think about? Are you comfortable maintaining net debt below that range? In other words, if you really want to get to $3 billion-$4 billion, how do you get that from here? You're generating positive cash flow. You know, you can step up the buybacks... Yes ... maybe accelerate returns. Do we get to a $3 billion-$4 billion range this year, or is that not going to happen? Well, Chris, I said this to-. The 1.3. Go ahead. No, I was just gonna say, Chris, and Kathleen, you can talk about the details. When we announced the financial policy, I looked out and I said, "You know, the likelihood is, cash is gonna come in faster than we can spend it," just because the nature of our capital projects are long term and take a lot of time. This has happened before at Freeport. You know, the two previous occasions in our history we got down to 0 net debt. Now, this is setting aside the smelter because that's financed on its own. What this does is by having that cushion between where our debt is and our debt target is, it will allow us, you know, to readily be able to finance future construction projects. It's just the way the cash flows in versus we don't feel any compulsion to spend money to get the debt up to that target. Okay. Should we think of it more as a net debt target of below $4 billion rather than $3 billion-$4 billion? Well, I think. $3 billion-$4 billion is the limit. Yeah. $3 billion-$4 billion- Yeah, that's the ceiling. is what we... Yeah. Got it. Okay. Good. Thanks. then just... Sorry. The second question-. It's the ceiling. Yeah. Second question on Grasberg. It looks like you've increased your gold production guidance for 2024, 2025 and 2026, but copper volumes are pretty much the same. Is there something, what's happening there to result in an increase, and would you expect to get out of that mine in terms of gold over those three years? Well, while the numbers look simple, you know, the mine planning is complicated. We report the results of our mine planning quarterly. What you're seeing there is some revisions in mine planning to optimize resource recovery. It wasn't any target. It's just the way that the mineralization in these ore bodies fall out as we change future mine plans. It happened this time that. Yeah, there were some sequencing changes between Grasberg Block Cave and Deep MLZ. Additionally, we've been getting higher gold recoveries than we had previously forecast, and that's helping us as well. Those are the main differences. Thank you. It's not a targeting exercise, Chris. I mean, we didn't do something to try to get more gold and, you know. It was just, we look at the ore body, we maximize its values. It's a dynamic process, and we report to you the results of that process, and that's what it is. Got it. Thanks. Your next question will come from the line of Lawson Winder with Bank of America Securities. Please go ahead. Good morning, Richard. Good morning, Kathleen. Very nice to hear from you both, thank you for your time and the update today. I wanted to hopefully ask you two questions, just one on the C1 cash cost guidance for 2023. To what extent might some of these higher costs year-over-year continue into 2024? Like, what is the percentage of those that are more structural as opposed to potentially more cyclical? I think you can. You know. I think you can look at the makeup of our costs. On that slide we provide a makeup and labor costs, you know, is something that's kind of stays with you. Materials and supplies, a component of that is commodity driven, and a component of it's, you know, services driven. The energy I think is, you know, more variable and things like sulfuric acid is more variable. You can look at that pie chart and get a feel for which ones have the ability to change. We provide some sensitivities on things like currencies and our diesel costs. Yeah. Okay. One thing that's a real benefit of Freeport that we say a lot, I'm not sure if it's as recognized as much as it ought to be, but we operate every mine that we have an interest in. We have joint venture partners, but unlike other operations where those joint ventures are run as a standalone business. We operate globally through our operatorship rights. That makes us really important customers of our suppliers. We're generally one of the very largest customers of people who provide our major supplies. As those suppliers globally have been working to pass along their input costs, our global supply team working with our operations have been effective in mitigating certain of those costs. We've had some impact. Again, it's a real dynamic situation and, you know, you saw we came in below our quarter ago estimate. Some costs are moderating, some are carrying over, but it's just an ongoing thing, and we give you the best outlook we have, and then we work hard to try to operate with as low a cost as we can. Okay. Thank you, very much for that. I wanted to follow up on your comments around El Abra and the plans to advance water infrastructure. Are you considering desalination capacity? Is that what you're referring to there? Yes. And then- Yes. That's really the only alternative. Okay. What would, sort of, the timeline be on that? Well, we're working on it right now, and we're structuring it so that we have the alternative of going forward with our current operations and maximizing those or undertaking a large scale investment in new concentrator there. We're approaching it to give ourselves the alternatives of going in either of those directions. We wanted to get started with that because it was gonna be required one way or the other. Yeah. Understood. We've got to go through a permitting process on that as well. You know, it's unlikely we'll have any material spending on it until, you know, a few years out. Fantastic. It takes time to do it. Okay. Thank you. As I said, you know, in the past we've been delaying that till we made the decision on the concentrator expansion. In recent months, we've decided we need to go ahead with the permitting for the water, desal plant, because we're gonna need it one way or the other. Great. Thank you very much. Your next question will come from the line of John Tumazos with John Tumazos's Very Independent Research. Please go ahead. Hey, John. Good morning. Congratulations on all the progress in the tough business. Thinking of the slide 11 with the 5 projects, I realize it takes a lot of engineering resources for each of these projects. Is 5 sort of the maximum number, or do you have time for a little more? You're engineering El Abra, the constitution and taxes and all that stuff is up in the air, so that's a big investment and time. You don't have the Sierrita mill, Chino mill or an additional Morenci mill projects there. I know you can't do anything, everything. At $30+ Moly, a Sierrita new mill must be very attractive. You're budgeting $20 and maybe lower for the long term, and $15 for your reserves. Is there too much Indonesia in your CapEx and not enough America, since you're the biggest U.S. copper producer? With politics, the U.S. looks better every day. I know that's a lot of thoughts, but how you pick the projects. Well, no. you know, it's a good news story, you know, to have this large pipeline of future projects, and I personally believe the world's gonna need that copper. Going to your last question first, there is no relationship between Kucing Liar and projects in the U.S. It doesn't bump out projects. It doesn't prioritize anything. It's something that fits right in. It would be financed by PTFI out of cash flows from PTFI, and it will support our volumes there through our current operating rights to 2041. We're talking with the government about extending those. There's opportunities for Kucing Liar beyond that. We believe, although we haven't been engaged in drilling exercises in the Grasberg Block Cave and deep MLZ, and who knows what else is down there, 'cause we really haven't fully drilled to explore future opportunities. John, you know, the thing about Grasberg, ever since we discovered it just keeps getting bigger and bigger and bigger. That's on its own. There is no effect on what we're doing at Kucing Liar with what we do in the United States. We have the financial resources to do in the Americas, in the United States and South America. The ones we've listed are the ones we believe are the largest, most significant executable projects initially. You know, the Bagdad expansion is a straightforward doubling of mill capacity. we've dealt with water issues and so forth. That'll add Moly as well, John, Bagdad. Yeah, it does. It has Moly at Bagdad. The biggest problem, quite frankly, at Bagdad is getting workers. You know, it is just a challenge getting mine workers in today's world who live in these remote communities where our mines are. You know, that's a very executable project. It's not that complicated. As we deal with the workers situation and housing, and as markets clear up, that's one that'll be ready to go. As I said, El Abra is depending on the direction of the government there. Lone Star, which, you know, really looks like it can be, you know, another base level, high-profile operation for Freeport in the future. We're gonna maximize it through the oxide ore and continue to understand how we attack the big sulfide resource that we've identified there. Beyond that, you know, you mentioned Morenci, Sierrita. There's other older mines that we have. Chino has a growth opportunity. All those are in stages of evaluation and understanding what we have. Obviously, when you sit down on top and look at this organization, you wanna be focused. You don't wanna just have a scattergun approach. All of those things provide us growth opportunities from inside our company, which makes it very unlikely that we'll be acquiring smaller operations to pursue externally. You can just see what's going in the world when you have to pay a big price to get a resource, and then you put the capital on top of it, and that ends up with a very large investment to try to recover. It's much better because we get no value today from these future resources that we have within our own portfolio. With success in developing those, all the incremental value goes to our shareholders, not somebody else's shareholders. It's the strength of our company that. John, on your question about... Sorry, Richard. Go ahead, Cathy. No, go ahead. I was just gonna say, your question about the molybdenum situation. We do have excess milling capacity at our Climax mine. We've been operating it below capacity in recent years because of market conditions. We have started to do a stripping campaign there that will allow us to expand production from Climax over time. It doesn't require you know, a new concentrator or anything like that. That's our first one is. The incremental costs are attractive. We are doing that. As Richard said, we've got a lot of projects in the background. These are the ones that are strategic and that we're focused on. The leach technology is a near-term project, and Bagdad, long-term, I mean, medium-term, and the Lone Star, you know, major expansion, longer term. El Abra, we believe will get done. It's a project that it's attractive, and it will get done. It's a question of when. We don't have a good view yet on when that'll go forward. This investment in some infrastructure and water is gonna give us, you know, some optionality to support an expansion. We've got, you know, all our people focused on these things. We have an enormous resource base in, like we were saying, in the U.S., where we already have established operations and community support. We're in a really good position as we look forward as to what this world's gonna need in terms of new copper supply. None of this can go quickly, as you well know. If I could follow with one more. A few years ago, Freeport bought a drinking water system and a sewage system for Arequipa, the third-largest city, as you were tripling the El Abra mill and mine. Excuse me, the Cerro Verde mill and mine. I think you might have, some rail, some short line rail, so you don't have as many trucks on the road. Could you just confirm that your tons per day are 350,000 to 400,000 tons a day, and no mishaps at Cerro Verde? I think there's a lot of confusion in the press about, conditions in Peru. Yeah. Yeah. The last- No, I'm. In the last several days, we've been operating at around that 350 level. You know, prior to that, we were closer to 400. We've really been operating at, you know, 10%, 15% lower just to deal with supplies. We're watching that every day. I'll let Richard comment on the community situation. In terms of operations, we're continuing to operate, but we have limited our mill throughput just to deal with the limitations and the concerns about key supplies. Yeah. I'm glad you asked the question because I wanted to elaborate on what I said about Peru in my opening comments. I think all of you know that the Cerro Verde milling complex is the largest in the industry. You know, 400,000+ per day capacity. The tailings dam will be one of the largest earthen dams ever constructed in the history of mankind, if not the largest. What John's referring to is a number of years ago, we did, as a community project, invest in a fresh water system for Arequipa, the second-largest city in Peru. As we were developing the expansion of the concentrator and the tailings dam, we shifted away from building a new dam on the river that runs just outside the city of Arequipa to come in, and we built a wastewater collection and treatment system. With doing that, we got water for our concentrator, and we markedly improved the ecology of the river. That has been very positively received by downstream farmers and the community itself. That's really helped foster our positive relationship there, and our team there does overall good. Now, having said that, the situation in Peru is very complicated, and nobody at this point can predict how it's going to unfold. The motions are very high. The government is reluctant to use extreme steps to deal with roadblocks and disruptions. This thing is a day-to-day evolution. We are faced with the problems that caused us to cut back on our production rates to conserve lime and other inputs so that we could continue to operate. We have the ability to house workers on a temporary basis on site. Most of our workers live in the region of the city of Arequipa, and sometimes those roads have been blocked. We, we're prepared for it. Our team does a great job in managing things like this over time, like COVID, but I just wanted to make the point that these concerns that people are raising are directed towards the issues with the government and not directed against us as Cerro Verde as in our operations. So far, we've been able to continue to operate. Thank you. Your next question comes from the line of Michael Dudas with Vertical Research. Please go ahead. Hey, Michael. Good morning, Richard and Kathleen. Good morning. I was intrigued by your comment about labor, and availability and such. I guess you're talking a bit more like in the U.S., and how much is that situation limited your volume plans for 2023? It was probably a small percentage, but is it more secular pressure of getting the qualified, productive miners and operators for all your mines? Is that also gonna be a limiting factor on how the industry reacts to try to move forward with the market, you know, signaling in the future they're gonna need more supply? Yeah. Well, during COVID, we did have, you know, some impacts on our mining rates and also suspending some milling operations at Morenci. I'm speaking about the U.S. right now. We started ramping back up in the U.S. during 2021, and that continued into 2022. We have a situation where we currently have about something on the order of 1,300 job openings. We've got typically 10,000-12,000 employees in the U.S. We've seen a lot of turnover as well, and it's just been a very competitive marketplace for labor, as you've read about in the U.S. We don't have that situation in Indonesia or in South America, but we do have competition in the U.S. with other sectors. That's continued into 2023 and which caused us to change our outlook somewhat. We could have, in 2022, produced more if we were fully staffed. I believe that is the case again this year. That's why we're making some progress on hires. We are, you know, we're conducting training, and some of these workers that we're hiring now are new to the industry, so we do have to go through training. The experience level is not what it was, you know, 5 years ago. We're going through that process. I think it does have some implications to the ability to develop a mine, in the, in the U.S. is just the labor force. We'll see what happens. You're starting to see some changes in payrolls and that sort of thing, and we'll see how this unfolds. It is a factor in our, in our U.S., mining output. Yeah. It's, you know, it's broader than mining. I mean, when I talk with people, the business council, business roundtable, it's a common theme you hear across many industries, you know. When all the COVID relief funds went out, you know, that was a factor. I mean, you know, face it, our work's hard work. It's, you know, it's, it's harder to drive a big haul truck than it is to drive, you know, an Amazon or UPS or FedEx truck. You know, we compete with those. We pay our people strong living wages. We're giving people substantial increases this year. We invest in recreational facilities, try to deal with housing. It's an issue in Colorado with our molybdenum mines. You can imagine what it's, what it's like there. It's, it's a big issue for us. As a result, you know, our mine rates aren't meeting what we would like for them to meet, and that affects not only current, but future production. It's a strategic challenge for us. It's not just us and it's not just the mining industry, but the mining industry, because of the nature of the work, presents special problems. This leaching initiative that we're pursuing is not labor intensive because it's already, you know, the material's already been mined. That's a real opportunity for us to execute on. If we're successful with this leaching program, what it opens up to us is unbelievable. I mean, we have, you know, Morenci is the largest leaching operation in the world, has been for years. By enhancing the existing leaching operations using all these tools, data analytics and heat covers and supplements, it's really amazing. It opens up historical leach stacks and potentially places like Lone Star using leaching to, you know, to replace or minimize concentrator investments. It's really exciting, you know, and it's beyond just this 200 pounds that we're targeting now. With success, it's a great opportunity for us and, you know, it's not a fracking deal like it was in the oil and gas industry. It's not gonna turn the dynamics of the supply situation upside down. For a company like Freeport with the leaching operations that we have and the application with success to historical leach sites and future mine development, it's something that's really exciting. The great thing about it is to see the excitement of our own guys, our own team that's working on it. It's really gratifying. Thank you, Kathleen. Thank you, Richard. Thank you. Our final question will come from the line of Bendik Folden Nyttingnes with Clarksons Securities. Please go ahead. Hey, good morning. Thanks for taking my questions. With the revision in the mining royalty bill in Chile, at least sort of moving in the right direction, it would be interesting to get some color on what you'd realistically like to see to be comfortable with moving forward with your El Abra expansion. Yes. I had the chance for the first time to meet the president of Chile when I was at APEC in Bangkok, we had a very long conversation in advance of his presentation, it was really positive. He explained to me what he's facing, which I can appreciate. Kathleen had met with him earlier. So it's like what's, you know, going on in a lot of different countries around the world. You know, particularly when commodity prices go up, people see the opportunity to take financial benefits through royalties and taxes and use them to meet social needs. It's just always a balancing situation. At one point, you know, Chile built its whole economy on copper and was very successful. When I was talking with people in Indonesia, the Congo and other places, I would always point to Chile as an example of a country that could be successful by encouraging mining. Chile for a number of reasons, labor and now government situation has lost and is losing competitive advantage that it once had. These government officials run on a platform of enhancing social programs, and then they end up facing the reality of they go too far with that, what that does to their country in terms of its currency, in terms of its economic viability and investment and so forth. President Chile understands that, and you can see that there has been a more positive tone to dealing with these issues. We're not a real leader in Chile, although we are in the global copper business, so we participate with the government and with other companies there and the conversations that are going on. Share our experiences that we've had in working globally on these kinds of issues. The current direction is clearly more positive than it was a year ago. The president's facing a low level of popularity now. It's a question of facing reality for political leaders. We certainly faced our share of those things. As a mining company, you work hard to gain the trust of the politicians, that you do things the right way. You're sensitive to their issues. You don't try to take advantage every time you have a chance to take advantage. We've actually walked away from projects because governments, we didn't believe the deal the government was offering us was sustainable long-term deals, and that's proved out to be the case. So it's a complicated deal, big part of a business for the leader of a company. You've got to, as I said, listen, be responsible, and work to find middle ground so that it's a win-win deal, and you're not taking advantage of anyone, and you're representing your stakeholders and not letting somebody take advantage of you. That's what Chile's going through. I believe that a reasonable compromise will be reached because it's in everybody's interest for that to happen. We'll also be looking at how the constitutional process advances this year. It appears the financial package is moving forward, and they're reaching some determination. Looks as if that's progressing. We also want to look at, you know, how this constitutional process unfolds as well. In the meantime, we're maintaining our options by planning to move forward with the water infrastructure investments. You know, I can't let this call go by without telling you how personally pleased I am with our much improved relationship with the government in Indonesia, where we had a multiyear discussions, negotiation over our mining rights and our contract and so forth. It's just been remarkable what's happened in the last 6 months. I made 3 trips there. We had the president had an incredibly positive visit to our job site the end of August, early September. He asked me to accompany his investment minister, and Kathleen was there, too. We did a university road trip, and then the two of us went back for the B20 part of G20 and got to see the president and others. It's just the. Then at APEC in Bangkok. It's just a great feeling just to feel that we're all all together now working for the benefit of all the stakeholders and having the success we're having on the ground at PTFI. All right. Well, thank you all- With that, I will turn the call over to management for any closing remarks. All right. I was starting that, and I'll finish. Thank everybody for participating today. You know we're always available for follow-up calls. You can call David initially, and he can make arrangements to talk with Kathleen or me or whoever we need to bring into the conversation. Thank you for your participation. It's great to have a quarter like this, and we're really excited about our future. Ladies and gentlemen, that concludes our call for today. Thank you for joining. You may now disconnect.